Discovery announces 2011 fee increases
Johannesburg - Discovery Health has announced a contribution increase for the Discovery Health Medical Scheme of 7.9% for 2011 across all plans and family sizes.
Discovery Health projects its increase will be approximately 2% to 3% below the industry average.
"We are committed to providing stability and certainty to our members. We're also continuing to invest in technology and infrastructure to enhance the quality of care our members receive in the healthcare system," says Dr Jonathan Broomberg, Chief Executive, Discovery Health.
The core cost factor in the medical schemes environment is the high rate of medical inflation, which in turn is driven by: new medical technologies; inflation in tariffs for healthcare providers and products; as well as the fact that people are living longer with increased incidences of severe illnesses.
Aside from medical inflation, Discovery Health has also factored the impact of membership growth into the contribution increase for 2011.
"The Discovery Health Medical Scheme has had exceptional growth in membership during 2010, growing by 92 000 principal lives and adding a total of 139 000 new lives. New membership growth is positive, as it introduces younger, healthier lives to the risk pool and helps to ensure long-term affordability and sustainability for all members.
"However, it does cause a short-term increase in the reserve requirement. Schemes have to hold 25% of their total contributions in reserve, which means that growing schemes will always have growing solvency requirements. We have therefore incorporated an additional 1% margin into 2011's contribution increase to help build these reserves," Broomberg says.
From a regulatory perspective, Discovery Health is very well positioned to deal with recent regulatory changes, including adjustments in respect of the Prescribed Minimum Benefits and the removal of the National Reference Price List.