“I wouldn’t join Discovery Health if you paid me. They’re too expensive and they don’t pay your claims.”
We’ve heard this often enough, but how true is it? Is it a case of tall trees catching much wind?
Hopefully, it’s good news although there is some bad news.
So, how overpriced is Discovery Health?
It seems a lot of people feel quite the opposite about Discovery Health being expensive and are keen on joining. Here is why we say that:
Every single day of 2018 so far, Sundays included, 900 people have made the decision to join the Discovery Health medical scheme.
They can only come from one of two places:
- Either they’re people who have just found work or
- They’re coming from other medical schemes.
Now, as anyone who knows a thing or two about the medical scheme industry will tell you, the lifeblood of any medical scheme is having more people join than leave. The more people who join, the more money flows into the pot to pay the bills, the better for everyone, right?
Not necessarily it turns out.
The last thing you want is to have a growing membership of unhealthy people draining the pot. A 50 year old man with high blood pressure, high cholesterol, a coronary bypass, and diabetes, pays the same as does a perfectly healthy 20-year-old female.
Since medical schemes can’t ‘fire’ their unhealthier members (Thank goodness!), they need a way to attract healthy members who aren’t likely to claim, just to balance the scales.
Discovery Health it seems has found the secret recipe.
Of those 900 people a day who join, their average age is under 30. Younger people have fewer health issues.
Now to that all-important question…
How much more will Discovery Health cost in 2019?
Their average increase across all plans comes in at 9, 2% for next year.
Bear in mind that 1% of that increase is directly caused by the increase in VAT. This leaves us with 8, 2% which also sounds high. What we need to factor in is the rising cost of medical care which is anywhere between CPI + 3% and CPI + 4%. That already puts medical inflation at between 11.2% and 12.2% in 2018 which makes their 9.2% increase a lot more palatable.
According to their research, they are 16.4% more affordable than the market average for the next eight largest medical schemes.
Here is the increase per plan type, comparing the cost of the top plan available for each plan type for a single member:
|Plan Type||Increase||Top Plan||2018 Cost||2019 Cost|
Based on this increase, guess how many people make the decision to downgrade every year?
It turns out that 94% of Discovery Health members choose to remain just where they are.
So, it seems as if most members are quite happy at Discovery Health, but it still doesn’t answer the question of whether they pay claims.
So how good then are Discovery Health at paying claims?
The first thing we need to know is that 2.8 million people rely on Discovery to take care of their health needs. That’s a lot of people to manage.
To put that in perspective, if you were to separate the Discovery Health KeyCare range from the rest of Discovery Health, Discovery Health would still be the largest open scheme in South Africa with KeyCare taking third place overall. 400,000 households belong to KeyCare alone.
- 680,000 people rely on Discovery Health for the treatment of their chronic condition.
- 40,000 people are actively being treated for cancer
- more than 38,000 babies joined Discovery Health as dependants in 2018, and
- Over the past 12 months, 47,500 people have each had treatment costing the scheme more than R100,000.
If you search the Discovery Health website, you will find a graphic showing that, in 2017, 86% of the scheme’s contributions were used to fund claims.
Now for the bad news…
Between 2011 and 2017 the prevalence of cancer amongst members has increased by 45%. Over that time, the cost of treatment has also risen by 103% and R15 billion was paid in claims.
In 2017 alone, more than 8,000 people were diagnosed with cancer.
The most common cancers are:
- Breast cancer
- Lung cancer
- Prostate cancer, and
- Colorectal cancer
There are currently over 200 available treatments for cancer with more than 14 new medicines registered in 2018.
The oncology benefit available on the Executive and Comprehensive range has been upgraded in an effort to combat this. We don’t know about you, but this is scary stuff to read. Is it because of diet or stress or a combination of both?
Blood pressure, Diabetes, and Depression
These chronic illnesses are rising dramatically. Discovery Health is so concerned about this that they have introduced the following:
- Cardio Care for those suffering from hypertension, hyperlipidaemia, and ischaemic heart disease
- Mental Health Care for major depression
Diabetes Care already exists although they are adding a nurse educator programme to make sure medicines are taken, healthy foods are consumed, and that eyes and feet are well cared for.
The biggest problem Discovery Health has found is that patients are not taking their medication regularly.
KeyCare Access has been renamed KeyCare Start and offers a different set of benefits.
KeyCare Plus and KeyCare Core will no longer offer 3 income bands, but instead, 2.
This plan type now offers 3 income bands versus the 4 on the KeyCare Access in 2018:
- R0 to R9,150
- R9,151 to R13,050
- R13,051 and above
Those still on the KeyCare Access plans will be transferred based on their income band as of the 31st of December 2018. They will then have until the end of June 2019 to make any plan changes.
KeyCare Start is built around 17 regional hubs which consist of KeyCare Start hospitals offering the full array of medical, surgical, and emergency services. Each of these 17 hubs is surrounded by the KeyCare Start GP network which is connected to the hub via a referral pathway. Discovery Health refers to it as a “Hub and Spoke” network.
KeyCare Plus and Core
These plans now offer 2 income bands instead of the 3 in 2018:
- R0 to R13,050
- R13,051 and above
Discovery Health noticed that they had become the victim of anti-selection. They noticed that members on the lowest income band were claiming more against chronic illness benefits than members on the other income bands. This was putting the entire KeyCare network at risk, and the decision was made to cancel the lowest income band.
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