Discovery launches health vouchers
Medical scheme administrator Discovery Health has launched a prepaid voucher system for private sector general practitioner consultations, targeting the millions of South Africans in formal employment who cannot afford traditional medical scheme cover. A similar venture was launched earlier this year by private hospital group Netcare.
Medical scheme administrator Discovery Health has launched a prepaid voucher system for private sector consultations with general practitioners (GPs), targeting the millions of South Africans in formal employment who cannot afford traditional medical scheme cover.
A similar venture was launched earlier this year by private hospital group Netcare.
Both companies are aiming for a market segment that until now has been able to access primary health-care services in the private sector only via a limited range of health insurance products that require a monthly subscription or by paying out of pocket.
While primary health insurance is cheaper than medical scheme cover, it nevertheless requires a sustained financial commitment that is out of reach for many workers and employers. Competition in this market is limited because no new entrants have been permitted since the Treasury ’ s demarcation regulations came into effect in 2017.
Discovery Health is a subsidiary of JSE-listed health and life insurer Discovery and administers 18 medical schemes, including SA’s biggest open scheme, Discovery Health Medical Scheme. Its new product, Discovery Prepaid Health, will enable a consumer to buy a R300 voucher that covers a consultation with a networked GP, either for themselves or someone else.
Discovery ’ s recent attempts to expand in primary health care were dealt a blow when the Council for Medical Schemes appeal board revoked permission to sell these products in October.
Discovery Health’s research indicated that while only 16% of the population belonged to a medical scheme, 50% of the population paid out of pocket to consult private sector primary health-care providers such as GPs, said CEO Ryan Noach.
Often these consultations were covered by a relative or employer.
The private health-care rates charged to patients paying out of pocket were variable and could be as much as 80% higher than medical scheme tariffs, he said, estimating that 8-million people in the formal economy could not afford medical scheme cover.
“We need disruption and structural change in our healthcare system. This is a response to the fact that the regulatory environment has not come up with a solution for formally employed people to reliably access primary health care.
“Originally cellphones were only available to people who could sign a contract, and then prepaid revolutionised [the market]. This is exactly the same. Private health care has really only been available to people who could get credit and pay an annuity,” said Noach.
The demarcation regulations were intended to safeguard consumers by drawing a clear distinction between medical schemes and health insurance products. When the rules came into effect, a two-year exemption to the Medical Schemes Act was granted to health insurance products deemed to be doing the business of a medical scheme, including those offering primary health cover.
The expectation was that their members would ultimately migrate to low-cost benefit option medical scheme products, which would offer a cheaper, pared-down version of traditional medical scheme options. However, this process has stalled because the Council for Medical Schemes has yet to finalise a low-cost benefit option regulatory framework. The exemption period has been repeatedly extended, but no new entrants have been permitted into this market.
Noach declined to specify how many GPs had joined Discovery ’ s prepaid voucher network, saying only it had sufficient numbers to cover metropolitan areas in eight provinces. Discovery will sell the vouchers online and in 350,000 retail outlets.
In August, Netcare launched NetcarePlus GP vouchers, which range from R290 for a virtual consultation to R430 for a face-to-face consultation and acute medication.
THE PRIVATE HEALTH-CARE RATES CHARGED TO PATIENTS PAYING OUT OF POCKET COULD BE AS MUCH AS 80% HIGHER