FI­NAN­CIALLY STRONG

Finweek English Edition - - Creating Wealth - Adrian Gore

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.

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