THE medical scheme industry is financially healthy despite the low growth in membership (0.4%), according to Professor Yosuf Veriava, chair of the Council for Medical Schemes (CMS). In his chairperson’s report released at the announcement of the CMS’s annual results, Veriava said the average age of beneficiaries – 32.1 years – has remained almost unchanged in the last three years. He believes, however, that membership growth in the younger age groups would contribute to keeping costs down. The average cost of total benefits utilised by beneficiaries has increased by 10 percent and the amount for legislated prescribed minimum benefits (PMBs) by 13.4 percent. Total hospital expenditure by medical schemes – which includes ward fees, theatre fees, consumables, medicines and per diem arrangements – consumed R46.6bn or 37.6 percent of the R124.1bn that medical schemes paid to all healthcare providers in 2014. Total medical scheme expenditure on private hospitals increased by 11.6 percent to R46.4bn from R41.6bn in 2013. In-patient admissions constituted 88 percent of the R46.4bn paid to private hospitals in 2014 (same-day in-patient admissions constituted 12 percent).
Medical scheme payments for medicines dispensed by pharmacists and providers other than hospitals amounted to R20.5bn or 16.6 percent of total healthcare benefits paid. This was an increase of 8.9 percent compared with 2013. The most significant increase – 14.5 percent to R9.4bn – in benefits paid in 2014 was in respect of supplementary and allied health professionals. Expenditure on general practitioners (GPs) amounted to R8.2bn or 6.6 percent of healthcare benefits paid, representing an increase of 7.6 percent on the 2013 figure of R7.6bn. Only 10.9 percent of the R8.2bn paid to GPs in 2014 was paid to those operating in hospitals. Payments to medical specialists amounted to R8.2bn, with about 54 percent of this paid to those operating in hospitals. Expenditure on pathology amounted to R6.6bn or 5.3 percent of healthcare benefitswhile expenditure on surgical specialists and radiology services amounted to R6.4bn and R5.3bn respectively.
The report indicates that the distribution of out-of- pocket expenditure across disciplines has not changed from 2013 to 2014. Medicines and specialists still account for the bulk of out-of-pocket expenditure. In absolute terms, out-of-pocket expenditure increased by 11.9 percent from R18.5bn in 2013 to R20.7bn in 2014. The CMS pointed out that these figures are an understatement of the true extent of out-of-pocket expenditure as beneficiaries do not claim for all out-of-pocket spending on healthcare. It also highlighted the fact that out-of-pocket expenditure of South African medical scheme members was at least 18 percent of the total healthcare cost – well above the WHO guideline of 15 percent. The CMS analysis found that the level of out-of-pocket expenditure is influenced by benefit design. Beneficiaries do not claim when they realise their schemes will not be paying for their claim.