Fedhealth Medical Scheme
There hasn’t been an awful lot of good news doing the rounds lately. In fact, as a nation, South Africans are collectively fatigued by all the bad news, and we don’t need to spell out the starring role COVID-19 has played.
The pandemic has again emphasised how precious our health is – and how important having quality medical aid cover is to protect it.
According to Fedhealth statistics, the average cost per COVID hospital admission in 2021 has been R163 000 so far, with an average length of stay in the hospital of 10 days per COVID admission. To date, the largest single COVID hospital account has been R4 million.
Not many of us can carry these types of costs out of our own pocket, which is where good medical aid makes all the difference when your clients need it most.
By mid-July 2021, Fedhealth had paid some R375 million in respect of COVID expenditure since the onset of the pandemic. The largest driver of this cost was hospital care, which accounted for
R240 million of the total cost, followed by pathology (i.e. COVID tests) claims which amounted to R55 million.
Observations around medical aid membership and claims in the time of COVID-19
Here are a few trends that Fedhealth has noted amongst its own members as a result of the COVID-19 pandemic:
- During the 2021 renewal period, 5% of Fedhealth members downgraded. This is just marginally higher than what the Scheme usually sees in pre-pandemic years.
- Fedhealth noted a decrease in the number of members cancelling their medical aid membership.
These two observations suggest that Fedhealth members are prioritising medical aid as they see the value of it, in the midst of a pandemic that shows no signs of slowing down anytime soon.
From a financial perspective, the following was observed:
- The financial impact of the pandemic was quite different in 2020 relative to the 2021 experience. The year 2020 was characterised by hard lockdowns and consequently, a large number of procedures were postponed as people tended to stay away from hospitals and only opted for admission when it became absolutely necessary. While COVID claims accounted for 5% of total contributions in 2020, the reduction in non-COVID claims in 2020 as a result of these postponed procedures was significantly lower than what was budgeted for. Investment performance was also affected by the market crash in March 2020 and although the markets saw some recovery toward the end of 2020, investment returns still ended up under budget.
- The Scheme was impacted much more severely by the pandemic in 2021. As lockdowns eased, postponed procedures could not be put off indefinitely and we saw a “catch up” of these pent-up procedures leading to large increases in non-COVID claims. Furthermore, the peak of wave 2 and the severe wave 3 occurred in 2021 leading to much higher COVID claims than seen in 2020. The projection for COVID claims for 2021 is around 10% of contributions, which is double that of 2020.
When considering claims in the year to come:
- Fedhealth is concerned about the impact of the pandemic on preventative care and the reduction in the number of members having their annual check-ups and screenings. We are worried about the long-term impact on members and costs of diseases not picked up as a result of the pandemic, which then present at an advanced stage, where costs of therapy, surgical procedures and treatment may be much more, and members overall outcomes and prognoses poorer.
But there is hope
Although most of us – the healthcare industry included – may feel blindsided by the pandemic, and the ripple effect caused by its impact on basically every aspect of our lives, it has also been a massive learning curve.
Maybe the most important of these learnings is the newfound realisation that health is our most precious asset… And that the right medical aid cover for your clients’ needs, life stage and budget is non-negotiable in protecting their health. Without it, the consequences can be simply disastrous, like COVID-19 has just proven.
Medical schemes, such as Fedhealth, offer a wide range of affordable plans that will help protect your clients’ health. Visit fedhealth.co.za or call 0860 002 153 to find out more.