Discovery Health Medical Scheme (DHMS) prioritises members’ wellness, alongside continued focus on sustainability

Johannesburg, 31 July 2024: Discovery Health Medical Scheme (DHMS) continues to demonstrate strong performance, financial certainty and sustainability for members’ peace of mind.

Presenting at the Scheme’s Annual General meeting (AGM), Discovery Health Medical Scheme Principal Officer, Charlotte Mbewu, reflected on the achievements of the 2023 financial year. Results presented show that the Scheme provides funding for high-quality healthcare for members of the Scheme, leveraging innovation to deliver cost-effective and convenient care.

In a complex environment, characterised by economic volatility, changing demographics and affordability constraints, Discovery Health Medical Scheme continued to put the interests of members first by:

• Launching new benefits, particularly in relation to health promotion and disease prevention,
• Enhancing benefits to assist members in funding their healthcare needs,
• Maintaining the Scheme’s strong financial solvency position,
• Maintaining the Scheme’s leading position and market share.

As a result, the Scheme has maintained its strong operational performance, while improving access to healthcare services that will assist in improving health outcomes.

“Our focus on affordability, member-centric benefits, and prudent financial management has yielded exceptional results. We remain committed to supporting members’ health needs and journeys while maintaining the sustainability of the Scheme to ensure that the Scheme can continue funding member claims,” said Mbewu.

In this set of results, DHMS adopted the IFRS 17 accounting standard in line with requirements for all medical schemes in South Africa to apply the new standard for insurance contracts for financial periods ending 31 December 2023. This standard aims to improve transparency and consistency in financial reporting across all issuers of insurance contracts globally. The introduction of IFRS 17 will impact financial statement disclosures; and introduces new insurance terminology. This does not however affect the Scheme’s status as a non-profit entity or how it operates.

Balancing growth and sustainability

Mbewu outlined that a key focus for the year ahead is on continuing to ensure growth in the number of young and healthy members and to continue to reflect the attractiveness and competitiveness of the Scheme. While the total membership was marginally less than it was during 2022, the Scheme had a total of 2 788 242 beneficiaries as at 31 December 2023, representing 57.8% share of the open medical scheme market in South Africa (according to the Council for Medical Scheme Annual Report for the year ended December 2022).

The average age of the existing membership is 37.0 years, only slightly higher than the average age of 36.6 in 2022. “It is promising to note that the average age of new joiners to the Scheme is 25.9 years old,” explained Mbewu. “An increase of less than one year per annum in the average age of existing membership is very favourable as it indicates that many young people continue to join the Scheme and bolsters the Scheme’s ability to achieve appropriate cross-subsidisation.”

Another notable highlight is the low movement of members between plans from December 2023 to January 2024, indicating that members are satisfied and that the benefit design and pricing is appropriate. 95% of members did not change their plan, while 3% upgraded their plan and only 2% downgraded to lower plan type.

“Our members continue to receive outstanding value. In 2022, for every R1 spent on managed care and administration fees, Discovery Health Medical Scheme members derived R2.08 in value. During 2023, Discovery Health Medical Scheme paid more than 6 700 claims over R500 000, and more than 1 800 members claimed more than R1 million from the scheme for much-needed medical cover,” Mbewu continued.

Discovery Health Medical Scheme maintains strong financial position

Mbewu noted that the Scheme remains very competitively priced with average contributions 11.1% lower than the next seven largest open medical schemes in 2024. “This is largely due to Discovery Health Medical Scheme’s effective product design and risk management practices,” she added.

The Scheme has maintained a strong financial position, generating an insurance revenue (previously “contribution income”) of R73.3 billion. Insurance liability to future members (previously “accumulated member funds”) is R28.7 billion (R28.9 billion in 2022). Solvency levels reached 30.60%, comfortably exceeding the statutory solvency requirement of 25%.

“This demonstrates the financial strength and sustainability of the Scheme, and its ability to meet all claim obligations,” added Mbewu.

Excess solvency benefits members through WELLTH Fund

In 2023, Discovery Health Medical Scheme deferred the contribution increase for a third consecutive year, to 1 April, providing relief to its members and passing on the benefit of excess reserves. The Scheme also introduced the WELLTH Fund, a circumscribed benefit, as a mechanism to release excess reserves to its members.

“The WELLTH Fund is an additional screening and prevention benefit to increase health promotion and disease prevention, and to manage the reduced health-seeking behaviour emanating from the COVID-19 pandemic era,” explains Mbewu.

Discovery Health Medical Scheme claims data shows that during January to December 2020, the first year of the COVID-19 pandemic, annual Health Checks carried out by members dropped by 52%, compared to the same period in 2019.

With the introduction of the WELLTH Fund in January 2023, the scheme is pleased to note that the Health Checks rate has not only returned to pre-Covid levels, but exceeded expectations. Thanks to the WELLTH Fund, a 47% increase in Health Checks performed in 2023 was noted. Since the WELLTH Fund launched, an increase in enrolments onto managed care programmes for diabetes, mental health, cardiovascular diseases, as well as the Disease Prevention Programme to proactively prevent disease progression was noted.

Innovation and improved member benefits

“The Scheme continues to find ways to provide value to its members through innovative new benefits. This includes access to mental health preventative screening and internet-based Cognitive Behavioural Therapy (iCBT) in addition to benefits already in place within the Mental Health Programme. The iCBT programme has more than 2 100 active users and boasts a 96% satisfaction score.”

“We have also added access to virtual urgent care, where our members can access a dedicated panel of doctors 24/7. This service is particularly valuable after hours and over the weekend when access to general practitioners is more constrained. The service is also very convenient with members being able to access a doctor from anywhere and it takes less than 90 seconds for a member to be connected to a doctor.”

“Access to the iCBT and virtual urgent care benefits is supported through the new Discovery Health member app, designed to offer a more personalised healthcare journey,” continued Mbewu.

She emphasised that Discovery Health Medical Scheme endeavours to continuously expand members’ access to programmes aimed at improving or maintaining their health and wellness.

“To this end, we are working with our managed care service provider and administrator, Discovery Health to develop and implement personalised additional programmes aimed at managing the burden of disease more effectively as well as assisting our members with recommendations for improving their health.”

Discovery Health Medical Scheme monitors the developments on the National Health Insurance (NHI) Act

During Discovery Health Medical Scheme’s AGM Mbewu, together with Michelle Norton, the Chairperson of the Discovery Health Medical Scheme Board of Trustees, addressed members’ concerns regarding the National Health Insurance Act and its impact on medical scheme members.

“We are closely monitoring the NHI,” said Mbewu. “We remain concerned that in its present form, the NHI Act is unworkable without private sector collaboration and involvement and will not lead to the desired improvements in healthcare for all South Africans. As such, we have proposed that consideration be given to a model that includes multiple funders of healthcare, which is lower risk and more sustainable in the long-term. Given the extent of the funding required for NHI and the complex implementation that lies ahead, there will be no impact on medical scheme members for the foreseeable future.”

“Discovery Health Medical Scheme is participating in the preparation of potential litigation against NHI that is being led by the Health Funders Association (HFA), a non-profit association of healthcare funders and administrators.”

Norton and Mbewu emphasised that Discovery Health Medical Scheme remains committed to constructive and collaborative engagement, with the emphasis on achieving better access to healthcare in the journey towards universal health coverage for all South Africans.

Voting of resolutions during the 27 June 2024 Discovery Health Medical Scheme AGM

The Scheme recently released the outcome of the voting to its members, regarding the resolutions tabled at Discovery Health Medical Scheme’s Annual General Meeting (AGM) which took place on 27 June 2024.

Discovery Health Medical Scheme has confirmed that all of the resolutions were passed and, in terms of the trustee election, candidate Ms Lalita Harie was re-elected as a trustee to serve on the Discovery Health Medical Scheme Board.

Conclusion

“Discovery Health Medical Scheme is proud of its ability to meet the healthcare needs of its members when members and their families need it most”, says Mbewu.

“Looking ahead, we are confident about the long-term sustainability of Discovery Health Medical Scheme. We look forward to continuing to enhance the healthcare outcomes and experience of members in 2024 and beyond,” Mbewu concluded.

Link to the Discovery Health Medical Scheme integrated annual reports and financials: https://www.discovery.co.za/me...