Discovery reveals how much it pays out in medical claims – including R6.8 million for a single patient

Discovery Health and Discovery Health Medical Scheme (DHMS), the country’s largest open medical scheme with over 2.7 million members, recently published data into medical aid claims trends.

The scheme paid over R50.6 billion in claims in 2017, with R26.3 billion of those claims going towards hospital claims and R2.9 billion towards chronic conditions.

Discovery noted that schemes are not-for-profit entities, solely funded through member contributions and with the aim of paying members’ medical claims.

And like elsewhere in the world, medical schemes are faced with the challenges of high healthcare costs, various supply- and demand-side factors, and demographic trends such as an ageing population and increasing chronic diseases of lifestyle.

All of these trends place schemes and healthcare funders under severe cost pressures.

“Annual medical scheme claims expenditure rose on average by 11.3% a year over the past decade – roughly 5% above CPI. This is a global trend and not limited to South Africa,” said Dr Jonathan Broomberg, CEO of Discovery Health.

The data show claims trends in terms of in-hospital admissions and treatments, chronic conditions, day-to-day treatment, screening and prevention, maternity and cancer.

Amounts paid for in-hospital claims show that a single severe event could, in the absence of medical scheme cover, mean potential financial ruin for a family.

“During the past year, Discovery Health Medical Scheme covered just over 670,000 hospital admissions. The highest claim covered by the Scheme was R6.8 million towards 199 days of treatment for a 58-year old for a cardio-vascular related condition. This single claim would require 205 years’ worth of contributions by the member to cover the claim,” Broomberg said.

The Scheme paid a total of R26.3 billion for hospital claims and R2.9 billion towards the care of 642,410 members with a chronic condition.

Maternity claims cost R1.4 billion, with caesarean births representing the greatest total hospital cost to the Scheme (28 329 admissions) and 9 750 natural births covered on the Scheme.

Chronic diseases of lifestyle are on the rise, with members increasingly presenting with two or more conditions

South Africa is very much part of the global challenge of chronic diseases of lifestyle, and Discovery Health Medical Scheme’s claims data reflect the trend of escalating chronic disease.

In 2008, just over 300,000 members registered on the Chronic Illness Benefit, with this figure more than doubling by 2017 (642,410 members registered for a chronic illness).

Ongoing medicine treatment remains a significant cost component for Discovery Health to manage for the Scheme. On average, for every R100 paid by the Scheme for a claim relating to a chronic condition, R78.60 is spent on medicines.

Essential hypertension afflicts the majority of members with an average monthly cost per chronic member, at R387, followed by hypercholesterolemia, asthma and diabetes and other chronic conditions.

Hypothyroidism has seen the greatest increase in enrolled members, up 11% from the previous year. The most costly chronic condition is diabetes mellitus with an average monthly cost of R650 per enrolled member.

Cancer prevalence is increasing globally and in South Africa

The Scheme’s claims experience also reflects the global trend in increasing cancer prevalence. “The number of members receiving oncology treatment has increased over the past 10 years due to the higher prevalence of cancer in South Africa and globally,” said Broomberg.

Scheme data show 33,985 members actively claiming for oncology-related treatment at a total cost of R3 billion over 2017.

The top three cancers are breast (14,435 members), followed by prostate (12,122 members) and colorectal cancer (3 970 members). Soft tissue and thyroid cancer have seen the greatest increase in claimants, up 8.2% each from the previous period.

The most expensive cancer to treat is lung cancer at an average monthly cost of R16,417.

The highest oncology claim paid out was for multiple myeloma at R1.5 million.

The Scheme’s data shows a direct correlation between screening outcomes and mortality and morbidity experience. Members who are highly engaged in Vitality, have better health outcomes than members who do not participate in the programme.

These members, on average, have 10% lower hospital admissions, 25% shorter hospital stays and 14% lower overall claims costs.

“Vitality’s impact reduces the Scheme’s claims costs by around 3% each year – generating total savings of approximately R11.6 billion since 2008. This allows the Scheme to provide richer benefits to its members at contributions that are, on average, around 16% lower than other competitor open-schemes, on a like-for-like basis,” said Broomberg.

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Discovery reveals how much it pays out in medical claims – including R6.8 million for a single patient