The costs associated with treating Covid-19 in South Africa: Discovery

Discovery Health has conducted an in-depth analysis into the funding of Covid-19 vaccines for the members of 19 schemes it administers, as well as the financial benefits of having these members vaccinated.

This analysis and resultant projections show that it is not only affordable but also economically viable to support the rollout of vaccines, said Discovery Health chief executive Ryan Noach.

“We have used our evolving understanding of the costs associated with the vaccine rollout for the private sector to conduct our economic analysis. Our assumptions are based on scheme members’ actual experience of Covid-19 illness from March 2020 to February 2021, and estimates of vaccine cost, efficacy and uptake.”

The projections show that funding the rollout of vaccines to members of all Discovery Health-administered schemes will cost around R1.2 billion to R1.4 billion, based on the Department of Health’s pricing per dose and depending on take-up rates and vaccine mix.

Discovery said that these costs could reduce as global supply improves and that these weighted averages assume a mix of single- and double-dose vaccines.

These projections also include the costs of the vaccines themselves as well as the costs associated with cold chain integrity and logistics, and costs related to giving people their Covid-19 vaccination.

Benefits

While medical schemes are mandated by law to provide Covid-19 vaccines as a prescribed minimum benefit to members, Discovery’s data also shows that resultant savings far outweigh the costs of treating Covid-19 in the member base, Noach said.

“Let’s compare the total cost of R1.4 billion of funding vaccines to the costs incurred for the funding of care for a medical scheme member who contracts Covid-19 – currently averaging between R11,500 and R70,000 per episode per age group.

“Costs are highest in scheme members above the age of 60 and in those under the age of 60 who have chronic conditions.”

Based on vaccine efficacy data, Discovery assumes that those scheme members who are vaccinated against Covid-19 will experience a reduction in infections and serious illness in line with published evidence, Noach said.

“Given that the number of scheme members who contract Covid-19 is known for this historic period, we can calculate the savings in respect of those scheme members who are vaccinated against Covid-19 on the basis that they should experience up to a 94% drop in the risk of experiencing severe disease requiring hospitalisation, as well as a close to 70% reduction in out-of-hospital costs.”

These improvements in a vaccinated scheme population are expected to yield net cost savings after allowing for the cost of vaccines for schemes administered by Discovery Health of around R2 billion – depending on the ultimate cost per vaccine dose administered.

“All in all, savings far outweigh the costs of treating Covid-19 in the member base let alone the extensive societal and economic benefits associated with the vaccine programme,” said Noach.


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The costs associated with treating Covid-19 in South Africa: Discovery