OUT-OF-POCKET EXPENDITURE by beneficiaries of medical schemes: 2013-2019 AUTHORS Carrie-Anne Cairncross Martin Moabelo Michael Willie Sipho Kabane
PEER REVIEWER: Anja Smith
EXECUTIVE SUMMARY The cost of healthcare is constantly increasing. This is a consequence of an ageing population, an increase in the burden of disease, increasing utilisation of health services, including provider-driven healthcare services, and the increase in cost of health services. There is also an increasing trend with regard to direct expenditure of members of medical schemes, which adds a financial burden to them. Phenomena such as voluntary use of non-designated service providers (DSPs), benefit design and lack of product knowledge are some of the underlying reasons for an out-of-pocket (OOP) payment. This study evaluates the increasing trend in OOPs incurred with regard to various disciplines in the context of medical schemes’ benefit design. Longitudinal descriptive analysis was used to draw meaningful insights into and identify features of the OOPs incurred by scheme members. The annual statutory return data of the Council for Medical Schemes (CMS), collected for the period 2013-2019, were used to examine trends in OOPs in the medical schemes industry. OOPs are calculated as the difference between the claimed amount and the amount paid from the medical scheme’s risk benefit. The results show that OOPs incurred by members have increased at an annual rate of 7.9%, from an estimated R22.3 billion in 2013 (R2 562.83 per beneficiary per annum (pbpa)) to over R35.2 billion in 2019 (R3 913.94 pbpa), in real terms. OOPs made up just over 18% of the total amount claimed from medical schemes in 2019; this increased from 15.5% in 2013. OOPs incurred for medicines dispensed increased annually by 7.8% between 2013 and 2019, from R7.4 billion to R11.6 billion, respectively. Claims billed for medicines dispensed constituted 40.6% of total out-of-hospital claims and only 17.1% of the total amount claimed in 2019.
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