Dr Ryan Noach
The COVID-19 pandemic has put the spotlight onto every facet of healthcare. This has driven a focus on innovation to create efficiencies across the care continuum and to future-proof as far as possible.
Status of the COVID-19 pandemic
Most immediately, concerns over a fourth wave of COVID-19 infection in December are premised on the higher mobility expected in this period.
It is likely that COVID-19 will become endemic, changing the pattern of infection to date from surges causing local epidemic outbreaks, to a continuous steady-state of seasonal, endemic (like influenza) infections. Clearly, this could be impacted by the advent of new variants, which may pose new threats.
The pattern of the infection going forward is largely dependent on COVID-19 vaccination rates and the transmissibility of known and potentially new COVID variants.
The economic impact of the pandemic and associated lockdowns has impacted employment resulting in industry contraction of 1.8% during the 20-month period at hand. Despite this challenging economic landscape, Discovery Health Medical Scheme (DHMS) which represents almost 57% of the open scheme industry, was able to further grow market share by 1.2% in 2020. This is indicative of a recognition of the importance of medical scheme cover over this period and a flight to quality by scheme members.
Notwithstanding the industry contraction, DHMS has experienced an impressive recovery during 2021, growing by more than 27 000 lives on a net basis for the first 8 months of the year.
Financial support to scheme members key to navigating pandemic-driven pressure
DHMS demonstrated agility to reduce the financial pressure on members over the period of the pandemic and implemented several financial support programs – including premium concessions for members and SMEs – providing relief to members of DHMS amounting to R370 million during 2020.
An innovative break from the market trend and norms – to freeze contribution increases and delay the usual inflationary increase by 6 months during 2021 – saved members R2.2bn in would-be contributions for the period, and resulted in the lowest real increase in scheme contributions in the open scheme market – a 2.95% weighted average increase for 2021.
This carefully considered strategy balanced the higher-than-expected capital surplus against the consumer economic pressures, to use the scheme reserves to cross-subsidise claims for a short period of time – simultaneously ensuring that the scheme contributions remain aligned to the pace of medical inflation. This strategy was singled out and commended by the Council for Medical Schemes as an innovative means of providing member support through the pandemic period. For 2022, DHMS has once again deferred annual contribution increases (of 7.9%) to 1 May. Overall this means contribution relief to the value of more than R4 billion to members.
Digital healthcare offerings change the script around access to quality healthcare
The COVID-19 pandemic has driven an explosion in demand for highly affordable digital healthcare offerings that allow for ubiquitous access to healthcare and lower patient and provider COVID exposure risk.
In September this year, the South African Medical Journal published Discovery Health’s findings which demonstrate the impact of providing almost 40 000 high-risk scheme members with pulse oximeters to use while recovering from COVID-19 at home. Members shared readings from these devices with their doctors to ensure early detection of a decline in blood oxygen levels. All in all, home monitoring using a pulse oximeter was found to be linked to 48% lower likelihood of death in this cohort.
Discovery Health was well positioned for the global swing to digital ecosystems and has since enhanced its existing digital platform through various digital product enhancements. This includes the Connected Care platform which enables home-based care for members either in lieu of hospitalisation, when discharged early, at risk of readmission post hospital discharge, or in need of palliative care.
By August 2021, multiple DHMS members recovering from COVID-19 at home had accessed Hospital at Home through Connected Care, allowing them to be remotely cared for and monitored in the dignity and comfort of their own homes. This benefit provided hospital-level care through the third wave of infection, particularly important in the context of capacity constraints in hospitals across the country at the time. Members’ need for enhanced medical support was met through cutting-edge, 24-hour remote monitoring, full access to equipment, doctor, or nurse virtual consults and/or face to face doctor and physiotherapy consults.
Buffering future volatility
Between July 2020 and August 2021, DHMS covered COVID-19 related costs exceeding R8bn.
Over this time, health-seeking behaviour has changed resulting in much lower utilisation of non-COVID healthcare. The net impact has in fact led to scheme surpluses and increased schemes solvency levels, giving members peace of mind about the financial stability of DHMS during a global pandemic. This situation both allowed for the deferred contribution increase mentioned earlier, and has put DHMS in a position to solidly manage the future healthcare utilisation demand – which will take three forms:
- Elastic healthcare: Such as elective (non-urgent) surgical admissions and procedures, and out-of-hospital healthcare utilisation. These will increase as focus on, and fear of exposure to COVID-19 declines in time.
- Non-elastic healthcare: Such as when infants are admitted to Neonatal ICU (which declined by 14% year-on-year – 2019-2020 – as a result of lower rates of elective caesarean sections over the period).
- General health-seeking behaviour: In 2020 DHMS recorded a 7.5% decline in risk costs compared to 2019 owing to the general de-prioritisation of non-COVID healthcare. DHMS data to August 2021 show a 55% decline in breast cancer screening, 20% lower registration depression treatment and 27% fewer diabetes (HbA1c) screening tests – three examples in which advanced illness significantly affects quality of life and treatment costs. We are starting to see a much-needed resurgence in demand here and have worked to proactively to meet the cost implications to the Scheme and assist members holistically to deal with the clinical impact of later diagnosis and delayed care.
The COVID-19 pandemic will continue to define the healthcare landscape for some time to come. As all-consuming as COVID-19 has been, we must take a bird’s eye view of healthcare as a whole to ensure readiness to meet future utilisation demand, and secure ongoing financial stability in the medical scheme industry as a whole.