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The cost of treating cancer is escalating at a rapid pace in SA as more people get diagnosed each year, though the country’s largest open scheme says there is no need to worry about medical aid premiums following suit yet.
The cost for oncology-related treatment at Discovery Health Medical Scheme (DHMS) has increased by 135% between 2011 and 2018, totalling R3.5bn in 2018, a report released by the scheme on Monday showed. And two of the most expensive claims the scheme funded in 2018 cost R3.7bn and R3.6bn each, both related to leukemia, a cancer of blood cells. In fact, the scheme’s top 10 costliest cancer claims all raked more than R2m each.
The cost of treating cancer was highlighted in DHMS’s latest oncology tracker, a report looking at key trends the scheme picked up from claims paid out to treat members who are currently benefiting from its oncology programme. The report also tracks trends of new cancer diagnoses and it showed that the number of people that were newly diagnosed in 2018 rose to 239 out of every 100 000 members. The scheme said the full data set for 2019 is not yet available, but preliminary observations showed a similar trend to what the scheme experienced between 2011 and 2018.
Increase in cancer diagnoses
Since DHMS is the largest open medical scheme in SA, with 2.8-million beneficiaries, the rand amount it pays out for cancer-related treatments would naturally be higher. In December 2018, 36 959 of its members – about 1.32% – were actively receiving treatment for cancer. Of these, 8 731 were newly diagnosed in 2018 and the number of members who are newly diagnosed has increased by 58% since 2011.
While this may raise questions regarding the incidence of cancer in SA, Discovery says its incidence rate – the number of new diagnoses each year – is nearly 40% higher than for the general South African population. SA’s incidence rate increased from 187 to 202 new diagnoses per 100 000 lives between 2011 and 2018 while DHMS’s increased from 228 to 239 new cases for the same number of lives. This means the number of people who are diagnosed each year is rising at both the scheme and country level, albeit at faster pace at DHMS.
“The higher incidence rates amongst DHMS members compared to South Africa as a whole is expected as people are more likely to join a medical scheme when they are encountering health problems, such as cancer,” wrote DHMS in the report.
It added that while this reflected potential adverse selection – a tendency in which more people with high-risk buy insurance than those who are less likely to claim – it was probably also an of increased screening and better diagnosis and reporting in the private sector.
Containing treatment costs
Increased usage of oncology benefits as more people are diagnosed is only one contributor to the increase in costs. DHMS said the other driver of costs was newer treatments regimes. New treatments include new antibodies, the use of biological drugs and personalised cancer vaccines among other things. DHMS said the amount it paid for high-cost oncology drugs increased by 145% from 2011 to 2019 compared to an increase of 4% in the amount paid for other oncology drugs.
But Dr Ryan Noach, CEO of Discovery Health, said as the scheme’s administrator, they will continue doing all they can to manage medical inflation and ensure contribution increases remain affordable. He said Discovery Health is trying out various risk management initiatives and those saved members R6.8bn in 2018.
"An example of how DHMS has managed oncology-related costs is with Trastuzumab, a treatment that has proven to be effective for individuals with HER2 positive breast cancer. Historically, the unit cost was [approximately] R23 000 per vial and the treatment dosage was calculated based on the patient’s weight."
Noach said after extensive negotiations with pharmaceutical companies, its price decreased by 79% over the past 18 months, to R5 000 per unit for similar biological drug treatment.
