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First medical scheme drop-off of paying members in 12 years

The beginning of the end for Medical Schemes(The beginning of the end? We called it – see this article: http://bit.ly/2dpPth2 – ED) The medical scheme industry has delivered negative growth in the number of beneficiaries‚ its first since 2004‚ the Council for Medical Schemes annual report for 2015-2016 shows. http://bit.ly/2ewHwnK

South Africa had 83 medical schemes in 2015‚ with a total number of 8.809 million members comprising 3.950 million main members and 4.858 million dependents.

This report also found that there was an annual decrease of 0.06% in the total number of medical scheme beneficiaries‚ from 8.814 million in December 2014 to 8.809 million in December 2015. The regulator noted that the decrease marks the first negative growth experienced in the medical scheme industry since year 2004.

The total number of beneficiaries of restricted schemes showed a negative growth of 1.1% compared to a 0.79% increase in the beneficiaries of open schemes. In this period scheme contributions increased by a steady 8.1% to R151.6 billion as at December 2015 from R140.2 billion in December of the previous year.

Expenditure on healthcare benefits increased (in nominal terms) by 9% from R127.2 billion in 2014 to R138.6 billion in 2015. Total hospital expenditure by medical schemes comprised R51.4 billion or 37.1% of the R138.6 billion that medical schemes paid to all healthcare providers in 2015.

Total medical scheme expenditure on private hospitals increased by 9.36% to R51.1 billion from R46.8 billion in 2014. The amount paid to supplementary and allied health professionals in 2015 increased by 12.65% from R8.9 billion in 2014 to R10 billion in 2015. This category accounted for 7.2% of all benefits paid by schemes in 2015.

Payments to all specialists (anaesthetists‚ medical specialists‚ pathology services‚ radiology services and surgical specialists) amounted to R32.5 billion or 23.5% of total healthcare benefits paid in 2015.

This amount increased by 10.90% from R29.3 billion paid in 2014. Payments to medical specialists amounted to R9.1 billion or 6.6% of total healthcare benefits paid in 2015. About 55% of the R9.1 billion paid to medical specialists in 2015 was paid to those operating in hospitals. Expenditure on pathology services amounted to R7.2 billion or 5.3% of healthcare benefits paid while expenditure on surgical specialists and radiology services amounted to R7.2 billion and R5.9 billion respectively.

Expenditure on general practitioners (GPs) amounted to R8.6 billion or 6.2% of healthcare benefits paid‚ representing an increase of 5.51% on the 2014 figure of R8.1 billion. The CMS noted that only 11.5% of the R8.6 billion paid to GPs in 2015 was paid to those operating in hospitals.

Medical Technology recorded the most significant increase in the total benefits paid in 2015. The amount increased by 41% from 42.5 million in 2014 to 59.8 million in 2015‚ although this category accounted for less than 1% of all benefits paid by schemes in 2015.

Medicines (and consumables) dispensed by pharmacists and providers other than hospitals amounted to R22.3 billion or 16.1% of total healthcare benefits paid in 2015. This represents an increase of 7.09% compared to R20.8 billion spent in 2014.

Healthcare benefits which medical schemes covered from their risk pools amounted to R124.6 billion in 2015 compared to R114.8 billion in 2014‚ an increase of 8.53%.

Hospital expenditure accounted for 41.1% of risk benefits paid in 2015. Expenditure on medicines accounted for 13.8% of total risk pool benefits. Medical specialists consumed 6.7% of the pie‚ while risk pool expenditure on GPs was R6.4 billion or 5.2% of total risk pool benefits.

The total cost on prescribed minimum benefits (PMBs) for medical schemes amounted to R64.2 billion in 2015. The total risk benefits paid in 2015 was R124.7 billion – meaning the expenditure on PMB-related healthcare benefits constituted 51% of total risk benefits paid‚ a similar percentage to the previous year.

Administration expenditure‚ being the largest component of non-healthcare expenditure in all medical schemes‚ grew by 7.4% to R11 billion between December 2014 (when it was reported at R10.2 billion) and December 2015. Administration expenditure was the main component of non-healthcare expenditure in 2015‚ at 84.6% (2014:84.7%).

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