/ 12 October 2010

Medical affordability will be about curtailing choice

Momentum Health recently released its contribution increases for 2011 and matched Discovery Health’s 7,9% increase.

Although the increase is double the rate of inflation, it is a sharp decline from last year’s 14,3% increase, and currently medical inflation is running at around 5% to 7,5%.

How many GPs and specialists do you know who increased their consultation fees by only 4%? And new breakthrough drugs don’t come cheap.

The reality is that every year medical costs will increase faster than our salaries. This is one of the drivers behind the government’s strategy to create a national health insurance (NHI).

By becoming a central buyer, the government hopes it can apply downward pressure on medical costs. Its success remains to be seen, but what will be a reality, either through NHI or private healthcare, is that freedom of choice will become more expensive.

As a result we are seeing a trend with medical schemes offering members discounts if they opt for networks of vetted services providers.

Momentum Health has based its offering on this philosophy and its members can drop their premiums by as much as a third — if they are prepared to give up freedom of choice. Discovery Health followed Momentum’s lead with the introduction of both a GP network and a hospital network.

Members of Momentum Health’s three middle-range options (Custom, Incentive and Extender, which cater to 75% of its members), can select to join the hospital network, which includes Life Healthcare and the majority of MediClinics, and receive a discount on monthly premiums. In addition, members can further lower costs by choosing to manage their chronic conditions through associated doctors and pharmacies. For maximum discounts on monthly premiums members can opt to receive their chronic medication through state hospitals. For example, a member on the Custom option can reduce their monthly contribution by 32% if they opt for the network and medication supplied through state pharmacies.

Healthcare will continue to become more expensive and we need to start managing our use of healthcare services, and that includes making sure we are on the right medical option. In November, Smart Money will review the five largest medical schemes: Discovery Health, Bonitas, Fedhealth, Liberty Health and Momentum and look at ways to keep your healthcare costs to a minimum.

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