FINWEEK HEARS a number of complaints about Discovery Health Medical Scheme. They relate mainly to the savings account, which for many members seems to run out very quickly. We suspect Discovery is probably a very good scheme with the right members, which seem to be younger people rapidly climbing the economic ladder.
It doesn’t seem to work well for older members, some of whom tell us they aren’t on the medical scheme through personal choice but because a much younger MD of a small company decided to sign the firm up with Discovery Health. At this stage we’re just hearing reports but will investigate further.
However, going through Discovery’s interim financial results released last Thursday, it was good to note the scheme is in a sound financial position and making good profits. That stands out in an industry where many schemes are seriously underfunded and losing both money and members.
Discovery Health CEO Adrian Gore says of Discovery Health: “Performance over the period exceeded expectations.” He adds that through its network with healthcare professionals and private hospitals healthcare costs were kept under control and benefit choices to members increased further.
Most important from an overall industry perspective was that Discovery crossed the 25% statutory reserve level with more than R5,2bn in reserves.
We were critical of the increase in member contributions when they were announced last year. Discovery Health did say at the time benefits had been added to the package and it now reports that less than 3% of members reduced benefit choices while 97% opted to stay at or enhance their current benefit choice.
Members grew by 4% to cover 2,1m lives, while the lapse rate remained at less than 4%. The financial effect was a 22% increase in operating profit to R475m.
Good money in medical schemes.