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Discovery Health and Discovery Vitality today announced their key strategic focus areas for 2013, which build on the excellent performance of Discovery Health and the Discovery Health Medical Scheme (DHMS) over the past few years. In line with the company’s vision of building a sustainable healthcare system for members, Discovery Health announced significant DHMS benefit enhancements, increased access to healthcare for low-income earners, greater rewards for healthy living, and contribution increases of between 9.8% and 11.8% that balance value and cost for DHMS members without compromising the future growth and quality of benefits.
Discovery Health Medical Scheme has performed exceptionally well across all key performance metrics, resulting in continuous strong membership growth. The Discovery Health Medical Scheme has grown by more than 100 000 lives each year since 2008, to over 2.4 million lives. The value offered to members is evident from the following:
Reserves have grown by 11.4% to over R8.1 billion and Discovery Health Medical Scheme has been recognised for its claims paying ability with an AA+ credit rating from international credit rating agency Global Credit Ratings
Ongoing innovation in products and services is a critical objective for Discovery Health. We continuously work to enhance and maximise cover for scheme members. Enhancements over the past few years have included the introduction of the Specialised Medicine and Technology Benefit, the Trauma Recovery Extender benefit, the Insured Network Benefit and the Oncology Benefit to ensure that DHMS members have access to the latest developments in medicine and technology which are often brought to market at a very high price.
Organic membership growth is vital for the sustainability of any medical scheme. However, strong membership growth requires schemes to immediately meet higher solvency requirements, which in turn places inflationary pressure on member contributions. Discovery Health Medical Scheme has taken the view that membership growth and quality benefits are not mutually exclusive and are a prerequisite to ensure value for members and future sustainability.
The scale of our operations is unparalleled in the industry – we handle approximately 38 000 calls per day, with 82% of queries resolved during the first call. We authorise 50 000 hospital admissions per month.
A critical innovation launched during the past year was HealthID, a healthcare information application developed by Discovery Health and a first in South Africa. This initiative aims to improve the quality of care for patients by giving healthcare professionals treating members of all schemes managed by Discovery Health access to their health records. This is made possible through iPad and other tablet technologies.
According to Discovery Health CEO, Dr Jonathan Broomberg, the DHMS contribution increases of between 9.8% and 11.8% are set at a level that factors in benefit enhancements while allowing for growth and solvency requirements, as well as making provision for the effect of increased utilisation and medical inflation.
“Discovery Health has been successful in managing these complex issues and DHMS continues to perform exceptionally well across all key metrics. Our strategic focus during 2013 will be on continuing to provide the best of care to all our members while enhancing benefits, and rewarding people for maintaining good health, and lastly, ensuring access and affordability,” Dr Broomberg said.
Linked to the issue of sustainability in healthcare is the significant impact the Vitality wellness programme has on people’s lives while at the same time, offering unique competitive opportunities. The growing incidence of chronic diseases of lifestyle presents a significant challenge for countries, economies, businesses and individuals. Vitality’s tangible and measurable impact on morbidity and mortality risk in health insurance and its positive effect on related costs, are drawing international attention. Studies that include Vitality members have shown that good nutrition and regular exercise are key factors in reducing the incidence of chronic illness. We have also learnt that social support and peer encouragement are essential ingredients in improving participation and engagement.
Our key enhancements to the Vitality programme in 2013 focus on further improving access of healthy food choices through a partnership with Woolworths that expands the HealthyFood™ offering. Further exciting initiatives draw on the exploding trend of digital communities and use technology to track and measure healthy behaviour. By removing the financial barriers to mobile communications, we are enabling a digital wellness community in which members can personalise their health journey by giving them more opportunities to earn points and be rewarded.
More about Discovery Health’s key focus areas for 2013
1. New and enhanced benefits to extend members’ cover
Expanding the DHMS Insured Network Benefit gives more cover for day-to-day generic medicine, blood tests and GP visits. This benefit kicks in once the Medical Savings Account has run out
2. Introducing a new plan at the entry point of R450: KeyCare Access Plan
In 2013, DHMS is introducing a new plan in the KeyCare series, the plan range for the lower-income market. KeyCare Access offers a low-cost entry point for lower-income earners and people who are currently uninsured. It provides cover for the healthcare areas members value most: private GP visits, emergencies and accidental trauma in a private hospital, childbirth and care for newborns in private hospitals and elective procedures in our contracted network of state facilities. At the core of this plan is the belief that if the correct primary care is received initially, further complications may be avoided. In addition, to manage the implications of ongoing anti selection by individuals on the lowest KeyCare income band, the lowest income band will fall away from 2013. KeyCare members on the lowest income band will be able to choose between joining the Keycare Access or the KeyCare Core options, or can remain on the KeyCare Plus option at a higher contribution rate.
3. 2013 contribution increases: balancing cost and value
Contribution increases must balance affordability and sustainability of healthcare cover. In 2013, contribution increases will vary by plan to maintain this balance, while keeping DHMS as the most affordable choice in the market across the entire spectrum of healthcare needs.
Three main factors have driven the contribution increases for 2013 of between 9.8% and 11.8%: tariffs, which are closely correlated with CPI; demand side factors that reflect changing demographics such as ageing membership, increasing disease burden and adverse selection; supply side factors that are due to advances in medical technology and practice; and benefit enhancements. Demand side factors tend to create pressure on the highest and the lowest cost plans in a medical scheme, with the result that claim levels vary across plan categories. In order to maintain an equitable contribution level, the Scheme’s contribution increases for 2013 reflect these differences.
Another factor which has placed inflationary pressure on contributions is the significant growth in Scheme membership – it has grown by more than 100 000 lives each year since 2008. This impacts contributions in that reserves must immediately be held for new members to maintain the regulatory reserve requirements.
It is important to note that the administration and managed care costs paid by DHMS to Discovery Health, have been deflationary over the past few years, to the extent of a 4% real reduction over the past four years. These reductions are expected to continue and reflect ongoing economies of scale as DHMS continues to grow. These reductions have assisted in reducing the overall contribution increase.
4. Improving members’ experience in the healthcare system
We have developed a range of online support tools and technologies, and smartphone applications to help our members navigate the often complex healthcare system. It is now more convenient than ever for members to manage their health plans online. They can keep track of benefits, authorise hospital admissions, order medicine, find healthcare professionals, manage chronic conditions and keep track of claims online. The Discovery smartphone app enables members to access their personal health records, order door-to-door medicine delivery, check medicine prices and alternatives, track claims and medical spend, request documents, view information on hospital procedures, translate travel cover into one of five languages, and watch our educational videos.
5. Rewarding healthy living: enhancing the HealthyFood benefit, LivingVitality and a powerful mobile benefit
Discovery is an authorised financial services provider.
Discovery operates in the healthcare cover market in South Africa, the United Kingdom and China; the life assurance market in South Africa and the United Kingdom; as well as the long-term savings and investment market, and short-term insurance market in South Africa.
Vitality, Discovery’s wellness programme, is the world’s largest scientific, incentive-based wellness solution. It provides individual and corporate wellness initiatives in South Africa, the United Kingdom, the United States and China. The global Vitality membership base now exceeds three million lives.
Discovery’s core purpose is to make people healthier, and to enhance and protect their lives through financial products that clients need and want.
Launched in 1992, Discovery Health is South Africa’s largest healthcare funder and manager of medical schemes. It manages 14 medical schemes.
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