Picture: 123RF/nito500
Picture: 123RF/nito500

The Covid-19 pandemic could cost medical aid schemes billions at a time when their income is expected to decline as an increasing number of financially distressed members downgrade their medical aid plans or are unable to pay for them at all.

Discovery Health Medical Scheme (DHMS), which has more than 2.8-million beneficiaries, expects the pandemic to generate additional claims ranging from R7bn to R31bn from medical schemes in SA.

Discovery Health said the average cost per hospital admission for Covid-19 patients is R75,000, more than three times what this would usually cost the scheme.

The equipment required to treat a patient is a contributing factor. As an example, "ventilators cost in the region of R340,000", said Deon Kotzé, head of research and development for Discovery Health.

"The cost of testing is expected to be material with multibillion-rand projections of testing costs for DHMS members over the next 12 months. In addition, depending on the extent and severity of the Covid-19 outbreak, it is likely that claims for the treatment of Covid-19 patients will materialise."

In addition, DHMS must be financially ready to pay for vaccinations, home monitoring and other likely clinical requirements emerging from Covid-19's natural course.

The minister of health has approved a submission from the Council for Medical Schemes for the inclusion of Covid-19 as a prescribed minimum benefit, which means for those who opt for a downgrade, their plan will still cover any Covid-related costs.

Discovery Health reports fewer members joining the scheme compared with the same period in 2019, with an equivalent number of members withdrawing.

"People are losing their jobs and can no longer afford a medical scheme, so they are either downgrading or their debit orders are bouncing," said Graham Anderson, the former CEO of Profmed.

Profmed has seen an increase in applications for downgrades. "Sixty percent of our members are facing financial difficulty," said Craig Comrie, Profmed's CEO.

Meanwhile, Fedhealth has also noted an increase in debit order returns.

But in tandem with the reduction in earnings from current and new memberships, medical schemes say there has been a reduction in claims.

"We have seen a 30% decrease in members going to hospital or accessing their general practitioners [GPs]," said Comrie.

Anderson believes the industry figure leans more to an 80% reduction in GP visits because "people are staying at home".

DHMS and Fedhealth have seen a marked reduction in typical in-hospital claims that would be expected at this time of year.

These are specifically elective procedures, "procedures that can be postponed until after the crisis", said Jeremy Yatt, principal officer at Fedhealth.

Yet there has been an increase in chronic medication compliance and the utilisation of flu vaccines, according to Fedhealth.

While the reduction in claims may place the schemes in a slightly stronger financial position, there is concern about patients not attending to their mental health.

"When comparing the period 1 March to 30 April 2020 with the same period in 2019, we have seen a reduction in mental-health claims. There was a 6% increase of psychotherapy consultations in March 2020 relative to 2019, however in April 2020 these consultations were significantly reduced, resulting in a combined reduction in psychotherapy visits of 22% for the full period," said Kotzé.

Admission rates to facilities for mental-health conditions reduced by 30% during this period, driven by reductions in admissions for depression and bipolar mood disorder, Kotzé said.

Comrie said: "Up until April what has been worrying is members with psychiatric problems not seeking advice or consulting their specialists. There has definitely been a drop-off in terms of those visits actually happening. We are worried that people need to be very careful of missing visits and the impact on their mental health."