Discovery: 2013 benefits and contributions

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
• Over 90% of specialist interactions are within direct payment arrangements that minimise out of pocket payments for members and increase reimbursements for healthcare professionals
• Over 87% of GP interactions are within our GP network, again reducing member co-payments
• 97.1% of hospital claims, including specialists, were covered in full in the past year.

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.

Membership growth in medical schemes

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.

Future strategic plans for all members

“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.

Financial barriers

 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
• Upfront discount of 20% on all frames and lenses at an extensive new optometry network for members of DHMS and all other schemes managed by Discovery Health
• Introducing savings on chronic care products – from January 2013, members of DHMS and all other schemes managed by Discovery Health registered on the Chronic Illness Benefit for hypertension, hyperlipidaemia, diabetes or asthma will qualify for up to 25% cash back on a wide range of items purchased from Dis-Chem stores countrywide
• Providing an exclusive list of branded chronic medicine for DHMS Executive Plan members (in addition to the Chronic Drug Amount and formulary)
• Our LivingVitality online programme, which empowers members to understand and manage their chronic conditions using experts, tools and social media.

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

• The HealthyFood benefit has seen significant growth since its launch in 2009, and to date over 320 000 individuals have activated this benefit. In addition, Discovery Vitality has paid over R210 million in HealthyFood cash backs. To improve access to healthier food choices, we have entered into a partnership with Woolworths as a HealthyFood partner. From 1 January 2013, DHMS members on Executive or Classic Health Plans can receive up to 25% cash back on their HealthyFood purchases at Woolworths.
• LivingVitality helps members to track, improve and engage for better health and fitness. It’s an interactive platform that gives members fitness, nutrition and health support to manage their wellbeing.
• VitalityMobile is a new benefit in partnership with CellC that connects Vitality members through free calls and boosted data.
• We have extended the Discovery partner platform to give members more rewards for looking after their health. Our new partners include Builders Warehouse and Builders Express, Incredible Connection and Sunglass Hut.
• We are introducing the Health Wallet, a flexible funding alternative for members’ healthcare expenses. It can be activated on all DiscoveryCards and operates seamlessly alongside a member’s medical scheme plan.

(Press release, September 2012)