Category Archives: Medical Aid

Information on Medical Aid schemes in South Africa

Collaboration addresses the challenges of Covid-19

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“Collaboration between all the stakeholders is the cornerstone of tackling the coronavirus pandemic,” this according to Lee Callakoppen, principal officer of Bonitas Medical Fund. “This includes engaging both the public and private healthcare sector to find a way forward to address the challenges faced by South Africans. Negotiations, strategising and robust discussion with The Council for Medical Schemes(CMS), The Board of Healthcare Funders (BHF), hospital groups, healthcare practitioners and strategic healthcare service providers will enable us to find the best possible solution during this pandemic.”

Lee Callakoppen

Callakoppen highlights some of the key challenges facing consumers and the way forward.

Covid-19 testing
Challenge: Costs and availability of Coronavirus tests

Solution: Negotiation and co-ordination to manage tests and a payment plan put in place

Our administrator and business partners are collaborating with the National Institute for Communicable Diseases (NICD), the Department of Health (DoH), pathology laboratories and the Radiology Society of South Africa to try to monitor and manage the availability and cost of tests. In addition, we are collaborating on the provision and delivery of medicines and co-ordination of treatment available in order to ensure sustained, quality healthcare is available to all members. Bonitas covers Covid-19 as a Prescribed Minimum Benefit (PMB), paying for up to three PCR tests from risk – regardless of the result.

“One of the problems has been a shortage of tests in South Africa and we have urged our members to follow the guidelines from the Government and the World Health Organization, only testing when absolutely necessary, such as when they have come into contact with a known Covid-19 positive case, are showing symptoms and have received a referral from a healthcare practitioner for a test,” Callakoppen says. This step aims to ensure that tests are reserved for those who really need them. These measures also go a long way in helping to curb misuse of tests and mistaking the symptoms of other respiratory illnesses for Covid-19.

“We note that as the number of Covid-19 positive cases increase, there is a significant increase in the number of tests conducted. However, again we strongly urge the public to only test when absolutely necessary or when advised by their Healthcare practitioner to do so, as a shortage of tests could have a much more far-reaching impact on the spread of the disease.”

Addressing affordability

Challenge: Helping cash-strapped members continue paying their medical aid premiums

Solution: Proactive application to CMS for concessions and looking for ways to add value to our members and South Africans

“The economy and livelihoods of many South Africans have been adversely impacted by the pandemic. We definitely sympathise with this and, as the cost of living continues to increase it was very clear to us that affordability of medical aid, as well as daily living expenses, would become a concern. We began engaging with the CMS prior to the issuing of the CMS Circular 28 of 2020 containing Covid-19 Medical Schemes Industry Guidelines to try and offer our members some respite from the harsh economic impact. However, as medical schemes we are highly regulated in terms of our operations. As such there is a lack of parity between the level of relief we would have liked to offer our members to the level of relief that was approved.”

CMS issued an additional industry circular in April 2020, outlining how medical schemes can apply for exemptions to the Medical Schemes Act to launch lifelines to members, such as contribution holidays or accessing their medical savings accounts to cover premiums. The R160bn medical scheme market covers about 8.9 million members, most of whom are subsidised by their employers.

Callakoppen says, “The CMS regulates the industry and has been very specific in terms of what medical aids may and may not do. Schemes are required to request exemptions from the Medical Schemes Act to relax certain credit management policies through the CMS.

“We approached the CMS in April with requests for concessions and have implemented those they approved. At present, our concessions include allowing contributions to be funded from savings. In addition, we have special concessions in place for members who belong to employer groups.”

Despite the regulatory environment, Bonitas has been agile in its approach. “We used the challenges of the current landscape to become more innovative in terms of what we can do, within our environment, to assist our members and South Africans at large with some relief. We therefore introduced free virtual GP consultations to all South Africans through the Bonitas Member App so that they would continue to have access to healthcare during this time.

We continue to keep the issue, of how members are impacted due to the economic challenges, top of mind and this informs your strategies to respond and address the challenges consumers are experiencing.”

Hospital beds

Challenge: Shortage of high care and ICU beds

Solution: Negotiations to have access to facilities outside of network hospitals and standardised tariffs

Together with Medscheme, our administrator, we have implemented tariff enhancements to ensure that sub-acute and day hospitals can accommodate admissions where provincial licence exemptions have been granted, when the time comes.

There are about 25,800 adult acute beds in the private sector and about 3,700 day hospital and sub-acute hospital beds that stable patients could be sent to. In addition, there are 3,600 dedicated paediatric beds nationally.

“As a Fund we have negotiated with hospital groups to ensure that members do not have to go to a network hospital during this time when private hospitals may experience capacity constraints. Our key mandate is to act in the best interests of our members at all times and as such we strive to ensure that they have access.”

Virtual Care 24/7 for everyone

Challenge: How to maintain your health during the Government’s call to stay at home and social distancing

Solution: Virtual Care

Early in April, Bonitas launched its Virtual Care, offering it to all South Africans, at no cost, during the Covid-19 crisis. These virtual medical consultations, with GPs and other physicians, were extended to have a ‘Dr on call’ 24/7.

“We know that illness doesn’t keep office hours,” says Callakoppen, “so we approached ER24 to join forces with us to extend the availability of free consultations to round the clock. This offers peace of mind to anyone who is feeling ill, needs some reassurance about symptoms they are experiencing or requires a prescription. It can all be done virtually, by appointment.

“And, because we understand how severely depressed the economy is, we took a decision to offer this virtual care service, free of charge, to all South Africans, not just our members. All you need to do is download the Bonitas App.”

General Practitioners (GPs)

Challenge: Limited face-to-face consultations

Solution: Opening virtual care up to all healthcare practitioners

The Virtual Care App not only enables all South Africans to get quality healthcare without leaving their homes, but is also an opportunity for healthcare practitioners to sign up to ensure that they see patients during this time. Healthcare practitioners have seen a substantial decrease in patient numbers in their rooms and many are struggling to keep their practices afloat.

By registering on the Virtual App and informing their patients that they are consulting virtually, we hope that this will assist them in increasing patient consultations and enable South Africans to get sound medical advice. We have been in consultation with GPs in terms of finding the best treatment protocols and communicating with our members so that they follow these pathways.

Medicine deliveries

Challenge: Maintaining your chronic medication regime during lockdown

Solution: Home delivery of chronic medication and extended scripts

Two years ago the Human Sciences Research Council (HSRC) and the Medical Research Council cautioned that chronic diseases such as diabetes and heart disease are becoming the biggest threat to South Africans’ health. The three most commonly associated Covid-19 comorbidities are hypertension (or high blood pressure), diabetes and obesity. “In our country we have a very significant burden of these three diseases. These risk factors are important to take into account because they are also serious factors when it comes to the severity of, and complications related to the Coronavirus infection,” says Callakoppen.

“We are pleased that Pharmacy Direct has continued to deliver chronic medication to members during the lockdown. This has helped to ensure that they are following their treatment regimens, especially in light of the pandemic. In addition, the changes to laws around prescriptions means that these are now valid for 12 months which helps to alleviate some of the burden on the healthcare system.

“It is important to ensure that there is no disruption for members or to their chronic medicine management – which includes coaching and compliance – during the lockdown period.”

“We believe implicitly that tackling this unprecedented pandemic requires us to work together to find the best practice to deal with Covid-19,” says Callakoppen.

Medical schemes hit back at CMS for impeding Covid-19 relief measures

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The Board of Healthcare Funders (BHF) is hitting back at the Council of Medical Schemes’ (CMS) claim that medical schemes aren’t looking after their members during the Covid-19 pandemic, by challenging the regulatory body’s lack of response to proposals from the industry.

Dr Katlego Mothudi, MD, Board of Healthcare Funders

The challenge stems from a circular issued by the CMS relating to Covid-19 exemptions and guidelines, which states that “medical schemes have not applied for exemption, they are denying beneficiaries relief despite extreme Covid-19 conditions”.“

Dr Katlego Mothudi, managing director of the BHF, pointed out that at the beginning of the Covid-19 pandemic, the BHF approached the CMS to grant collective exemptions to allow schemes to extend relief such as financially distressed members a contribution holiday during Covid-19 period. “The CMS did not support the BHF recommendations noting that the regulator would not allow for a collective application; but requested that medical aid schemes make individual applications for exemption consideration.”

While some schemes submitted individual applications, others looked at their rules to establish areas in which they could provide support without making the applications to the CMS, given that members needed an immediate solution. Individual exemption application would have been a lengthy process, especially after the collective application was declined. These processes were assessed against the schemes’ rules and any departure from these would have been adequately addressed through a resolution by the scheme’s board of trustees.

The fact that some schemes did not apply for the exemption does not mean that they did not offer assistance, it means they were able to identify areas within the scheme rules to support members without going through the individual exemption application proces.

The BHF further clarified that, over the past three months, medical aid schemes have come up with various innovative solutions to support members in these testing times. Some schemes have allowed members to buy down temporarily during this period to ensure that members remain covered while they manage their finances. Others have provided payment holidays, determined through an individual needs assessment basis, while others have allowed members to utilise their accumulated savings to pay for contributions.

“Since the beginning of the pandemic, the BHF has made a number of submissions to the CMS to support medical schemes to provide relief to members. This includes a request for CMS to set up a framework to enable medical aid schemes to collectively negotiate costs for all Covid-19 related cases. In April, the BHF submitted a draft framework to support this proposal. It was accepted by the CMS with a view to seek ratification of the process from the National Department of Health, however, to date the industry is yet to receive feedback on the status of the proposed framework.”

Non-responsive regulatory environment

A non-responsive regulatory environment presents a big challenge to the various stakeholders, particularly the beneficiaries, says Mothudi. “At the moment, medical aid schemes are compromised as they cannot collectively negotiate for effective pricing for hospital admissions or anything related to Covid-19, to increase affordability for members; because the proposed negotiation chamber has not been established, as per our submission to the council.”

The BHF further raised concerns on the delay in finalising the low-cost benefit options (LCBO) framework, which would have allowed the schemes to register these options as part of their service offering. The LCBOs would have provided a much-needed financial buffer for members who can no longer afford to pay premiums during this time. This process was initiated almost four years ago when the BHF submitted an application on behalf of the 52 medical aid schemes represented under the funding representative body. The CMS declined the application at the time as well.

Crisis

“We are now in a crisis, and medical aid schemes find themselves in a space where they have to carefully navigate the regulatory environment to ensure that they continue to provide support to their beneficiaries. The solutions that medical schemes came up with are in fact commendable under the circumstances and it is very encouraging to see how BHF members have stepped up in various other interventions to tackle the challenges presented by Covid-19,” he says.

The CMS needs to further engage with the recommendations that have been put forward to enable medical schemes to do more for members. In addition, constant, clear communication between the regulator and the medical schemes is essential for the council to understand interventions that have been put in place by medical schemes for those members in financial distress. The BHF is concerned that no attempts have however been made to achieve this,” says Mothudi.

What you need to know about medical cover during the Covid-19 pandemic

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A rise in Covid-19 infections is inevitable as the lockdown eases and people head back to work and school. It is therefore important to understand exactly how medical schemes will cover testing, hospitalisation and treatment in order to avoid unexpected medical expense shortfalls.

Tony Singleton, CEO, Turnberry Management Risk Solutions

Couple this with many people experiencing financial hardships during this time and one must also try and stretch the benefits that their medical scheme has to offer. So, what should people be looking out for?

Covid-19 testing is a prescribed minimum benefit (PMB)

The Council for Medical Schemes has mandated medical aids to consider Covid-19 testing a PMB. All registered medical schemes in South Africa need to provide PMBs on all plans offered to members, regardless of plan type. In terms of the Medical Schemes Act, these PMBs are a set of defined benefits that relate to 270 categorised conditions that all medical scheme members can utilise.

How is Covid-19 defined and what is covered by PMB?

It is defined as “an acute respiratory illness caused by a novel coronavirus”; and annexure A of the Medical Schemes Act (which lists PMBs) has been amended by the minister of health to include this new illness.

Along with these 270 conditions that the medical schemes are obliged to fund from the risk benefit, they are able to curb their risk by requiring members to utilise designated service providers (DSPs) only. By using providers in the medical scheme’s network, members can rest assured that their scheme will cover that in full. Should a patient choose not to use a DSP, then the medical scheme is only required to pay in line with medical aid rates.

There are certain instances in which patients can make use of a non-DSP, but these extend to life-threatening emergencies.

What is and is not covered?

According to Covid19 PMB guidelines, the recommended test at PMB level of care is the reverse transcription polymerase chain reaction (RT-PCR) test. In a situation where a person is to be treated out of hospital and they present with symptoms, they must be screened by a healthcare provider who deems the test necessary due to the suspicion that the patient may have Covid-19. Regardless of test results, as long as the member was screened by a healthcare professional and was deemed necessary by a medical professional (who is a DSP) and the RT-PCR test is used, it must be funded from the medical aid’s risk benefit as a PMB. Where the person tests negative, any follow up care is not covered. In the case of a positive test, hospitalisation (including ventilation) and medical management of the patient’s condition thereafter would be funded from the risk benefit as a PMB and not from the members day-to-day benefits.

Where patients are to be admitted to hospital for other reasons (such as elective surgical procedures) they may be requested to undergo a Covid-19. test beforehand. In these situations, it is not PMB level of care therefore medical aids do not have to fund the test from the risk benefit. Here, the cost of testing would most likely come from the members day-to-day benefit or be self-funded. Should a person voluntarily choose to make use of a non-DSP then, that member is likely to be exposed to a medical expense shortfall for the in-hospital treatment.

It is also important to note that while the focus of many is on Covid-19 it is not the only reason why people are being admitted to hospital during this time period. People are still admitted to hospital for essential treatment such as heart attacks, fractures, cancer treatment, organ transplants.

Is gap cover going to help with Covid-19 medical scheme shortfalls?

Many families are facing financial hardship and gap cover is the smart way of minimising the risk of costly in-hospital medical expense shortfalls. This is the difference between what private healthcare providers charge and the rate the medical aid pays for in-hospital treatment. Moreover, hospital admission may not always be as a result of Covid-19, however, in the current circumstances people need to be prepared for out of pocket medical expense shortfalls – regardless. It is also important for consumers to understand their medical scheme coverage and even more importantly the PMB benefits for Covid-19.

How likely are medical schemes to catch the Covid-19 wave

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When the clock struck midnight on 31 December 2019, and wishes of health, happiness and prosperity for the new year were extended by all, no one could have imagined the trauma that 2020 would bring only a few weeks later.

Covid–19 was declared a global pandemic and within a few short weeks, this virus with flu-like symptoms drove almost all countries into a lockdown, forcing the majority of industries to shut down and confine people to the safety of their homes. While one understands, to an extent, the rationale for declaring a shutdown, it is questionable that the short-, medium- and longer term effects of virtually shutting down an economy were and are fully understood. As President Cyril Ramaphosa, said, these are unprecedented times that required almost unprecedented and drastic decisions.

South Africa is gradually moving out of what is reported as one of the longest official lockdown periods globally, now approaching almost 100 days, in essence five times longer than the 21 days as originally announced. Industries have been left devastated with the tourism and leisure, restaurant as well as health and beauty among the hardest hit. One such industry that may just produce results better than expected, or perhaps, better than most of the other insurance type industries, is that of medical schemes.

Credit risk

For most South Africans in formal employ, it is compulsory that they be a member of a private medical scheme unless they are already a dependent on a spouse’s medical scheme, either way then, they are ‘covered’. So significant is this, that in almost all cases of formal employment, the medical aid payment is deducted directly by the employer, as would be similar in the case of PAYE, UIF, etc., and paid over to the medical scheme. This greatly reduces the risk that an employee does not have sufficient funds to cover his/her required monthly medical installment and also eases the risk of non-collection of premium by the medical scheme itself.

When an employee leaves their job they have the option of either continue on the scheme and pay directly or withdrawing from the scheme. As a rule of thumb, if a member misses a payment to the scheme, the membership is terminated or at best suspended unless an arrangement with the scheme is made. Cover for the employee terminates immediately, as does the scheme’s financial exposure to the (former) member. Either way, the scheme is protected against ‘credit risk’.

For the vast majority of salaried South Africans who have continued to earn a salary during lockdown, or even a partial salary, the employers would have had to continue paying over the employee’s contribution to the medical schemes. So from a collection and revenue perspective, revenue from active members are likely to remain close to budget for a medical scheme, even during Covid-19. Fortunately, the number of people who fall gravely ill as a result of contracting Covid–19 and that require admission to hospital, let alone ICU, is very low in % terms, around 4-5%. Again, that bodes well for medical schemes whereby only a very small fraction of their members may require the scheme to pay for expensive hospitalisation. If so, could medical schemes not be caught by the coronavirus in 2020?

Interestingly, either because of the majority of members’ reluctance to go for the more routine type medical checkups such as dentistry, physicians, physiotherapy and elective type surgeries in an effort to decrease the risk of exposure, or, because many medical facilities are simply only offering emergency medical treatment to reserve hospitals for ill patients, it is very likely that the majority of medical scheme members have not used as much of their medical aid benefits as would ordinarily have been the case six months into the financial year in a ‘normal’, non-Covid-19 year.

The schemes then, by way of analogy, would have collected almost all the premiums it should have collected from active members (inactive members pose no financial risks to the scheme) but incurred significantly less expenses than ordinarily the case. With numbers of coronavirus cases continuing to rise at an increasing rate, it can be expected that this trend may continue well into quarter three and perhaps quarter four of 2020. Could this somewhat ironically leave schemes in a financially healthier position than ordinarily would have been expected during this Covid–19 pandemic?

Results

Medical schemes will soon be presenting their interim, six monthly results to the public. It will be of extreme importance that the information be disclosed in a way as to explain the outcomes and fluctuations in results.

The schemes’ audit committees, risk and governance committees as well as boards of directors have a fiduciary duty in this regard to protect both the interests of the scheme itself and its members by producing corporate reports that are reliable, accurate and free from material misstatement. Caution will also have to be applied when the schemes start considering the percentage increase in member contributions for 2021 and will need to balance their current reserves, future reserve requirements, medical costs that are certain to rise at an increasing rate in the foreseeable future due to currency weakness and general above inflationary increases. Schemes will also need to factor in the likelihood that they will see an increase in 2021 of the elective type treatments mainly as a result of members either not being able or not willing to do so in 2020.

Detailed notes disclosures, judgements made, assumptions used and forecasted cash flows will be required to produce information that will be understood by both shareholders, investors, and the scheme members themselves. Clear and transparent information will be of the utmost importance as to understand the results and what the remaining six months may bring. There is, perhaps, a danger that the schemes end up producing results that would appear to reflect that the schemes are benefitting financially as a result of the pandemic and escape the financial burden that the majority of both the country’s and world’s companies are experiencing – a case of medical schemes being immune to the Covid-19 pandemic?

Never before has the importance and reliability of financial and integrated reporting been this important to members, investors, suppliers, regulators and the country itself. Covid-19 is indeed not just a medical pandemic, but a financial one too.

Challenger Type – The Dramatic Disruptor

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Globally recognised for Vitality, its revolutionary shared-value platform, Discovery is changing the face of insurance and financial services globally.

Through Vitality, a powerful science-based behaviour-change platform, Discovery drives shared value across its businesses that benefits clients, the business itself, its partners and broader society. In so doing, Vitality has shaped the Discovery Group’s ability to offer a product and service that is significantly superior to anything that existed in the category before.

Contrary to popular category belief, Discovery Vitality is not simply a rewards programme. Rather, it is a radically different way of structuring and designing products based on improving behaviours that are directly linked to insurance and financial risk. By improving behaviours related to risk, Discovery is able to monetise improvements in health and other behaviours and generate more value for clients.

We see this Discovery ethos in action in relation to the current Covid-19 pandemic. Through a comprehensive and coordinated approach, Discovery’s objective was to ensure its employees, clients, business partners, healthcare professionals and broader society were protected and able to stay healthy and safe during the pandemic. Through a range of product innovations that were tailored to meet changing needs during the pandemic, support for clients and other stakeholders such as financial advisers and healthcare professionals, as well as a dedicated focus on distributing accurate and up-to-date information about the pandemic, Discovery responded with agility to the Covid-19 pandemic.

Strategic and collaborative partnerships to benefit all South Africans

Prompted by the Covid-19 crisis, Discovery partnered with Vodacom to make its online doctor consultation platform, Dr Connect, openly available to all South Africans for Covid-19 related consultations. This sophisticated digital platform ensures safe, virtual access to healthcare professionals at no charge with patients not having to travel to a healthcare facility – a critical benefit that contributes to the health and safety of both patients and healthcare providers.



Discovery also partnered with hotel groups to create ‘managed isolation facilities’ for those infected with Covid-19 to ensure comfort and ease of recovery, without risking infection of those in the primary household.

Further still, Discovery partnered with its digital education provider to offer free learning support for grades 4-12 to support parents with school-going children at home.

But Discovery’s innovative partnerships have been a hallmark of the brand, long before crisis-time. Discovery Vitality has partnered with a range of brands since inception to create a substantial behaviour-change and rewards ecosystem for its members.



Product responsiveness in a time of change

During the national lockdown, Discovery supported clients through various premium relief initiatives and tailored products and benefits to the current Covid-19 environment. Earlier in May, the Group launched a number of product innovations that address the unique aspects of Covid-19, including a world-first severe illness benefit that provides comprehensive cover for multi-organ failure associated with Covid-19, dynamic discounts and rewards for its car insurance clients that reward them for driving less and staying home during the lockdown; as well as comprehensive Covid-19 benefits for individuals and employers that cover appropriate risk assessment, testing and treatment referral.

In addition, through Vitality, Discovery launched an online at-home series that makes it easier, not just for members, but for all South Africans and even people around the world, to stay healthy and active while at home. The series focuses on staying fit, eating healthily, and taking care of mental wellness.



Discovery adjusted points-earning structures and reward categories and partners to better support and encourage clients to keep fit and healthy while at home. Through the Vitality at Home programme, clients can take part in various healthy activities and earn points and rewards. Discovery members are rewarded extra points for buying, eating, working out and behaving healthier while in lockdown. This includes double cash back rewards from retailers and reward vouchers for online and gaming entertainment.

This product responsiveness is evident across the Discovery suite of products, and especially in its life insurance business, where product innovations and benefit enhancements aim to provide unique and comprehensive protection cover for clients’ changing needs, all while rewarding them for healthy living with Vitality. Notably, Discovery has also launched the world’s first behavioural bank that leverages the Vitality model of incentivising positive behaviour change. Through its innovative Vitality Money benefit and Discovery Miles, the Group’s single rewards currency across the full product suite, clients are encouraged and rewarded for managing their money well.

Transforming culture

Discovery Vitality isn’t just about adaptive products and innovative behavioural models. It builds and connects communities and, in so doing, evolves the global wellness culture.

Case in point is the Vitality Open challenge that encouraged participants to drive safely and be more active through personalised goal setting on the Discovery app. The platform was available to all South Africans. It was based on raising awareness around the need to change behaviours that lead to road accidents and by encouraging physical activity to address the rise in noncommunicable diseases.



The Vitality Running World Cup (postponed due to the coronavirus outbreak) was launched in 2020 as an annual free-to-enter, global running competition. Designed to inspire entire countries to become more active, and therefore healthier through the programme, Vitality is incentivising healthier behaviours on a global scale.



These products and platforms from Discovery and Discovery Vitality indicate dramatic shifts in how the financial services and insurance category can be transformed through a shared-value approach. Indeed, by challenging the boundaries of expected actions and responses, this South African Dramatic Disruptor is impossible to ignore, the world over.

https://www.discovery.co.za/vitality/join-today
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eatbigfish. is a strategic brand consultancy whose unique focus is challenger thinking and behaviour. Our expertise is grounded in The Challenger Project – our study of how Challenger Brands succeed by doing more with less.

We act as catalysts rather than consultants and, through our collaborative approach, we provide inspiration and frameworks which enable ‘would be’ challengers to deliver breakthrough solutions for their teams and brand.


If you would like to speak to someone, please call or email our local representative for Africa Middle East: Delta Victor Bravo (Pty) Ltd

Contact David Blyth –

moc.hsifgibtae@divad

Telephone: +27 71 483 8514

Not all medical scheme payment relief options are created equal

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There may be financial relief available for medical aid members, but it will depend on whether the scheme has been granted contribution relief approval by the Council for Medical Schemes (CMS), as well as what plan the individual is on.

The CMS will consider payment relief options on a case-by-case basis, and each scheme approval may be different. Additionally, the plan that a member is on will impact the options available to them. Members on the same scheme may not necessarily have the same contribution relief to them as the next member. For example, a member on a traditional or hospital plan will not be able to use vested medical savings as a relief option but could possibly look at downgrading their plan, says Susan Weedman, Alexander Forbes Health senior consulting manager.

The majority of the schemes within the industry have applied for contribution relief for their membership in similar ways, one of them being by using vested medical savings which have accrued from previous years to fund medical aid contributions for a period of time. The amount and period over which this can be done will vary per member, and per scheme.

The medical scheme payment holiday issue and Covid-19 costs

Medical aid schemes have not been spared the impact of Covid-19. Several solutions are being put forward to support members in shouldering both the financial and the clinical burden of the virus, while ensuring that schemes will be able to manage the expected number of increased admissions…

15 May 2020

“Members may also lower their monthly contributions by downgrading their current plan. Further, schemes that offer plans that are based on income, for example premiums based on salary, may also allow members to downgrade to a lower income band should there have been a reduction in their monthly earnings,” she says.

Some schemes may also offer other alternatives, such as freezing of contributions, payment holidays for a period of time, or using other funding mechanisms to assist in contribution relief. This however, is subject to the scheme and the plan that the member is currently on, and most schemes will advise the member directly if they are eligible for such relief.

There are various solutions to help meet the member’s needs, however, it can be confusing as not all members will have the same solution available to them. Members who are seeking any type of contribution relief should therefore get in touch with their financial advisor or broker to ascertain the relief options available to them and the impact on benefits, since the implications could have far reaching consequences, especially for those with chronic illnesses, or requiring hospitalisation or oncology benefits.

Making sense of the numbers – cases, co-morbidities and costs

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As the number of Covid-19 infections moves over 21,000, both public and private healthcare is going to be under constant pressure. The World Health Organization (WHO) says its Covid-19 data to date suggests that 80% of infections are mild or asymptomatic, 15% are severe infections, requiring oxygen and 5% are critical infections, requiring ventilation.

While projections about the actual number of cases up until November 2020 vary daily, 12 to 13 million infections are predicted for SA. It is also predicted that roughly 3.7 million will be symptomatic with varying in degrees of severity.

Lee Callakoppen, Principal Officer of Bonitas Medical Fund, says, ‘We are following the data closely as the fund represents over 700,000 lives which is roughly 8% of South Africa’s total medical aid membership and 1.2% of the national population.’

Bonitas has monitored international, local and scheme-specific data to assess the incident proportion and to inform its decisions in support of its members and South Africans at large. The fund continues to evaluate this on an ongoing basis as more data becomes available. However, this remains a challenge in light of the limited data available at the time, which impacts modelling.

‘What we do know is that if the pandemic is not managed responsibility and with rigour, it will have a severe impact on the healthcare resources of the country both public and private. The ongoing analysis from a Bonitas perspective, is to ensure that the fund adequately manage its reserves, to ensure that the claims of members are paid when they access benefits.’

Callakoppen offers a round-up of the situation at Bonitas as of 21 May 2020

‘Bonitas has seen approximately 10,000 members being tested with 282 confirmed positive. In relation to the hospitalisation rate, the fund has seen a total of 120 admissions, with a positive recovery totalling 32. Unfortunately, we have sadly lost 16 of our members to the virus.’

The expected number of total infections and level of care assumptions are drawn from international experience to-date and expectations on ultimate detected infection levels, while keeping a view of the local trajectory.

Callakoppen says, ‘Projections are highly uncertain at this time but our actuarial team has estimated around 30% or 215 851 members of the Bonitas population are at risk of contracting Covid-19, based on co-morbidities. Of these 30% are based in Gauteng, 19% in KZN and 15% in the Western Cape. The conservative financial impact to the Scheme could potentially exceed R450m, in addition to annual claims cost which amounts to R15bn annually.

Counting the costs

The key cost-drivers are hospital admissions, additional cost for Personal Protection Equipment (PPE) to ensure healthcare workers and patients are protected, pathology test costs as well as home care and healthcare support to members in the workplace as the economy re-opens.

Callakoppen says the Covid-19 pandemic is having a major impact on the costs of providing healthcare benefits to members. In certain benefit categories such as in-hospital admissions there has been a decline in claims due to the prudent action taken by healthcare groups to defer elective surgeries and only attend to emergency matters. While, in other categories like medication, there has been a marked increase in claims and costs. This trend is set to continue until at least the end of September 2020, as the Covid-19 infections are expected to peak in early August 2020.

Projected levels of care

There is a high level of uncertainty around the level of care that would be required for the Bonitas population over the course of the pandemic, but Bonitas projects that Covid-19 cases will be managed as follows:

  • 20% requiring hospitalisation
  • 5% requiring treatment in ICU
  • 60% requiring treatment at home
  • 20% are asymptomatic or do not require treatment

Hospitalisation can be as high as 6 days in a general ward, 8 days in high care and up to 15 days in ICU.

The role that chronic conditions play

It is undisputed that co-morbidities will affect the outcome of patients who contract Covid-19. Statistics from Italy, one of the countries worst hit, shows that 98.8% of those who died had at least one comorbidity. Almost three-quarters had hypertension while a third had diabetes. It is no different in South Africa. Minister of Health, Dr Zwelini Mkhize, warned early on in the pandemic that South Africa has a significant burden of non-communicable diseases or chronic conditions with diabetes and hypertension topping the list.

The availability of beds

There has been a great deal in the news about the availability of hospital beds, particularly High Care and ICU. The main reason for the lockdown was to ready the public healthcare sector in terms of availability of beds for when the pandemic was at its worst.

‘There are currently 957 ICU and High Care beds in the private sector and 2238 in the public healthcare sector,’ says Callakoppen. ‘Prior to the Covid-19 outbreak, occupancy in state hospitals was around 80%, with about 50% of critical care beds available for use in private hospitals. Based on these figures, less than 3000 critical care beds are theoretically available for use for all South African citizens. About half of those (1500) are intensive care beds, the remainder High Care.’

Elective procedures reduce

Occupancy of critical care beds for non-Covid-19 patients however reduced in April as hospitals and doctors encouraged cancellation/postponement of elective procedures, or shifting these to an outpatient setting, where feasible, to free up capacity. Occupancy is likely to remain suppressed in the short-term, although to a lesser extent as there have been calls for certain necessary elective procedures to continue from May. Bonitas is currently engaging with various stakeholders, to ensure that access to care such as elective surgeries, is available to members and that the appropriate steps are taken to ensure the risk of further spread of the virus is prevented.

It should not be noted that epidemiological models, such as those produced by the Actuarial Society of South Africa (ASSA) model the rate of infection across the entire population, including asymptomatic cases, which might not be picked up in a medical scheme environment, nor will these cases lead to direct claims for the fund. The ASSA model currently assumes that 75% of actual infections will be asymptomatic. There are a wide range of views globally as to the true proportion of asymptomatic cases. The sensitivity of the model output to this assumption means any projections are still highly uncertain at this stage.

Bonitas urges all South Africans to follow the international safety guidelines: Stay home, maintain social distancing, sanitise or wash their hands thoroughly and wear masks in public. For members and non-members who have healthcare concerns and would like to consult a medical practitioner, Bonitas has free, Virtual Care consults with a GP on offer, through the Bonitas app.

Who decides whether surgery is necessary in a pandemic?

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The question of balancing risk versus benefit speaks to the very foundations of medicine. Surgeons recognise that the skills required to get this right are more important than any particular technical skill they may have acquired and are based on years of training, experience, and the evaluation of evidence.The question of balancing risk versus benefit speaks to the very foundations of medicine. Surgeons recognise that the skills required to get this right are more important than any particular technical skill they may have acquired and are based on years of training, experience, and the evaluation of evidence. It is only within the individual doctor-patient interaction that such an assessment can be made.

Medical funders and managed health organisations have responsibilities to their members, clients and trustees to ensure that patient well-being is paramount and that the particular fund is protected from wasteful, irrational or fraudulent expenditure. However, the ultimate responsibility for surgical decisions lies with the surgeon who remains accountable to his patient, his professional societies, his peers and the law. Only in the most exceptional of circumstances would one expect a funder to interfere in a decision arrived at jointly between a surgeon and his or her adequately informed patient. This has always been the case. The current complexities of the Covid-19 pandemic are certainly not a reason to deviate from this principle.

Virtually any medical service can be rendered

A national understanding of the need for on-going surgical services is developing for 2020. Initial calls by the surgical societies themselves to halt scheduled surgery well ahead of the promulgation of any disaster regulations were based on the predictions that the pandemic would peak in April 2020, following which there would be at least some sort of return to normality. It is clear that the crisis will continue well into 2021 and will in fact deteriorate considerably in the coming months, therefore patients requiring necessary surgery must be offered this now.

In terms of regulation 16(2)(a) of the Disaster Management Act of 2020, essential medical services are permissible and a recent senior legal opinion has stated that ‘virtually any “medical service” can be rendered, provided that the legal compliance criteria in regulation 16(6), Annexure E and the Occupational Health and Safety Act can be adhered to’. There is no legal impediment to scheduled surgical procedures being undertaken.

Timing in surgery is everything with a price to be paid when necessary surgery is delayed. The fact that a procedure can be scheduled in no way indicates that it is unnecessary or can be postponed indefinitely. Surgery for cancer as well as conditions associated with intractable pain or severe loss of quality of life simply cannot be delayed by months and months. Many conditions will almost certainly require emergency treatment later, if not managed correctly now. The list is innumerable and these preventable emergency procedures tend to be associated with high medical risk as well as considerable cost.

The risk of patients or healthcare workers contracting Covid-19 in hospital cannot be under-estimated, even if reduced by adherence to guidelines including effective use of PPE. Routine testing of in-patients or patients scheduled for surgery will certainly be helpful (in spite of the risk of false negatives) and all major hospital groups are requiring this as a routine. It is clear that this increased risk will continue beyond 2020. Patients need to be carefully informed of the risks and both surgeons and patients must balance this risk against the risk of denying surgical treatment. This they must do together and should reflect the decision in a specific Covid-19 consent form.

Window of opportunity

Measures to “flatten the curve” have almost certainly created a window of opportunity to provide necessary surgical treatment. As the anticipated surge arrives it is likely that for a period, hospitals will only be able to provide resources for surgery that is immediately necessary to save life or limb, but this is simply not the case at present and accumulating large backlogs will not help anyone. This situation is quite unlike that experienced in the USA or Europe and therefore a requirement that there be a sustained fall in new Covid-19 cases before continuing with necessary surgery cannot be supported.

The ability of a hospital to provide such necessary surgical services will, in the context of the current pandemic, vary from location to location depending on Covid-19 case load, available resources, and the possibility of sub-dividing the hospital into Covid-19 and non-Covid-19 areas. Private hospitals may be in a better position to achieve this than state institutions and therefore the services offered by the two should not be compared. As the anticipated surge arrives it is likely that for a period, hospitals will only be able to provide resources for surgery that is immediately necessary to save life or limb, but this is simply not the case at present.

Priority at this time should be given to day-case procedures, particularly those that do not require general anaesthesia or intensive care and patients who because of low age and lack of co-morbidities are relatively low risk for serious Covid-19 infections. Several scoring systems have been proposed to aid decision making. Day clinics in particular do not have overnight facilities and therefore will not be treating or admitting Covid-19 patients, enabling procedures to go ahead there according to the relevant specialist group guidelines.

Prioritisng patients

Many interventions can and will be postponed beyond 2020 but those that cannot, should not. Lists of procedures are completely unhelpful as it is not the procedure code that is key but the clinical indication for doing the procedure. It is the surgeon and the patient who should be making this call as long as practice conforms to available specialty-specific guidelines. South African surgeons should be working, prioritising patients appropriately, and consulting closely with local hospital management, anaesthesiologists and nurses to ensure that local resources are adequate and properly managed, and that all safety guidelines are rigidly adhered to. This approach has been endorsed by the Federation of South African Surgical Societies (FOSAS) representing 19 surgical societies and associations in this country.

Funders at this time should be assisting surgeons wherever possible given the unique difficulties that the pandemic presents. Many surgeons continue to operate with their support staff working from home. Laborious pre-authorisation and requests for letters of motivation should be suspended during the crisis. In the majority of instances, the need for the procedure should be evident simply by noting the ICD10 code, most of which will reflect a PMB condition. Surgeons are simply not going to be performing unnecessary procedures whilst exposing both their patients and themselves to risk and to suggest that such practices are widespread at this time is to fundamentally misunderstand the nature of the doctor-patient relationship and the commitment of surgeons to firstly, do no harm.

The medical scheme payment holiday issue and Covid-19 costs

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Medical aid schemes have not been spared the impact of Covid-19. Several solutions are being put forward to support members in shouldering both the financial and the clinical burden of the virus, while ensuring that schemes will be able to manage the expected number of increased admissions.

The economic impact of Covid-19 has resulted in most medical schemes not realising the gains on the investment of their reserves: some have experienced a decline of up to 14%. This, in turn, has had an impact of up to 10% reduction in these reserves, according to Medscheme, which has more than 3.8-million members.

So far Medscheme has processed and paid claims amounting to R14.5m on 97 admissions related to Covid-19. According to Dr Lungi Nyathi, executive director at Medscheme, the average cost per admission for Covid-19 is R150,000 – this includes ICU or general ward care and related medication as well as professional fees.

In the same vein, the Government Employees Medical Scheme (Gems) which covers 1.8-million lives, making it the largest closed scheme in the country notes that just under a 100 of its members have already been admitted with a diagnosis of Covid-19. Gems actuaries have estimated that the scheme might spend up to around R900m on Covid-19 treatments during this financial year.

The scheme has also observed a general decline in other hospital claims, mainly due to decreased utilisation of health services as a result of the lockdown.

Decline in hospital admissions

Dr Katlego Mothudi, managing director of the Board of Healthcare Funders (BHF) says the decrease in hospital admissions, is a clear indication that people are avoiding going to clinics and hospitals because of fear of the viral infection.

“Our biggest concern is that in instances where people are sick and do not go to hospital on time due to fear of Covid-19 infection, may lead to complications and fatalities unrelated to Covid-19 due to delayed treatment or hospitalisation. This means more people will require hospitalisation as a rebound phenomenon when the pandemic abates – and we already know that some patients on chronic medication are not adhering to treatment for fear of infection. We will soon begin to see the effects of this unfolding.”

Hospital admissions have already declined by over 50% since the lockdown was announced. “While we understand that there has been a hold on elective surgery, with the admissions rate for surgical cases having declined by 60%; our concern is that the remainder of cases are people who are ill and may actually need hospitalisation but opt not to go to hospital for fear of Covid-19 infection; and essential medical needs will become even more urgent and critical for those people,” says Mothudi.

Regarding one of the proposed relief mechanisms for those beneficiaries in financial distress, Nyathi says, “While we understand the need for a Covid-19 payment holiday, there are a number of risks from which medical schemes must still shield members. In addition to Covid-19 treatment, medical schemes need to make sure that there are sufficient funds for all other disease treatments, accidents or injuries that may occur”.

“To support members facing financial challenges, some schemes have considered allowing their members to downgrade their medical aid cover midyear. This will ensure that members retain healthcare access and do not have to cancel due to affordability issues.”

Mothudi explains that normally, members can only change their medical aid options once a year at the end or beginning of the financial year. Given the unusual circumstances in which we find ourselves, however, some medical schemes are allowing members to downgrade their cover during this period if they are experiencing financial difficulties.

He notes that this option will ensure that members remain covered and in turn protect members from exposure to the waiting periods usually imposed when resuming cancelled cover.

Survival mode

While South Africans are in survival mode, he emphasises that it is critical for high-risk patients and those on chronic medications to continue taking their medicines and look at various ways in which to access them. They can request scripts from their doctors remotely through virtual consultations and receive these electronically via email or WhatsApp. They can arrange for collection of medicines via different channels such as DSV, which is available at several Engen filling stations. Government has also set up ATM pharmacy dispensing units in some areas across the country, and people are encouraged to utilise these facilities.

“It’s unfortunate that South Africa still has limited facilities to ensure access to medicines, but it’s not too late to learn,” Mothudi says. “This is an opportunity to begin to explore how we can deliver medicines using drones as seen in Rwanda, parts of Nigeria and Ghana.

“We can also look at scaling up some of our low-tech solutions such as bicycle deliveries of medicines – a service that was proven to be successful in townships in the Western Cape – to ensure that everyone has access to medicines even in the most remote areas, in order to avoid the ripple effects of Covid-19 on patients who are on chronic medication,” he says.

BREAKING: CMS chair dies of Covid-19

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The Council for Medical Schemes (CMS) has confirmed that its chair, Clarence Mini, has died from Covid-19 complications.

Mini, who was asthmatic, had been in hospital for the past six weeks. He was appointed by the then minister of health, Aaron Motsoaledi, to chair the council, and his term was due to end in September.

“This wonderful, compassionate and likeable individual leaves a legacy of having served this country and industry in many capacities with great distinction. Dr Mini leaves behind his beloved children Yandi and Nomhle, but above all his soul mate and best friend Mrs Nancy Mini. He shall be sorely missed by his family, colleagues and all industry stakeholders.”,” said Grace Khoza, general manager for stakeholder relations at the CMS, in a statement.