A total of 3.8% of people on the scheme between the ages of 31 and 40 have developed high blood pressure. It costs the scheme an average of R179 per claimant every month to fund the treatment of the disease. Because some members don’t comply with treatment or scheme rules (for example, not using prescribed medicine lists) it costs these members about R41 per month in out-of-pocket expenses (which is roughly 16% of the cost).
By the age of 70, we see that the percentage of members in the age category has increased to 58%, it’s costing the scheme an average of R217 per claimant every month, and members are funding an average of R59 per month in out-of-pocket expenses (21% of the cost).
Employers
The Council for Medical Schemes report for 2014–2015 indicates that contribution increases between 2001 and 2014 were in the region of 3–4% above CPI inflation. Salary increases and company subsidies, where applicable, are generally linked to inflation. This places a higher cost burden on the employee as medical scheme contributions account for a great percentage of their salaries, which may result in disgruntled employees.
As a result of escalating contributions, medical scheme members are buying more cost-effective and less benefit-rich options, often exposing themselves to higher out-of-pocket expenses.
Changes in out-of-pocket expenditure are fairly volatile over an individual’s life and depend on various factors:
- How closely their level of healthcare cover matches their healthcare needs, for example if they are on a lower benefit option than they currently require, then they will experience shortfalls and have higher copayments
- How willing they are to adhere to the rules governing their chosen benefit option, for example by using network doctors and hospitals, and medicines that appear on the prescribed medicine list
- What their chosen healthcare services providers charge
Depending on each of these factors and how they interact, out-of-pocket expenditure can increase at a rate far beyond medical scheme contribution inflation, or can be closely controlled and not feature heavily in their budgeting.
According to the latest PwC4 report on medical cost trends, where members don’t have adequate cover, they tend to sacrifice valuable medical attention, including early diagnoses and management of chronic conditions. Worsening health conditions can affect employers in the form of higher absenteeism or presenteeism, where employees are physically present but not productive.
The South African Medical Journal5 notes that because NCDs are a leading cause of death in our working-age population, employers can face additional costs in the form of high staff turnover. They also note that obese workers cost their employers 49% more in paid time off than their non-obese colleagues.
Employees
Employees are experiencing an ever-increasing cost in their healthcare expenditure. This includes higher medical scheme costs and greater levels of out-of-pocket expenditure. As a result, many employees buy less benefit-rich options and often don’t include all their dependants on their medical scheme plan in an effort to reduce costs. This can result in health complications, greater stress levels and a worsening of their physical and mental well-being.
WHAT ARE THE MAIN CAUSES OF NCDS?
The WHO reports that the following lifestyle risk factors can lead to NCDs:
Physical inactivity
- Approximately 3.2 million people die each year from physical inactivity.
- People who are insufficiently active have a 20% to 30% increased risk of all-cause mortality.
- Regular physical activity reduces risk of cardiovascular disease, including high blood pressure, diabetes, breast and colon cancer, and depression.
Unhealthy diet
- Inadequate consumption of fruit and vegetables increases risk of cardiovascular disease and cancer.
- Most populations consume higher levels of salt than recommended – salt being an important determinant of high blood pressure and cardiovascular disease.
- High consumption of saturated fats and trans-fatty acids is linked to heart disease.
Smoking
- Almost 6 million people die from tobacco use each year.
- By 2020, this number will increase to 7.5 million, accounting for 10% of all deaths.
- It’s estimated to cause 71% of lung cancer, 42% of chronic respiratory disease and nearly 10% of cardiovascular disease.
Excessive alcohol intake
- Approximately 2.3 million people die each year from excessive use of alcohol, accounting for approximately 3.8% of deaths in the world.
- More than half of these deaths occur from NCDs, including cancers, cardiovascular disease and liver cirrhosis.
The good news is that many NCDs can be prevented or managed through behavioural change.
Government regulation
The South African National Department of Health has promulgated mandatory salt regulations, beginning in 2016, to reduce the intake of salt. The World Health Organization recommends a daily intake of salt of not more than 5g (about a teaspoon), but studies show that some South Africans are taking as much as 40 g of salt a day, increasing the risk of hypertension. This new legislation is expected to save a total of 6 400 lives from stroke, and 4 300 from non-fatal stroke, and cut hospitalisation costs by R300 million every year.
Similarly, the newly announced tax on sugary drinks is expected to cut the number of obese people by 220 000 in three years. The Priceless Unit at the Wits Centre of Public Health concludes that ‘liquid sugar’ carries the biggest risk for diabetes. Drinking a sugary soft drink is equivalent to having at least eight teaspoons of sugar. They note that a can a day increases the risk of diabetes by 26% and being overweight by 27%. Children who drink a can a day have a 55% higher chance of being overweight.
Medical schemes typically encourage members to undergo screening tests to detect diseases early, resulting in better health outcomes and lowering the cost of treatment.
Many medical schemes in South Africa have aligned themselves with wellness and loyalty partners. They provide members with financial assistance to access providers who can help them lead healthier lifestyles, by offering discounted gym memberships as well as smoking cessation and weight-loss programmes. Members are rewarded for their commitment to healthy lifestyles.
Healthier members simply claim less than unhealthy members. Discovery Health Medical Scheme (DHMS) statistics reveal that members who engage with their wellness programmes save the scheme approximately R1 billion a year. Schemes also focus on disease management through targeted disease management programmes to assist members and providers to manage the treatment and associated risks of specific conditions.