PRESCRIBED MINIMUM BENEFITS
Rise in members with chronic diseases raise risk for medical schemes
The proportion of medical scheme members with chronic illnesses has been steadily increasing since 2011, posing a growing financial risk to the industry, the Council for Medical Schemes warned in a report released on Tuesday.
"Patients registered on chronic programmes are sicker and claim more. That should be a concern for medical schemes," said the council’s GM for research and monitoring, Anton de Villiers.
The council analysed data provided by medical schemes for the period 2011 to 2016 and found a significant increase in the prevalence of type 2 diabetes, which rose 35.4% to 31.5 cases per 1,000 members.
The prevalence of high cholesterol rose 19.7% to 41.2 cases per 1,000 beneficiaries and hypertension ticked up 10.6% to 91 cases per 1,000 beneficiaries, it said in its report.
The prevalence of HIV soared 135% to 22 cases per 1,000 beneficiaries.
The council’s analysis drew on data for beneficiaries who had been diagnosed and treated for a condition, and were registered on a chronic disease programme. The analysis excluded people who had not received recent treatment and those who were undiagnosed.
De Villiers said there was a significant increase in the burden of chronic illness in the period, with a commensurate growth in expenditure.
The Medical Schemes Act made it mandatory for schemes to provide full cover for a defined set of benefits, known as prescribed minimum benefits (PMBs). These included emergency care, a set of 270 medical conditions and 26 chronic diseases. These benefits must be paid for from the schemes’ risk pools, not medical savings accounts. Schemes’ expenditure on PMB claims constituted 54% (R73.1bn) of the total benefits paid out from their risk pools in 2016. A fifth of these claims were for chronic diseases.
Insight Actuaries & Consultants joint CEO Barry Childs said the report reaffirmed the medical scheme industry’s view that there had been a considerable increase in the burden of disease, which was a significant cost driver.
Board of Healthcare Funders head of risk and benefits Rajesh Patel said the council’s report underestimated the true extent of chronic conditions in the medical scheme population, as it drew on data reflecting people who had received a diagnosis.
A previous study by the Human Sciences Research Council had found much higher chronic disease prevalence in the general population, suggesting schemes needed to do more work to identify members with undiagnosed medical conditions, Patel said.