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Mediclinic News : Medical inflation at lowest rate in six years


Medical inflation at lowest rate in six years




News Description

NEW AGE Medical inflation is at its lowest rate I in six years, says a new report. However, the figure is still relatively high at 10.5% as overall inflation measured by the Consumer Price Index in January is presently 4.4%. The Discovery Health Medical Inflation Index defines "medical inflation" as the annual increase in claims received by medical schemes. "It is a function of both changes in the price of healthcare services and frequency. For example, the fee charged by a GP or specialist for a consultation, or the tariff charged by a hospital for a one night admission, combined with changes in the volume of healthcare services used by members of medical schemes the increase in the number of GP consultations, or the number of hospital admissions. The medical inflation tracker is based on data from the Discovery Health Medical Scheme DHMS, which includes the claims of about 27 million lives, representing 31% of the total medical scheme population for the period under review. According to Independent Medical Aid Specialists, the inflation in medical aid premiums of medical schemes, both open for the public in general and closed schemes private schemes allowing membership only to people employed by certain corporations served by the scheme, has exceeded both the average household inflation in South Africa, as well as the increase in earning power of the household itself. "The logical outcome will be that the affordability of medical aid premiums and therefore the ability of the average household to maintain membership of a scheme will gradually decline, with a disastrous effect on the national economy as well as an increasing drain on the public healthcare system, due to more people not being covered by medical aid schemes." DHMS data indicate that between 2008 and 2017, medical inflation increased by an average of 11.3% a year about 5% above the Consumer Price Index, which averaged 6.1% a year over this period. The group acknowledges that access to quality healthcare at an affordable price is a "critical" priority. Medical schemes are defined by legislation as not for profit entities that charge monthly contributions in order to pay medical claims on behalf of their members. Discovery says that almost 90% of the contributions paid by members are used to cover healthcare claims. However as healthcare costs increase over time, so do the claims paid by the medical scheme. This requires the medical scheme to increase the contributions paid by members to ensure that the scheme can continue to pay claims, as well as to maintain solvency reserves equivalent to 25% of total annual contributions. The Independent Medical Aid specialists suggest that an increasing drain on the public healthcare system, due to more people not being covered by medical aid schemes will not only drain the economy but the government will need to take its share of responsibility for this overutilisation. "The government has repeatedly stated its commitment to a National Health Insurance."
Created at 2018/03/14 08:37 AM by Mediclinic
Last modified at 2018/03/14 08:37 AM by Mediclinic