A combination of a surge in chronic conditions in SA and young people who neglect to join medical aid is pushing up medical inflation, with the fortunate few South Africans who enjoy the privilege of having medical aid set for hefty increases in premiums next year.
The country’s largest open medical scheme, Discovery Health Medical Scheme, which represents 57.8% of the open medical scheme market, last week told its clients to expect contribution increases ranging from 7.4% to 10.9%, depending on their plan next year.
Half of the scheme’s members will see a rise of 8.4% or less in the new year.
According to the company’s data, beneficiaries with chronic conditions have grown from 15.8% in 2008 to 33.1% this year. Discovery Health, a health insurance division of Discovery, administers Discovery Health Medical Scheme (DHMS).
Discovery CEO Adrian Gore said the rise in people with chronic conditions, together with investments in the latest medical technologies, was fuelling medical inflation, which outpaces headline inflation.
“The actual price of goods and services is not the problem. What we are trying to flag is the demand side. What happens is that the way the law works currently, everyone pays the same rate and you can move in and out freely. The result of that is often young people only join medical aids when they are sick. The net result is that over time the population you cover gets older and sicker,” Gore said.
“That accounts for probably 2% of inflation. Accumulatively over 10 years, probably 25% of that you’re paying is because of that force. On the surface you got increasing chronicity and age, but the cause of it is this egalitarian system, which is expensive.”
“That said, our role is to manage that. We have launched ... products to appeal to young people. We are managing chronic people better with Vitality and personalised health pathways.”
Chronic diseases, also known as noncommunicable diseases, are defined broadly as conditions that last one year or more and require ongoing medical attention or limit activities of daily living or both.
Stroke and heart disease, diabetes, cancer and high blood pressure are some of the diseases that fall into this category.
According to data from Stats SA, deaths due to major noncommunicable diseases increased by 58.7% over 20 years, from 103,428 in 1997 to 164,205 in 2018. The median age at death was 65 for males and 69 for females.
Medical scheme membership has remained flat for many years, largely due to SA’s high unemployment rate. Just more than 9-million people were medical scheme beneficiaries at the end of 2022, the latest year for which data is available.
Bonitas Medical Fund CFO Luke Woodhouse last week told freelance health writer Kathy Malherbe in a piece shared with Business Day that costs in the healthcare sector were influenced by some unique factors such as inflation, unregulated pricing and the fluctuating exchange rate.
“Although healthcare inflation slowed during the Covid-19 pandemic, industry data suggests that since 2023, healthcare inflation has started to rise to levels equivalent and beyond prepandemic levels,” Woodhouse said.
“Furthermore, patient health is likely to have deteriorated during the pandemic when patients were hesitant to be screened and book consultations with their doctors. ”
With Tamar Kahn
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.