Discovery defends admin fees

2012-07-10 17:45

The Discovery Health Medical Scheme (DHMS) has defended its total administration fee of R2.8bn in the last financial year.

"(Our) administration fees are in line with the market," said principal officer Milton Streak.

The matter was raised by two members at the DHMS annual general meeting in Johannesburg last month. The board of trustees had decided at a November meeting to conduct an independent review, said Streak.

"This is not a once-off exercise, but part of a continuous process which has been highlighted at all AGMs."

Business Day reported on Tuesday that DHMS members wanted an independent review, and a detailed breakdown of administration fees paid to Discovery Health last year.

The scheme's administration fees were the second-highest in South Africa, at R102 per average beneficiary per month, according to the newspaper. Trustees were also told by members to commission an independent review of the value for money provided by Discovery Health.

Streak said while it was critical to assess the costs paid by the scheme, it should be judged by the total premiums paid related to the scheme's benefits.

DHMS's non-healthcare expenditure was below the average level charged by other open medical schemes, he said.

Administration and managed healthcare fees were within industry benchmark levels, comprising 10% and 3% of annual total contributions respectively.

Streak said fees paid to Discovery Health were increasing at a rate markedly below the consumer price index, the standard measurement for inflation.

Discovery Health, owned by JSE-listed Discovery Holdings [JSE:DSY], generates 90% of its operating profit from the scheme.

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  • deabreu - 2012-07-10 18:19

    I had no idea tha Discovery was run by government and tender thieves! They refuse to pay their member's medical costs but have the nerve to pay themselves these types of fees! Pathetic!!!! See this thread:

      steve.dupreez - 2012-07-10 18:40

      IN April and May I had cardiac treatment (pacemaker, abalsion, angiogram and 3 stents placed) to the value of R398000 and all accounts paid within the week the accounts was submitted by the service providers. In June I had emergency ear operation on a Saturday and by the next Friday the account was settled. So I can not agree with your statement that they refuse to pay member's medical costs.

      victor.tamaranui - 2012-07-10 18:59

      Even when Government Enterprizes are profitable these detractors such as yourself have a whinge. I suggest you have a Mindset issue to resolve.

      cherri.pye.5 - 2012-07-10 21:57

      Over the past few years, my daughter has had to have numerous operations each costing roughly R80-R100k and not ONCE has Discovery not paid the costs involved. If they are not paying, try reading the rules of the scheme or better still, see what is covered by the plan you've opted for and you'll find the reason/s why your bills aren't being paid. If you're paying the hospital plan subscription don't expect the benefits of an executive plan.

      Witchbladesa - 2012-07-11 11:05

      I have to agree with deabreu because what was told to me about the scheme and what I have recieved are two different things. They first tell you go have all these tests done to prove that you are healthy then they take it off your saving that when you really need it the doctors are phoning you cause your savings are up. So far I have had no benefit and have been argueing the point with my consultant for a month already.

  • gieljam.gomtor - 2012-07-10 18:28

    Of course they would they are protecting their own while all the service providers in turn are protecting their own and they see how much they can gain while this is all at the expense of the paying members pain.

  • carl.debeer.33 - 2012-07-10 18:46

    Discovery is subsidising rural clinics and ARV's and me as a member pays for this.Time to change!Medicines that I could get two years ago on my current plan I can now only get on the top medical plan!?

  • hannes.bez.3 - 2012-07-10 18:50

    I have had nothing else but exceptional service from Discovery, however, it would be nice to know what salaries and especially bonuses the fat cats at the top paid themselves and their major shareholders.

      wendy.webb.980 - 2012-07-11 16:58

      A medical aid does not have shareholders.

  • victor.tamaranui - 2012-07-10 19:00

    Interesting to see what the Major Bank's Admin Fees equate to.

  • joyce.roper.35 - 2012-07-10 19:49

    I am using my wife's logon. Discovery has been fairly good to me until recently, now I have to pay in the difference for some of my chronic medicines because my Cardiologist does not want me to take certain Generics, previously discovery paid for them in full. 2 problems that I do have are the expense of their "Glossy" magazine which is a waste of money and them getting involved in other things that are not to do with their core business

  • sibusiso.mkoko - 2012-07-10 22:29

    Health care is a right, not a commodity. Eliminate all possible Capitalism now (CEOs making millions a month). Patiently waiting for the NHI.

  • hannelie.blok - 2012-07-11 07:53

    I am writing under my wifes name,this is my idea, our msa (savings plan) at the end of the year is approx 5-8K left , sometimes more, they take 25% admin fee, this is "stealing" our contribution as i have paid this during the course of the year.they must give you the option if you want the money back, then charge the 25%,no problem, if you decide to leave it and invest it,they must take everybodys bits left and invest these in a low/medium risk fund and then the clients (us) can decide if they want to add to amount every year and say in 10 years you have generated 50-150k of savings, then when member requests this money they can ask a 10% admin fee as the money has earned more this way, can you imagine the money generated if everybody did save like this and at the end of your working life you have created a very nice bonus to your pension? or is this the perfect pension plan, you need medical aid but everybody struggles to save for their old day's,looks like a win win situation, regards, Volker Blok

      sticky.toffee - 2012-07-11 09:41

      eish hannelie.blok's husband...And what about those members (which to my knowledge are the majority) who do not have anything in their savings account at the end of the year? Almost a good suggestion.

      danmotaung - 2012-07-11 11:20

      Hannelie's husband, I totally agree with you. This is a question I have been asking myself as to why my R13, 000 saving each year is not invested instead of staying there for these vultures to steal. I lead a healthy lifestyle and most of the time the contribution is lying there not accumulating any interest.

      wendy.webb.980 - 2012-07-11 18:48

      I don't understand where this 25% comes from. I've never had to pay that. Anyway, why don't you just go with a major medical expenses option, ie hospitalisation and chronic meds, and set up your own interest bearing personal savings account wherever you want it. This works very well for anyone who is on a Total Cost to Company pay package where you decide on your level of coverage and pay the full amount. You could then keep a few thousand in eg a Capitec account earning 5% for immediate use, and save monthly in unit trusts or EFTs, and then transfer from EFTs to savings account as that account gets depleted. The only reason to go with a Saver option on your medical aid is where you are on a basic salary plus benefits where your employer pays a certain percentage of your medical aid, in which case your employer will be paying that percentage of your medical savings account contributions.

  • Ian - 2012-07-11 10:13

    Just because your costs are in line with the market, does not mean you are operating efficiently and not over charging your customers!

  • konstabel.koekemoer - 2012-07-11 11:34

    I have been with Discovery Health for almost two decades and have fortunately never needed to claim outside of my msa (medical savings) portion. And I have never had any issues with the payment of msa claims. However Discovery is an expensive scheme and they should look at reducing their admin fees to make their offerings more competitive.

  • len.murozvi - 2012-07-12 13:11

    wow, its medical aid guys. the GPs got paid less than R2b by discovery in same period. So admin is more than your family practitioners fees put together.

  • len.murozvi - 2012-07-12 14:27

    Doctors are rich and they dont need the money , but trustees and administrators need it badly. So doctors shut up and see the patients while the trustees push the papers and count the money!

  • john.markham.737 - 2012-07-15 17:04

    You don't have to be black to steel from the poor! They come in all colors. The rich! Tonight they pray for the poor people that is out there in the cold, hungry and sick. Tomorrow they prey on the same people, taking everything they can. It is time the poor stand up and claim what they are entitled too!

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