FOR OUR MEMBERS Welcome to the Discovery Health Medical Scheme Annual General Meeting 21 June 2018
Agenda 1. Welcome and quorum 2. Minutes of the 2017 Annual General Meeting - for approval 3. Tabling of the 2017 Integrated Report 3.1 Presentation by the Principal Officer of Discovery Health Medical Scheme 3.2 Presentation by the CEO of Discovery Health 4. Governance 4.1 Discovery Health Medical Scheme Trustee Remuneration Policy and approval of the 2018 Trustee Remuneration 4.2 Appointment of Auditors 5. Motions 6. General 7. Voting and closure of the AGM 7.1 2018 Trustee Remuneration 7.2 Non-binding Advisory vote on the Trustee Remuneration Policy 7.3 Motions 8. Member Engagement The Board of Trustees invites members to engage with the Principal Officer and the Board of Trustees on specific Scheme matters of their choice immediately after the closure of the AGM. 2
FOR OUR MEMBERS Discovery Health Medical Scheme | Annual General Meeting Dr Nozipho Sangweni, Principal Officer 21 June 2018
Our purpose is to care for our members’ health and wellness by engaging the brightest minds and innovative solutions to provide access to affordable, equitable and quality, value-based healthcare that meets their needs now and sustainably into the future Our vision is to be the best medical scheme in the country 4
How do we deliver on our purpose and vision? Superior Stakeholder relations quality of care Lowest healthcare and excellent for members costs governance Focussing on Member-centric Sustainability prevention servicing and financial performance 5
How do we deliver on our purpose and vision? Superior Stakeholder relations quality of care Lowest healthcare and excellent for members costs governance Focussing on Member-centric Sustainability prevention servicing and financial performance 6
Safely guiding our members through their healthcare journey Member campaigns Disease Management Programmes Value Based Contracts DiabetesCare CadCare KidneyCare Surgicom 7
Caring for members with complex and emergency healthcare needs 10 highest individual member claims paid in 2017 = R 48 million R 6.8m Age 58 , Long term use of a ventilator (cardiovascular related) 205 years R 6.0m Age 46, Long term use of a ventilator (gastrointestinal related) worth of contributions to fund the claim R 5.2m Age 26, Long term use of a ventilator (liver related) R 4.7m Age 53, Trauma 7 489 R 4.4m Age 59, Trauma individuals claimed over R500 000 R 4.2m Age 62, Long term use of a ventilator (infections related) 1 681 R 4.1m Age 31, Respiratory R 4.1m Age 82, Infections individuals claimed over R1 million R 4.0m Age 58, Complications following admission for toxicity R 4.0m Age 38, Long term use of a ventilator (respiratory related) Notes: Assumes a total contribution of R2,773 per average member per month 8 Does not include any maternity claims Source: DHMS data
Ensuring our members have comprehensive levels of cover 97% overall In-hospital claims pay-out ratio (including medical specialists) - 2017 Executive Classic Smart KeyCare Essential Coastal 1% 2% 6% 7% 4% 4% 99% 98% 94% 93% 96% 96% Claims payout ratio Uncovered claims 9 Notes: High in-hospital claims pay-out ratios reflect extensive use of provider networks by members Source: DHMS data
How do we deliver on our purpose and vision? Superior Stakeholder relations quality of care Lowest healthcare and excellent for members costs governance Focussing on Member-centric Sustainability prevention servicing and financial performance 10
Proactively caring for our members by encouraging and paying for screening and prevention Number of members performing screening tests Health check results (2017) (2017) 349,942 Blood Blood pressure glucose ………………... ………………... 97.3% 88.8% in-range in-range 188,704 123,424 Cholesterol BMI 93,790 ………………... ………………... 79,594 67.0% 41.7% in-range in-range Health check Pap smear HIV Mammogram Glaucoma 11
How do we deliver on our purpose and vision? Superior Stakeholder relations quality of care Lowest and excellent for members healthcare costs governance Focussing on Member-centric Sustainability prevention servicing and financial performance 12
Keeping healthcare affordable for our members through lowest possible contribution increases DHMS headline contribution increase vs competitors (2018) 10.9% 10.1% 9.5% Top 8 scheme average: 8.8% 8.7% 8.6% 8.4% 8.3% 7.9% 7.6% Scheme A DHMS Scheme B Scheme C Scheme D Scheme E Scheme F Scheme G Scheme H Lowest 7.3% 7.4% 7.9% 8.4% 7.0% 7.9% 7.9% 7.5% 9.8% increase Highest 8.3% 8.2% 11.3% 8.4% 9.0% 9.9% 11.9% 11.2% 12.7% increase 13
14 Contributions are competitively priced across all segments, usually with superior benefits Continuous improvement in contribution differential Average contribution differential P+A+C in 2018 20.9% 16.4% 15.1% 14.6% 13.1% 16.4% 17.1% 2.9% 12.0% DHMS next 8 DHMS next 8 DHMS next 8 DHMS next 8 DHMS next 8 2015 2016 2017 2018 largest largest largest largest largest open open open open open schemes schemes schemes schemes schemes Low income Hospital Limited day-to-day Extensive day-to-day Overall Weighted Sources: Published contributions for 2018 14 P + A + C = Principal member + Adult dependant + Child dependant Sizwe Medical Scheme excluded from analysis
86.0% of contributions are used to fund members’ healthcare claims DHMS expense breakdown (2017) DHMS claims expenditure 86.0% 100.0% 7.6% 2.6% 2.5% 1.4% Gross Contributions Claims Administration fees Managed care fees Financial adviser and Surplus to member Scheme expenses reserves 15 Source: DHMS Integrated Report
Contributions are used to fund R51 billion of healthcare claims Other – R1.2 bn 2.3% Medicine – R8.3 bn 16.3% 659,163 beneficiaries registered for chronic 37.2% R51 bn medication Hospitals – R18.9 bn 2017 718,755 hospital admissions DHMS claims expenditure Professionals – R22.4 bn 44.1% 6.7 million GP visits 4.6 million specialist visits DHMS claims breakdown (Risk + MSA) Notes: Total claims include risk and MSA claims 16 Categories add up to R50.8 billion due to rounding Source: DHMS data
We protect our members’ funds from inappropriate use Significant fraud savings Halo effect of R3.7 billion saving 1 Fraud savings and recoveries in 2017 (Rm) 472 0.95 333 323 0.9 0.85 195 0.8 0.75 Dec-15 Dec-16 Dec-17 May-18 YTD T0 T1 T2 T3 T4 T5 T6 T7 T8 T9 T10 Members benefit through a 0.75% lower contribution increase every year 17
Members benefit through continuously reducing administration expenditure that is among the lowest in the industry Administration expenditure as % of gross Administration expenditure as % of gross contribution income (2011 – 2017) contribution income (2016) DHMS All other open schemes 9.4% Ranked 5 th lowest of 21 open schemes 8.5% 8.7% 8.3% 8.0% 7.8% 8.0% 2011 2012 2013 2014 2015 2016 2017 Lowest Quartile Notes: The latest CMS report is for 2016 The admin expenditure as % of GCI figure is a weighted average for all other open schemes 19 The figure of 7.8% differs from the previous figure of 7.6% because it includes other operating expenses and net impairment losses Source: CMS Annual Report 2016-17
How do we deliver on our purpose and vision? Superior Stakeholder relations quality of care Lowest healthcare and excellent for members costs governance Focussing on Member-centric Sustainability prevention servicing and financial performance 20
Our efforts are realised through lower levels of complaints improving member satisfaction Lower levels of CMS complaints Consistently high member satisfaction CMS complaints per 1,000 beneficiaries 0.6 Member 9.14 0.55 Perception out of 0.5 Less than 800 Score 10 complaints out of 53.6 million 0.4 claims 0.38 0.3 0.26 0.25 0.23 0.21 8.85 Overall Perception 0.2 out of Score 10 0.1 0 2012 2013 2014 2015 2016 2017 Notes: 763 CMS complaints were recorded in 2017 21 Overall Perception Score considers members, brokers and providers Source: DHMS Integrated Report
How do we deliver on our purpose and vision? Stakeholder Superior relations and quality of care Lowest healthcare excellent for members costs governance Focussing on Member-centric Sustainability prevention servicing and financial performance 22
We protect our members’ funds through strong, independent governance structures accountable to Board Committees DHMS members Audit services belong to elects elects Clinical Governance Disputes BOARD OF TRUSTEES Investment governs Nomination BOARD COMMITTEES Non-healthcare Expenses mandates Product reports to Appoints/ Remuneration outsources Risk PRINCIPAL OFFICER Stakeholder Relations and Ethics oversees Administrator and Scheme Office Managed Care Provider 23
Our role in ensuring members receive a seamless experience Members Providers Pharmacy Radiology Pathology Facilities Financial Advisers 24
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