JOHANNESBURG – To appreciate your medical scheme cover, you have to be really sick says Dr Jonny Broomberg, CEO of Discovery Health Medical Scheme.
While you are young and healthy and hardly ever see a doctor, you might wonder if this big monthly charge is worth it. When you need a lung transplant for R1m – as does your correspondent – you will bless the day you bought good cover.
After several howls of protest in the media both from patients and from doctors at what they claim are reduced benefits and increasing premiums, Broomberg took time out to explain the premiums and the benefits of cover.
He said benefits in the past four years have increased by 7% more than premium increases.
Said Broomberg: “The medical field is full of opposing interests – there is the tension between the sick and the healthy. People want rich benefits at low premiums. Providers want to maximise income, provide quality service with minimum intervention.
The medical schemes are not for profit. They have to maintain solvency. We administer the scheme to make sure premiums meet claims. It is a complex environment rife with the blame game. Members, doctors and hospitals blame the schemes, and each other. People think I am paying more, getting less, someone’s ripping me off. My purpose is to explain the costs and benefits and to show you we have one of the best systems in the world at relatively low cost compared to rich countries.
Broomberg pointed out: “R5 000 per month buys totally comprehensive medical cover for a family. The same money buys a R250 000 car or a R600 000 house, both of which can be used daily. The medical scheme has intangible value and is used infrequently. It is a grudge purchase.”
Broomberg explained that medical schemes are designed to cover those hit by really big bills. The young and the healthy subsidise the old and the sick on the understanding that one day everyone gets to the latter lamentable state.
People who are gravely ill claim more – 2% of members account for 20% of spend. That is R3.5bn a year. The 2% are sufferers of complex diseases over which they have no control. Some 8% of members have significant diseases with simple diagnosis and 10% are well but at risk, while 80% are well.
The most expensive single items for Discovery in December were a lung transplant for R992 000, critical care for R622 000 and premature babies needing operations – R588 000.
The top 10 conditions ranked by number of hospital admissions were: lens procedures (cost R24m), Caesarean sections (R32.4m) digestive system with scopes (R26.6m), pneumonia and whooping cough (R18.7m) and tonsil and adenoid procedures (R18.7m).
He said “insatiable demand” for health services was a global phenomenon. Unlike IT, medical technology advances are more and more costly. Thanks to this technology, people live longer, which further drives costs. Healthcare costs universally outstrip inflation.
Medical inflation is running at 10.9% pa and general inflation at 5.4%. That gap is typical worldwide.
“Hospital tariffs are well controlled. We negotiate with the hospitals every year and share risk. They have high underlying costs, especially rising nursing salaries.”
Broomberg said there were several ways to make savings. He said that in the US 90% of surgery patients leave hospital the same day. In SA only 10% do.
“Why not here? There used to be day clinics but most have been bought by hospital groups and shut down.
Government’s single exit price for medicine has been a very powerful suppressant of cost.
Volume is critical for hospitals and for the medical schemes. Discover claims to hold administration costs down because of its 2,6m members.
Broomberg reported that cancer claims have increased by 80% in the past three years. Discovery Health is covering 25 000 cancer patients and paid R500m in chemotherapy benefits. Oncology is unlimited on all its plans.
Specialty medicines for rheumatoid disease, Crohn’s disease, Ankylosing Spondylitis, ulcerative colits and other complaints are highly effective. These are not withheld even though they are hugely expensive. Discovery has experienced a 30% increase in the cost of SMTB medication overall. One higher plan options the cost rise was 45%-60%.
Broomberg cited several glaring examples of abuse in allied health care (psychology, occupational therapy, physiotherapy, chiropractors, podiatry, homeopathy and even art therapy).
A family of five claimed R200 000 of allied health spend. The eldest child visited an occupational health therapist 156 times in a year, the second child visited a physiotherapist 50 times and the mother 150 times a year.
A single member aged 32 visited a biokineticist three times a week for personal training. A single member saw a physio twice weekly for tension headaches, a child aged five saw an occupational therapist for low muscle tone at a cost of R22 000.
One biokineticist advertised group training packages for sports events. “Medical aid rates” were charged – and claimed. Packages were available for groups and teams and there were specific packages for Comrades, Two Oceans and Argus.
“When are these costs legitimately medical costs? When are they general fitness, educational and other?” asked Broomberg.
The wealthy are most likely to use their allied medical benefits at the drop of a hat. They are the first to send their children for therapy that can go on and on. The phenomenon is most visible in the northern suburbs of Johannesburg and in the Cape Winelands.
“One of my friends said the difference between Joburg in Pretoria is that if a kid has a problem at school, in Joburg they go to a therapist. In Pretoria they get a wallop.”
According to Broomberg, members are getting better value from their medical schemes. There is unlimited cover for those with highest need, new medical technologies are key cost drivers.
“The quality of care in SA private health system is among the best in the world. I get this constantly from people who move here from Canada, Australia and the UK.”