‘Sicker’ medical scheme members ‘behind cost rise’

BY TAMAR KAHN, 05 SEPTEMBER 2012, 06:19 | 3 COMMENTS Picture: THINKSTOCK Related multimedia Council for Medical Schemes launches annual report MEDICAL scheme members are getting older, sicker and staying in private hospitals for longer, according to the Council for Medical Schemes’ annual report. The council and the Department of Health have both accused private hospitals of overcharging patients, and the government is intent on introducing price regulation for the private sector. Stellenbosch-based research group Econex said yesterday that the council’s data were broadly in line with research it published last week, showing that rising expenditure on private hospitals is driven by increased utilisation — and not, as some industry players and the council argue, because healthcare providers are fleecing patients. Medical schemes’ average annual contribution increases consistently outstrip consumer price inflation, which was 5% last year. The schemes received R107.4bn in contributions last year, 11.3% more than in 2010. Expenditure on private hospitals grew 9.7% to R33.8bn, according to the report, released yesterday. "The trends are in line with what we found," said Econex economist Mariné Erasmus. "The disease profile is worsening and there are more elderly patients as a proportion of the whole." Older, sicker patients make more demands on their medical scheme’s funds and tend to be in hospital for longer periods. However, Council for Medical Schemes registrar Monwabisi Gantsho disagreed with her. He said an as-yet-unpublished study by the council had found that utilisation rates were falling. "Our utilisation project research does not agree with Econex," he said. The council’s annual report covers medical scheme activities for the 2011 calendar year, and its 2011 financial year, which began on April 1. Its analysis of the burden of disease affecting medical scheme members shows a striking increase in the prevalence of the four most common chronic diseases. Hypertension rose to 122.4 cases per 1,000 average beneficiaries a year from 115.6 in 2010; high cholesterol rose to 55.7 cases per 1,000 from 52.1 in 2010; type 2 diabetes rose to 34.3 from 31.8 in 2010; and asthma rose to 31.6 from 28.8 per 1,000 beneficiaries. The average length of stay in private hospitals in 2011 was 3.2 days, from three days the year before. The report shows the average pensioner ratio of medical schemes for 2011 was 6.6%, a slight increase on the 6.5% of 2010. Medical scheme administrator Discovery Health said data for the almost 2.7-million members of Discovery Health Medical Scheme "strongly confirmed" the Econex study. "Members are getting older and sicker and utilisation is the key reason that medical inflation rises faster than CPI (the consumer price index) and faster than tariffs," Discovery Health CEO Jonathan Broomberg said yesterday. "These demographic changes indicate that there is a claims inflation of between 2% and 3% each year, over and above tariff increases and any other increases which arise from changes on the supply side, such as new hospitals, new technology and procedures." Private hospital group MediClinic took issue with the council’s assessment of the private hospital sector, saying it had failed to take account of the effect that increased utilisation was having on schemes’ expenditure. "To assume that the increase in scheme expenditure on private hospitals is mainly driven by hospital price inflation is simply incorrect, especially when the data indicate otherwise," MediClinic said yesterday. "It is therefore of great concern that the council recommends the regulation of private hospital prices as a solution to "ever-escalating costs in the industry - Business Day Live - Comments by Sonny - Have they taken the time to access the salary increases of Medical Scheme CEO, Trustees and executives? What about all the fraud that is committed by employees, members and medical practitioners? Prices for 'day patients' are inflated to meet those of 'overnight' patients. South African Police Service Medical Scheme (POLMED), is a closed medical scheme registered under the Medical Schemes Act (Act 131 of 1998). Only employees of the South African Police Service (SAPS) appointed under the South African Police Service Act (Act 68 of 1995) and their dependants are eligible to be members of POLMED. The Board of Trustees is entrusted with ensuring the optimal operation of the Scheme to the benefit of the members. The Board of Trustees comprises of seven individuals that are elected and seven that are appointed by the National Commissioner. The Principal Officer, supported by Scheme Management is responsible for executing the directives of the Board and ensuring that POLMED offers its members an excellent service.