On Monday 23 January, an article, which was titled Discovery Health: chronic meds shock appeared on Health24. A response was requested from Discovery Health.
It is published below in its entirety:
Discovery Health’s role is to fund healthcare of the highest quality for our members. It is against this background that Discovery Health has consistently increased its funding of chronic illness medication every year, from R1.08bn in 2008 to R1.56bn in 2011 (equating to an average increase of 21.2% per member of the Discovery Health Medical Scheme). This note outlines Discovery Health’s approach to chronic illness medication benefits.
Key Chronic Illness Benefit statistics:
Number of members registered on the Discovery Health Chronic Illness Benefit: 363 525 in 2011
Average annual chronic medication spend per member registered on the Chronic Illness Benefit: R4 296 in 2011
Total annual chronic illness medication spend: R1.56bn in 2011
Increase in spend on chronic illness medication per member over the past three years: 6.3% from 2008 to 2011 (including the effect of an 14.1% increase in the number of claimants per 1000 lives)
Increase in spend on biologics in the treatment of chronic illness: 30.87% in 2011 alone
Increase in spend on medication used in oncology treatment: 46.1% from 2008 to 2011 (mostly due to the increase in use of biologics)
Discovery Health offers extensive and flexible cover for medicine to treat chronic conditions
Discovery Health Medical Scheme members who are registered for chronic medicines on the Chronic Illness Benefit have two options available when claiming for their medicine. The preferred option is to claim for medicine that is on our formulary or approved medicine list. Our medicine list includes an extensive range of high-quality, approved medicines for all conditions to ensure our members always have an option of full cover. We pay for these medicines in full at our vast network of pharmacies, offering all our members protection against the risk of co-payments.
We do not limit cover exclusively to medications on our approved medicine list and members have the flexibility of choosing to use a medicine that is not on the list. In these cases, we provide cover up to a fixed amount for medicines in a particular category. This set amount is called the Chronic Drug Amount (CDA). The Chronic Drug Amounts have always been developed with reference to the prices of available generic medicines, and where there are no generic medicines available, with reference to a defined reference group of equivalent products. We have used the same benefit structure of medicine lists and Chronic Drug Amounts since 2007.
The composition of the medicine list and CDAs is not a static process. Discovery Health continuously negotiates with the pharmaceutical industry to ensure favourable medicine prices for our members and as new medicines and more generic medicines become available, the prices of medicines continually change, and are in many cases reduced. The CDAs and medicine list are reviewed twice annually to ensure that they are relevant and reflect these market dynamics. Where any changes do occur, extensive communication is undertaken to members that could be impacted.
As an additional “safety net” for members requiring access to chronic medication that is not on the approved medicine list and priced above the CDA, there is a process whereby exceptions can be applied for and full cover granted on the basis of clinical need. Each of these cases is considered by a clinical panel, in consultation with external advisers, based on the clinical merits of the request. Consequently, no member registered on the Discovery Health Chronic Illness Benefit should be exposed to a gap or co-payment where the benefit structure is appropriately accessed. The average “coverage ratio” (defined as the amount paid by Discovery Health as a percentage of the actual cost) for chronic illness medication for members of the Discovery Health Medical Scheme in 2011 was 86.9%.
It is important to note that there has been no change to the Chronic Illness Benefit structure for 2012. The 2012 review of the approved medicine list and Chronic Drug Amounts forms part of our annual revision based on the pricing movements in the markets.
When we first introduced the Chronic Drug Amounts in 2007, they were implemented for all new members. We automatically exempted pre-existing members using chronic medicines from the application of the rules at that time, to give existing members time to adjust to the new benefit structure. The process of migrating all members to a consistent basis was started in 2009 and recently completed. This ensures that the chronic illness benefits are applied on a fair, equitable and consistent basis across the membership base. We have communicated this process and any potential impact extensively to all members by email and letter, and have telephonically contacted selected members offering alternatives and advising formulary options.
The current medicine list and Chronic Drug Amounts are developed based on best available scientific evidence and are reviewed by external experts to ensure that they provide comprehensive and clinically appropriate cover for Discovery Health members. As noted above, there is also a clinical appeals process that provides exemptions from the Chronic Drug Amount limit for any member who for clinical reasons requires a medicine that cannot be covered within the CDA.
Members may therefore experience co-payments either because they are using medicines that are not on the medicine list or which cost more than the applicable CDA, or because they are obtaining their medicine from a pharmacy which charges a higher dispensing fee than the agreed Discovery Health rate. Some members may be experiencing a co-payment for the first time in 2012 due to the fact that they were previously exempted from the application of the chronic benefit rules, and are now subject to these rules along with all other members as part of the process of ensuring consistent application of the scheme rules.
MedXpress may help to reduce co-payments
Our communications with members advising them of modifications to the approved medicine list and Chronic Drug Amounts allow them enough time to change their treatment to a medicine available on the medicine list (for direct and full payment to the pharmacy) or to continue using the medicine and receive the Chronic Drug Amount.
If members are using a medicine which is not on the medicine list for 2012, or obtain their medicines at pharmacies charging dispensing fees higher than the agreed Discovery Health rate, they may experience co-payments. To help reduce co-payments, members can contact MedXpress, Discovery’s convenient medicine delivery service, where our pharmacists can explain the options available to them. Discovery MedXpress can be contacted on 0860 99 88 77.
Members can also consult their pharmacist or healthcare professional to understand what alternative medicines are on our list or within the monthly Chronic Drug Amount.
Discovery Health has a clinical appeals process available for any member who cannot use a medicine fully covered by the medicine list or the Chronic Drug Amounts.
The 2012 medicine list is available on www.discovery.co.za.
Dr Jonathan Broomberg
Chief Executive Officer
Discovery Health: chronic meds shock
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