Medical inflation is between 10.5 and 12.5 percent, and yet the average increase in contributions from the “big three” medical schemes, Discovery, Momentum and Bonitas, for 2020 is well below this, says Singleton. However, this “belt tightening” comes with reduced cover and more obstacles to overcome.
Singleton says that medical inflation is defined as the observed increase in member claims from a medical scheme over the previous year. There are a few reasons for this increase, not least of which is the fact that healthcare services are becoming more expensive. More hospitals means more availability of hospital care, but it also means that more people are likely to seek treatment in hospital instead of alternative options, increasing costs, says Singleton. In addition, advances in medical treatments and technologies come with an increased price tag.
Adding to this, medical scheme members are using more healthcare services, says Singleton. Claims continue to increase, creating pressure on contribution increases. Populations are ageing, thanks to modern medicine helping us to live longer, and this means that medical scheme members are older and are more likely to require treatment and medication, he says.
Medical inflation is appreciably higher than the increases that medical schemes have implemented for next year. It is extremely difficult, in light of this, for medical schemes to provide the same level of services, says Singleton.