Medical aid costs shrink but Covid-19 costs are still unknown

Fewer elective surgeries and doctors’ visits save millions, but hospitalisation of Covid patients will negate these savings.

2020-05-25 11:00:00 AM

Medical aids are saving a lot of money because elective surgeries and visits to doctors and specialists have dramatically declined as a result of the Covid-19 pandemic.

Fewer elective surgeries and doctors’ visits save millions, but hospitalisation of Covid patients will negate these savings.

Medical aids are saving a lot of money because elective surgeries and visits to doctors and specialists have dramatically declined as a result of the Covid-19 coronavirus pandemic.On the other hand, the hospitalisation of one Covid-19 patient costs R85 000 (excluding hospital costs). This is about three times the cost of typical hospital admissions.

Gwede Mantashe, wife Nolwandle test positive for Covid-19 | News24 Doctors in France have found the world's first recorded case of an unborn child contracting Covid-19 Sadtu wants schools closed immediately

Ryan Noach, the CEO of Discovery Health, said that the virus would be with us for some time, so its impact on medical aids this year and next year should be taken into account.Depending on the extent of the pandemic, Covid-19 screening, testing and hospital treatment during this time could lead to an additional cost of between R816 and R3 561 per beneficiary across all medical aids.

That could cost the country’s medical aids between R7.3 billion and R31.8 billion, Noach said on Wednesday.It is, therefore, too soon to say whether the decline in medical aid claims during the national lockdown will lead to a saving for the funds this year, and to lower increases in member contributions for next year.

Discovery Health administers 19 medical aids covering about 3.5 million beneficiaries. The biggest fund under its administration is Discovery Health Medical Scheme.The cost associated with putting someone on a ventilator is R169 525 for a Covid-19 patient in ICU, and about R92 000 in a high-care unit

Noach statisticsAccording to Noach, their statistics show that 23% of confirmed Covid-19 cases are admitted to hospital and 4.5% to ICU.The cost associated with putting someone on a ventilator is R169 525 for a Covid-19 patient in ICU, and about R92 000 in a high-care unit.

Noach said they have had one case where the hospitalisation of a patient who required a ventilator cost more than R800 000.By Wednesday, Discovery Health had 529 cases of Covid-19-related hospital admissions. At R85 000 per case, that amounts to just less than R45 million in payouts.

Other major medical aids told City Press’ sister publication, Rapport, that far fewer claims had been paid out during the lockdown, because only emergency or urgent operations were carried out under level 5 of the lockdown. Hospitals were also emptier.

'Iron woman', 80, survives being kidnapped, dropped off barefoot in -5°C Lesotho weather | News24 Your weather update: Frost, cold weather to persist on Wednesday across the country | News24 Mantashe, wife test positive for COVID-19

However, the medical costs associated with Covid-19 are still unknown.Damian McHugh, the CEO of Momentum Health Solutions, said that Covid-19-related hospital admissions were expected to rise as the lockdown was relaxed.The peak of the virus is expected in South Africa in August or September.

Emile Stipp, head actuary of Discovery Health, said it had sufficient reserves to cover worst-case scenarios. Medical aids are required by law to keep 25% of their contributions in reserve for eventualities like Covid-19.Read: Covid-19 will be covered by all medical aid plans

Discovery has about R20 billion in reserve.According to Craig Comrie, the CEO of Profmed, savings by medical aids so far this year must be seen in light of the expected rise in the cost of personal protective equipment being used by hospitals, doctors and dentists.

This will have an impact on the costing models and projection models for the next couple of years. Funds will battle to limit costs and keep premiums affordable as a result of all the long-term uncertainty around the virus, which is why everyone is still hoping for a vaccine, he said.

Comrie added that annual increases in medical aid contributions were also supplemented by the returns funds make on their investments, which have been adversely affected by the poor performance of the markets and by declining interest rates.Profmed, for example, lost more than R100 million for the year to April.

“We expect that any decrease in claims for elective operations will not nearly make up for this loss, unless the markets recover very quickly.”But if medical aids are paying out fewer claims, it means that hospitals and specialists will also feel the effect of Covid-19.

SAA business rescue plan approved Cops hunt for suspects behind cash-in-transit heist between Bela Bela and Marble Hall | News24 COVID-19 pandemic could delay 2021 municipal polls

Johann Serfontein of the consultancy Healthman, which advises the SA Private Practitioners’ Forum, said that medical claims data for about 80% of the 3 500 specialists it advises show that ophthalmologists, in particular, had been affected by the lockdown.

Claims by ophthalmologists were 80% lower last month than in March – from R153 million in March to R30 million last month.He said there was evidence that claims by certain specialist groups last month were as little as 4% of what was claimed in February and March. Some surgical specialist groups’ claims were about 27% of the normal level.

Serfontein said surgical disciplines such as orthopaedic and general surgery, those that do facial procedures, as well as ear, nose and throat specialists, have been hit hard by the ban on elective surgery.The Council for Medical Schemes does not release payment numbers for elective and emergency procedures, but it does for hospital costs. According to the 2018/19 annual report, expenditure on hospital services made up 37.1% (R64.3 billion) of the total benefits of R173.3 billion paid out by medical aids in 2018.

But if medical aids are paying out fewer claims, it means that hospitals and specialists will also feel the effect of Covid-19Riana De LangeAdam Pyle, CEO of Life Healthcare in South Africa, said nationwide occupancy in its hospitals during March and last month was at 69% and 40%, respectively, compared with 72% and 70% in March and April last year.

About 50% of cases in Life Healthcare hospitals may be regarded as elective.McHugh said elective procedures that had been postponed could increase rapidly over the next few months, so eventual costs could be similar to last year.But Serfontein said that it was unlikely that operation volumes for the remainder of the year would return to normal, because measures intended to prevent Covid-19 require theatres to be disinfected between operations and ventilated for between 20 and 30 minutes. It will, therefore, be impossible to use these theatres at full capacity.

Read more: City Press »

Like all the other major suppliers, vehicle finance, insurance etc.. medical aids should be offering an alleviation during the lockdown

COVID-19 LIVE UPDATES | Eastern Cape battles bed shortage as Covid-19 infections surgeInadequate rural testing and a total disregard for Covid-19 regulations by communities have created a perfect storm for the surge in infections in the Eastern Cape, experts say. Sad reality.

19 more Covid-19 deaths in the Western CapeThe Western Cape has recorded 19 more Covid-19 deaths, bringing the total number of deaths from the virus in the province to 267. Kubi kubi 😥😥😥😥😥

Gauteng health MEC welcomes Cuban medical experts to fight Covid-19More than 200 arrived in South Africa. How, with what ? Government spending money on these doctor's and yet no compensation to the essential workers who've been out there since day one of the outbreak.

Gauteng health MEC welcomes Cuban medical experts to fight Covid-19azarrahk Do You Need A Professional Business Logo Shlabane Graphics is here for you!!! ⚠️❗SPECIAL❗⚠️ •Business Logo: R300 •Song Art Cover: R70 •Album Artcover: R200 •Business Card: R130 WhatsApp: 0728330098 Call: 067 055 1759 Email: toptalent951gmail.com azarrahk Pity the ANC plays political favours with a communist government at the expense of their own unemployed citizens - especially during a time of crisis azarrahk Shouldn't they be in Western Cape 🤷🏾‍♀️

Bournemouth player tests positive for Covid-19A Bournemouth player was one of two people working for Premier League clubs who tested positive for Covid-19 following a second batch of testing, the club said on Sunday.

Bidvest and government slammed over Covid-19 donationSMMEs have slammed Bidvest for its Covid-19 protective gear donation to the Gauteng government, saying it denied them the opportunity to grow their businesses. SMME's are being oppressed by big businesses. What do they want in return Let them donate like Bidvest