Dr. Ryan Noach, CEO of Discovery Health
In September 2022, Discovery Health Medical Scheme (DHMS) announced that its members will only pay more for their membership from 1 April 2023, instead of 1 January 2023. This is the third time the scheme has deferred annual contribution increases to provide financial relief for its members. The 2023 increase will be announced in February, to ensure careful alignment with medical inflation.
Reflecting on 2020 and 2021 and the carefully-considered contribution-increase freezes, it is pleasing to note that the brilliant actuarial calculations that informed the strategy, achieved almost exact alignment of our projections with actual claims expenditure for the Scheme.
The Scheme’s reserves strengthened relative to regulated solvency requirements because of the significant decline in non-COVID healthcare claims recorded during the pandemic and into 2022. The Scheme’s excess solvency has been used to the benefit of members, with R6.8 billion achieved in contribution savings during 2020 and 2021 through the deferred increases. This also achieved effective annual contribution increases that were 50 basis points below the market over these two years.
The deferral of the 2023 contribution increase generates an additional R1.9 billion in savings for members in the first three months of 2023, bringing the cumulative member savings (returned to members from excess solvency) over the past three years close on R8.7 billion.
Judicious use of excess Scheme solvency provides both financial relief and new benefits to members
In 2023, DHMS is making an unprecedented investment in members’ long-term health and, by extension, into overall Scheme sustainability. The scheme’s aspiration is to help members understand their health status, and take action to address elevated health risks, to ultimately extend their years of healthy living.
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It is well documented both locally and globally, and it is evident within our own database, that the COVID-19 pandemic caused people to defer non-COVID related healthcare. People who were fearful of contracting COVID-19 at healthcare facilities missed essential screening and health checks.
Discovery Health’s data clearly shows screening rates among members are worryingly below pre-pandemic rates. To mention a few key tests, general health checks are down 50%, mammograms are down 15%, pap smears are down 12 % and prostate cancer screening checks are down 10%.
The time has come for us to focus our attention on reversing this trend. When it comes to diseases such as cancer or any form of chronic illness, early detection is fundamental to limiting serious complications and reducing costs in the long term. For example, our data confirms that on average, a person diagnosed at the age of 40 with an early-stage breast cancer has a three times higher likelihood of surviving for five years post diagnosis.
This is why we have introduced a dynamic new benefit through which to support members’ health and wellbeing. Effective 1 January 2023, the Scheme will make its excess solvency reserves available to fund an expanded range of screening and preventive healthcare for members through the new WELLTH Fund.
- The WELLTH Fund is activated by completing a Health Check during 2022 or 2023 (covered by the DHMS Screening and Prevention Benefit). This sets the baseline for a member’s health status. Once the member and all their dependants have completed their Health Checks, they will have access to up to R10,000 in their WELLTH Fund – R2,500 per adult and R1,250 per child – for a range of additional screening and preventative healthcare. Members have access to six broad categories of health screening and preventative healthcare services, including general health, physical health, mental health, women’s health, men’s health, and children’s health. Medical monitoring devices for certain health measurements are also covered.
Alongside significant time and effort invested into ensuring the robustness of our deferred contribution increase strategy, we have also worked hard to strengthen our goal of making our members healthier and enhancing and protecting their lives.
The Scheme’s overall strategy is clear. Our three-year contribution deferral and 2023’s innovative approach to investing in the immediate and long-term health of the DHMS member base – and by extension, the Scheme itself – work hand-in-hand to ensure the Scheme’s sustainability now and into the future.