Discovery Limited · JSE:DSY
Discovery — Discovery Health Medical Scheme — Shareholder Meeting (June 2023)
95 slides from Discovery's shareholder meeting presentation, Jun 8, 2023
Slide 1: Annual General Meeting
ANNUAL GENERAL MEETING CHARLOTTE MBEWU | PRINCIPAL OFFICER 8 JUNE 2023
Slide 2: Working to our members
Working to our members CURRENT PROTECTING AND ENSURING THE REGULATORY AND LOOKING AHEAD TO LANDSCAPE FOR CARING FOR OUR SUSTAINABILITY OF GOVERNANCE 2023 AND BEYOND MEMBERS AND THE MEMBERS THE SCHEME EXCELLENCE SCHEME Macro-economic Leveraging innovation to Financial strength, ability Strong focus o
Slide 3: Current operating landscape
MEDICAL SCHEMES LANDSCAPE CURRENT OPERATING LANDSCAPE INCREASED MACRO SECOND-ORDER RETURN OF UTILISATION ENVIRONMENT COVID-19 LEVELS REFLECTING UNCERTAINTY HEALTH EFFECTS RENEWED PRESSURE ON INDUSTRY PRICING • High inflation • Screening and • Utilisation returning to prevention deficit 2019 base lev
Slide 4: 2022 saw increased macro environment uncertainty
MEDICAL SCHEMES LANDSCAPE 2022 SAW INCREASED MACRO ENVIRONMENT UNCERTAINTY A WORLD FACED WITH HIGH INFLATION RISING INTEREST RATES MARKET VOLITILITY UNPRECEDENTED CHALLENGES Indices rebased to July 2020 FY 2021 FY 2022 FY219 FY20 FY21 FY22 FY 2021 FY 2022 8% 4% 160 7% 4% 150 6% 3% 140 5% 3% 130 Russ
Slide 5: Industry monitors and responds to the evolution of the COVID-19 pandemic
MEDICAL SCHEMES LANDSCAPE INDUSTRY MONITORS AND RESPONDS TO THE EVOLUTION OF THE COVID-19 PANDEMIC PHASE 3 PHASE 1 PHASE 2 ENDEMIC STATE & PANDEMIC PHASE TRANSITION TO ENDEMIC STATE SECOND-ORDER EFFECTS • Immediate threat of COVID-19 • Shift to endemic state with consistent, localised • Screening an
Slide 6: Initial signs of deteriorating member health highlight the screening deficit
MEDICAL SCHEMES LANDSCAPE INITIAL SIGNS OF DETERIORATING MEMBER HEALTH HIGHLIGHT THE URGENT NEED TO ADDRESS THE COVID-19 SCREENING DEFICIT PREVENTATIVE SCREENING FEWER EARLY-STAGE CANCERS HIGHER SEVERITY AT MATERIALLY REDUCED OVER COVID-19 DUE TO A LACK OF SCREENING DIAGNOSIS OF DIABETES Proportion
Slide 7: Mental health prevalence is increasing globally
MEDICAL SCHEMES LANDSCAPE MENTAL HEALTH PREVALENCE IS INCREASING GLOBALLY, PRIMARILY DRIVEN BY ANXIETY AND DEPRESSION INCREASED PREVALENCE OF MENTAL HEALTH CONDITIONS AS THE GLOBAL SCALE OF MENTAL HEALTH CONDITIONS A RESULT OF COVID-19 There are over people living with a mental health The World Heal
Slide 8: Utilisation returning to pre-pandemic levels
MEDICAL SCHEMES LANDSCAPE UTILISATION RETURNING TO PRE-PANDEMIC LEVELS, REFLECTING HEALTHCARE NEEDS AND RENEWED PRESSURE ON INDUSTRY PRICING RETURNING UTILISATION EVIDENT ACROSS THE SOUTH DHMS UTILISATION LEVELS MIRRORING MEDICAL AFRICAN MEDICAL SCHEME INDUSTRY SCHEME INDUSTRY INCREASES South Africa
Slide 9: Divergent pricing strategies in the industry
MEDICAL SCHEMES LANDSCAPE DIVERGENT PRICING STRATEGIES IN THE INDUSTRY HAVE A LONG-TERM IMPACT ON SCHEME SUSTAINABILITY AND MEMBER AFFORDABILITY DIVERGENT PRICING STRATEGIES ACROSS THE INDUSTRY IN MEDICAL SCHEME PRICING DYNAMICS 2021 AND 2022 Claims vs contributions experience – SUSTAINABILITY defer
Slide 10: Working to our members
Working to our members CURRENT PROTECTING AND ENSURING THE REGULATORY AND LOOKING AHEAD TO LANDSCAPE FOR CARING FOR OUR SUSTAINABILITY OF GOVERNANCE 2023 AND BEYOND MEMBERS AND THE MEMBERS THE SCHEME EXCELLENCE SCHEME Macro-economic Leveraging innovation to Financial strength, ability Strong focus o
Slide 11: DHMS is committed to caring for and protecting members
PROTECTING AND CARING FOR OUR MEMBERS DHMS IS COMMITTED TO CARING FOR AND PROTECTING MEMBERS MEASURES TO ENSURE COMPREHENSIVE COVER IMPROVED PATIENT OUTCOMES AND HEALTHCARE EXPERIENCE LONG-TERM AFFORDABILITY Protecting members in need Centres of excellence Extensive oncology cover Deferred contribut
Slide 12: Comprehensive cover when members need it most
PROTECTING AND CARING FOR OUR MEMBERS COMPREHENSIVE COVER WHEN MEMBERS AND THEIR FAMILIES NEED IT MOST 10 of the highest member claims paid in 2022: R46.8 m R6.4m Age 51 Long-term use of a ventilator (infections) R 5.6m Age 45 Infection of the nervous system worth of contributions to fund R 5.2m Age
Slide 13: DHMS provides more comprehensive in-hospital cover than the market
PROTECTING AND CARING FOR OUR MEMBERS DHMS CONTINUES TO PROVIDE MORE COMPREHENSIVE IN-HOSPITAL COVER THAN THE MARKET IN-HOSPITAL CLAIMS PAYOUT RATIO DHMS PROVIDES GREATER VALUE THROUGH HIGHER COVER RATIOS ACROSS ALL INCREASES PROVIDERS DHMS in-hospital In-hospital claims payout ratio (2021) claims p
Slide 14: Value based care resulting in improved patient outcomes
PROTECTING AND CARING FOR OUR MEMBERS VALUE BASED CARE RESULTING IN IMPROVED PATIENT OUTCOMES AND BETTER HEALTHCARE EXPERIENCES CHRONIC DISEASE MANAGEMENT CO-ORDINATED CARE THROUGH CENTRES OF EXCELLENCE (DIABETES, CMO & GPS) PRIMARY CARE PROVIDER Expanding access to Improving quality of care for mem
Slide 15: Caring for members through extensive oncology cover
PROTECTING AND CARING FOR OUR MEMBERS CARING FOR MEMBERS THROUGH EXTENSIVE ONCOLOGY COVER ONCOLOGY COVER IMPORTANT FOR DHMS PROVIDES EXTENSIVE ONCOLOGY UNIQUE BENEFITS TO SUPPORT ACCESS ALL LIFE STAGES COVER TO MEMBERS TO MOST EFFECTIVE TREATMENTS DHMS highest oncology claims (2022) Since the introd
Slide 16: Caring for members through holistic management of disease
PROTECTING AND CARING FOR OUR MEMBERS CARING FOR MEMBERS THROUGH HOLISTIC MANAGEMENT OF DISEASE MORE DHMS MEMBERS ARE BEING INCREASED SUPPORT AVAILABLE TREATED FOR A MENTAL HEALTH THROUGH THE MENTAL HEALTH CARE POSITIVE OUTCOMES SET THE TONE FOR CONDITION PROGRAMME FUTURE SUCCESS +19% Join the progr
Slide 17: Contribution increase deferral strategy
PROTECTING AND CARING FOR OUR MEMBERS CONTRIBUTION INCREASE DEFERRAL STRATEGY RESULTED IN AFFORDABILITY, LOWER REAL INCREASES AND PRICING ACCURACY IMMEDIATE AFFORDABILITY LOWER REAL INCREASES PRICING ACCURACY or DHMS is sustainably priced per average membership closely matched to lowest weighted-ave
Slide 18: Working to our members
Working to our members CURRENT PROTECTING AND ENSURING THE REGULATORY AND LOOKING AHEAD TO LANDSCAPE FOR CARING FOR OUR SUSTAINABILITY OF GOVERNANCE 2023 AND BEYOND MEMBERS AND THE MEMBERS THE SCHEME EXCELLENCE SCHEME Macro-economic Leveraging innovation to Financial strength, ability Strong focus o
Slide 19: 2022 DHMS financial highlights: financial position
ENSURING SUSTAINABILITY OF THE SCHEME 2022 DHMS FINANCIAL HIGHLIGHTS: THE SCHEME IS FINANCIALLY SECURE FINANCIAL POSITION AT 31 DECEMBER 2022 2021 2022 Measure (R ‘000) (R ’000) Non-current assets 24,719,222 24,348,071 Current assets 16,566,181 15,478,904 Total assets 41,285,403 39,826,975 Members’
Slide 20: 2022 DHMS financial highlights: performance
ENSURING SUSTAINABILITY OF THE SCHEME 2022 DHMS FINANCIAL HIGHLIGHTS: THE SCHEME IS FINANCIALLY SECURE PERFORMANCE FOR CURRENT YEAR 2021 2022 Measure (R ’000) (R ’000) % change YoY Gross contribution income 75,816,287 79,542,906 5% Less savings contribution income (13,356,990) (13,911,979) 4% Net co
Slide 21: Growth and sustainability metrics
ENSURING SUSTAINABILITY OF THE SCHEME HOW DO WE ENSURE WE ARE HERE FOR OUR MEMBERS, TOMORROW AND INTO THE FUTURE? We measure key metrics for a sustainable medical scheme: Membership size Absolute reserves Growth and sustainability Financial strength Membership growth Pricing sufficiency Plan movemen
Slide 22: Growth and sustainability metrics explained
ENSURING SUSTAINABILITY OF THE SCHEME HOW DO WE ENSURE WE ARE HERE FOR OUR MEMBERS, TOMORROW AND INTO THE FUTURE? We measure key metrics for a sustainable medical scheme: Greater risk pooling means more predictable claims experience Membership size and accuracy in pricing, leading to stable performa
Slide 23: Discovery Health Medical Scheme continues to record strong growth
ENSURING SUSTAINABILITY OF THE SCHEME DISCOVERY HEALTH MEDICAL SCHEME CONTINUES TO RECORD STRONG GROWTH DHMS EXPERIENCING EXCEPTIONAL HEALTHY GROWTH ENSURES SCHEME STABLE MEMBERSHIP BASE GROWTH IN 2021 AND 2022 SUSTAINABILITY Young and healthy new joiner DHMS beneficiaries Low plan movement profile
Slide 24: In 2022, DHMS continued to grow ahead of the industry
ENSURING SUSTAINABILITY OF THE SCHEME IN 2022, DHMS CONTINUED TO GROW AHEAD OF THE REST OF THE INDUSTRY S T R O N G G R O W T H I N T H E F I R S T N I N E M O N T H S O F 2 0 2 2 R E S U LT E D I N D H M S CO N T I N U I N G LO N G -T E R M M A R K E T S H A R E G A I N S % growth in beneficiaries
Slide 25: Financial strength metrics
ENSURING SUSTAINABILITY OF THE SCHEME HOW DO WE ENSURE WE ARE HERE FOR OUR MEMBERS, TOMORROW AND INTO THE FUTURE? We measure key metrics for a sustainable medical scheme: Demonstrates ability to meet large, Absolute reserves unexpected claims variation. Financial strength Pricing sufficiency Surplus
Slide 26: DHMS has returned excess reserves to members
ENSURING SUSTAINABILITY OF THE SCHEME DHMS HAS RETURNED EXCESS RESERVES TO MEMBERS WHILE REMAINING WELL-PLACED TO MANAGE INCREASING HEALTHCARE UTILISATION STRONG SECURITY AND SURPLUS TO MANAGE 2022 DHMS PERFORMANCE UTILISATION VOLATILITY IN 2022 DHMS net healthcare Credit Solvency result 2022 – net
Slide 27: Net claims expenditure was 8.3% higher in 2022
ENSURING SUSTAINABILITY OF THE SCHEME NET DHMS CLAIMS EXPENDITURE WAS 8.3% HIGHER IN 2022 DUE TO A RETURN OF HEALTHCARE UTILISATION 2021 EXPENSE BREAKDOWN 2022 EXPENSE BREAKDOWN 100.0% 89.1% 100.0% 91.7% million million healthcare claims healthcare claims 1.2 million more claims than in the previous
Slide 28: Administration expenditure among the lowest in the industry
ENSURING SUSTAINABILITY OF THE SCHEME MEMBERS BENEFIT THROUGH REDUCING ADMINISTRATION EXPENDITURE THAT IS AMONG THE LOWEST IN THE INDUSTRY ADMINISTRATION EXPENDITURE AS % OF ADMINISTRATION EXPENDITURE AS % OF GROSS CONTRIBUTION INCOME (2011 – 2021) GROSS CONTRIBUTION INCOME (2021) DHMS All other ope
Slide 29: Our members receive outstanding value from Discovery Health
ENSURING SUSTAINABILITY OF THE SCHEME OUR MEMBERS RECEIVE OUTSTANDING VALUE FROM DISCOVERY HEALTH VALUE GENERATED FOR DHMS MEMBERS R2.12 R2.03 R2.02 R1.88* on managed care and administration fees, members of DHMS derived Reviewed by Deloitte *Decrease is result of decrease in utilisation resulting f
Slide 30: Internal controls have saved the scheme ~R1bn per annum
ENSURING SUSTAINABILITY OF THE SCHEME DISCOVERY HEALTH’S INTERNAL CONTROLS HAVE SAVED THE SCHEME ~ R1BN PER ANNUM SIGNIFICANT FRAUD SAVINGS AND RECOVERIES CUMULATIVE HALO EFFECT OF R9.05 BILLION (2012-2022) Fraud savings and recoveries (Rm) 1 R472 R469 R464 R423 0.95 R380 R366 R329 R323 R333 0.9 R27
Slide 31: Growth and sustainability key metrics
ENSURING SUSTAINABILITY OF THE SCHEME HOW DO WE ENSURE WE ARE HERE FOR OUR MEMBERS, TOMORROW AND INTO THE FUTURE? We measure key metrics for a sustainable medical scheme: Membership size Absolute reserves 2.81m 57.6% Growth and sustainability Beneficiaries Market share R28.9bn 35.11% Reserves Solven
Slide 32: Working to our members
Working to our members CURRENT PROTECTING AND ENSURING THE REGULATORY AND LOOKING AHEAD TO LANDSCAPE FOR CARING FOR OUR SUSTAINABILITY OF GOVERNANCE 2023 AND BEYOND MEMBERS AND THE MEMBERS THE SCHEME EXCELLENCE SCHEME Macro-economic Leveraging innovation to Financial strength, ability Strong focus o
Slide 33: Strong independent governance structures
REGULATORY AND GOVERNANCE EXCELLENCE STRONG INDEPENDENT GOVERNANCE STRUCTURES WITH MA JORITY MEMBER-ELECTED TRUSTEES OUR GOVERNANCE STRUCTURES To promote desired outcomes in accordance with King IV GOVERNS AN ETHICAL GOOD BOARD OF CULTURE PERFORMANCE TRUSTEES SUPPORTS BELONG APPOINTS TO ELECT MANDAT
Slide 34: Roles, responsibilities and fiduciary duties of trustees
REGULATORY AND GOVERNANCE EXCELLENCE ROLES, RESPONSIBILITIES AND FIDUCIARY DUTIES OF TRUSTEES Provision of administration Scheme sustainability and managed care services Compliance with the Scheme Strategic risk management Rules, the Medical Schemes Act and other legislation The Trustees are Stakeho
Slide 35: DHMS continues to actively engage in broader industry issues
REGULATORY AND GOVERNANCE EXCELLENCE DHMS CONTINUES TO ACTIVELY ENGAGE IN BROADER INDUSTRY ISSUES LCBO FRAMEWORK ENGAGEMENTS TO PCR TESTING COMPLAINT LED BY NATIONAL HEALTH INSURANCE UPDATE EXTEND ACCESS TO HEALTHCARE HEALTH FUNDERS ASSOCIATION DHMS will continue to engage on Low Cost Benefit Option
Slide 36: Working to our members
Working to our members CURRENT PROTECTING AND ENSURING THE REGULATORY AND LOOKING AHEAD TO LANDSCAPE FOR CARING FOR OUR SUSTAINABILITY OF GOVERNANCE 2023 AND BEYOND MEMBERS AND THE MEMBERS THE SCHEME EXCELLENCE SCHEME Macro-economic Leveraging innovation to Financial strength, ability Strong focus o
Slide 37: Strategic management and rapid innovation delivered better healthcare in 2023
STRATEGIC MANAGEMENT AND RAPID INNOVATION HAS DELIVERED BETTER HEALTHCARE AND IMPROVED ACCESS FOR OUR MEMBERS IN 2023 GREATER AFFORDABILITY MANAGING COVID-19 IMPROVING PATIENT OUTCOMES ENHANCING BENEFITS AND THROUGH DEFERRAL IN 2023 SECOND ORDER EFFECTS FOR DHMS MEMBERS ACCESS TO QUALITY CARE Strong
Slide 38: The increase was once again deferred in 2023
2023 AND BEYOND THE INCREASE WAS ONCE AGAIN DEFERRED IN 2023 TO PROVIDE GREATER AFFORDABILITY TO MEMBERS DHMS CONTRIBUTION DEFERRAL STRATEGY CUMULATIVE IMPACT OF DEFERRAL STRATEGY (2021 – 2023) 1 July 2021 increase 1 Oct 2022 increase saved in contributions saved in 1 April 2023 increase for members
Slide 39: DHMS offers high-value cover across the benefit spectrum
2023 AND BEYOND DISCOVERY HEALTH MEDICAL SCHEME CONTINUES TO OFFER MEMBERS HIGH-VALUE COVER ACROSS THE BENEFIT SPECTRUM Highly competitive offering Average contributions in 2023 (principal member) -6.6% -7.1% -16.3% -21.5% Low income Hospital Limited day-to-day Extensive day-to-day Next 7 largest op
Slide 40: Significant investment in the health of our members from 2023
2023 AND BEYOND FROM 2023 DHMS IS MAKING A SIGNIFICANT INVESTMENT IN THE HEALTH OF OUR MEMBERS AND SUSTAINABILITY OF THE SCHEME LEVERAGING EXCESS SOLVENCY FOR THE OPTIMAL INVESTMENT IN THE LONG-TERM HEALTH OF HEALTH OF OUR MEMBERS MEMBERS AND SUSTAINABILITY OF THE SCHEME Regular health screening del
Slide 41: The WELLTH Fund boosts member screening and preventive care
2023 AND BEYOND THE WELLTH FUND HAS BEEN INTRODUCED TO BOOST MEMBER SCREENING AND ACCESS TO PREVENTIVE HEALTHCARE SERVICES AVAILABLE FOR ALL MEMBERS FROM MEMBERS HAVE ACCESS TO A BROAD RANGE OF DISCRETIONARY 1 JAN 2023 TO PROACTIVELY ADDRESS HEALTHCARE SERVICES COVERED BY THE FUND THE SCREENING DEFI
Slide 42: Members at risk of cardiometabolic syndrome proactively identified
2023 AND BEYOND MEMBERS AT RISK OF DEVELOPING CARDIOMETABOLIC SYNDROME ARE PROACTIVELY IDENTIFIED AND OFFERED RISK-FUNDED SUPPORT EARLY INTERVENTION IS FUNDAMENTAL THE DISEASE PREVENTION PROGRAMME PROVIDES RISK-FUNDED BENEFITS TO IN PREVENTING LONG-TERM ILLNESS ASSESS, MONITOR AND MANAGE CARDIOMETAB
Slide 43: Population health management programs
2023 AND BEYOND POPULATION HEALTH MANAGEMENT PROGRAMS TARGETING MEMBERS LIVING WITH HIGH PREVALENCE CONDITIONS OBJECTIVES STRATEGIC APPROACH PROGRAMMES 25% of members, accounting for 60% of Prevention and management of Improve the health of costs, are targeted for PHM programs high Impact non-commun
Slide 44: Working to our members
Working to our members CURRENT PROTECTING AND ENSURING THE REGULATORY AND LOOKING AHEAD TO LANDSCAPE FOR CARING FOR OUR SUSTAINABILITY OF GOVERNANCE 2023 AND BEYOND MEMBERS AND THE MEMBERS THE SCHEME EXCELLENCE SCHEME Macro-economic Leveraging innovation to Financial strength, ability Strong focus o
Slide 45: Annual General Meeting
ANNUAL GENERAL MEETING CHARLOTTE MBEWU | PRINCIPAL OFFICER 8 JUNE 2023
Slide 46: DHMS Annual General Meeting
DHMS ANNUAL GENERAL MEETING Chief Executive Officer, Discovery Health | Dr Ryan Noach June 2023
Slide 47: Review of industry performance, regulatory update, healthcare trends, member value
01 02 03 04 Review of industry Regulatory Healthcare trends Maximising DHMS performance update in 2023 and beyond member value 2
Slide 48: Health is top-of-mind for most South Africans since COVID-19
DESPITE CURRENT ECONOMIC CHALLENGES, HEALTH IS OF KEY RELEVANCE AND TOP-OF-MIND FOR MOST SOUTH AFRICANS, ESPECIALLY SINCE COVID-19 PANDEMIC …RESULTING IN DHMS MEMBERS …WITH IMPROVED SENTIMENT SEARCH TRENDS INDICATE ELEVATED PRIORITISING THEIR HEALTH COVER TOWARDS HEALTH AND WELLNESS INTEREST IN HEAL
Slide 49: Long-term trend of open scheme consolidation
LONG-TERM TREND OF OPEN SCHEME CONSOLIDATION REFLECTS CONSUMER PREFERENCES CONSOLIDATION REFLECTS CONSUMER DESIRE FOR SAFETY IN LARGER SCHEMES Open medical schemes in South Africa reduced from 49 to Larger medical schemes attracting 16 over the last 20 years greater proportion of scheme growth Open
Slide 50: In 2022, DHMS continued to grow ahead of the industry
IN 2022, DHMS CONTINUED TO GROW AHEAD OF THE REST OF THE INDUSTRY STRONG GROWTH IN THE FIRST NINE MONTHS OF 2022 RESULTED IN DHMS CONTINUING LONG-TERM MARKET SHARE GAINS Net growth in beneficiaries DHMS continues to gain market share (Dec ‘21 vs Sept ‘22) 798 2837% 794 791 6635% 787 0433% 4232% 783
Slide 51: Continued growth is indicative of a flight to quality
CONTINUED GROWTH IS INDICATIVE OF A FLIGHT TO QUALITY STABLE HEALTHY GROWTH CONTINUES TO GREATER RETENTION AND SURPLUS MEMBERSHIP BASE IMPROVE SCHEME SUSTAINABILITY CREATION THROUGH INTEGRATION Improved retention on New joiners are Vitality integrated memberships younger than No plan Plan Plan exist
Slide 52: Growth dynamics and balance of DHMS plans
GROWTH DYNAMICS AND BALANCE OF DHMS PLANS SUPPORT THE LONG-TERM FINANCIAL SUSTAINABILITY OF THE SCHEME GROWING PLANS ACCURATELY PRICED FOR LONG-TERM SUSTAINABILITY Growing Plans (‘21 vs ‘20) Net healthcare result (per annual beneficiary) +72 000 +62 000 lives lives R1,568 -R202 DHMS Next 6 largest o
Slide 53: Growth dynamics: contribution to surplus
GROWTH DYNAMICS AND BALANCE OF DHMS PLANS SUPPORT THE LONG-TERM FINANCIAL SUSTAINABILITY OF THE SCHEME GROWING PLANS ACCURATELY PRICED SURPLUS GENERATING GROWTH SUPPORTS FOR LONG-TERM SUSTAINABILITY LONG-TERM SCHEME SUSTAINABILITY DHMS Growing Plans 80% (‘21 vs ‘20) Net healthcare result 60% (per an
Slide 54: Growth dynamics: multiple growing surplus plans
GROWTH DYNAMICS AND BALANCE OF DHMS PLANS SUPPORT THE LONG-TERM FINANCIAL SUSTAINABILITY OF THE SCHEME GROWING PLANS ACCURATELY PRICED SURPLUS GENERATING GROWTH SUPPORTS FOR LONG-TERM SUSTAINABILITY LONG-TERM SCHEME SUSTAINABILITY DHMS Growing Plans 80% (‘21 vs ‘20) Multiple growing Net healthcare r
Slide 55: Underpricing evident in loss-making competitor schemes
GROWTH DYNAMICS AND BALANCE OF DHMS PLANS SUPPORT THE LONG-TERM FINANCIAL SUSTAINABILITY OF THE SCHEME UNDERPRICING EVIDENT IN LOSS-MAKING COMPETITOR SCHEMES: GROWTH OF INDUSTRY COMPETITORS OVERLY RELIANT ON ‘BREADWINNER’ PLANS Growing Plans Competitor Scheme A, B and C (‘21 vs ‘20) 300% Net healthc
Slide 56: Schemes with claims in excess of contributions must trade off benefit cuts
SCHEMES WITH CLAIMS IN EXCESS OF CONTRIBUTIONS MUST TRADE OFF BENEFIT CUTS AGAINST PRICE INCREASES… INDUSTRY EXCL. DHMS: NET HEALTHCARE LOSSES INDICATIVE OF CLAIMS EXCEEDING CONTRIBUTIONS Health Squared liquidation is a reminder of the Health Squared solvency plummeted implications of from 21% to 2%
Slide 57: DHMS remains accurately priced
…WHILE DHMS REMAINS ACCURATELY PRICED TO MAINTAIN SUSTAINABILITY AND LONG-TERM AFFORDABILITY AS WELL AS ENHANCE BENEFITS FOR MEMBERS DHMS PRICING ACCURACY REFLECTED IN 2022 Q3 NET HEALTHCARE RESULTS Supporting affordability for members Lower contributions Net healthcare result paid by members (‘21-’
Slide 58: Review of industry performance, regulatory update, healthcare trends, member value
01 02 03 04 Review of industry Regulatory Healthcare trends Maximising DHMS performance update in 2023 and beyond member value 13
Slide 59: NHI framework: DH supports universal health coverage
NHI FRAMEWORK | DH REMAINS IN FULL SUPPORT OF ACHIEVING UNIVERSAL HEALTH COVERAGE TO ADDRESS INEQUITIES AND STRENGTHEN THE HEALTH SYSTEM IN SA On Wednesday 24 May, amended NHI bill was approved by the Parliamentary Portfolio Committee despite the outstanding legal issues Clause 33 states: “Once Nati
Slide 60: Steps taken by DH following publishing of the NHI Bill
FOLLOWING PUBLISHING OF THE NHI BILL IN 2019, DH HAS TAKEN SEVERAL STEPS TO ADDRESS STAKEHOLDER CONCERNS Provided detailed submissions to NDoH and Parliamentary 01 Portfolio Committee supporting NHI and proposing multi- funded model for faster expansion and lower fiscal risk 02 Presented at Parliame
Slide 61: LCBO framework and NHI implementation
LCBO FRAMEWORK|NHI IMPLEMENTATION WILL LIKELY BE INCREMENTAL & LONG-TERM; LCBOs PRESENT AN IMMEDIATE OPPORTUNITY TOWARDS UNIVERSAL COVERAGE ENGAGEMENTS UNDERWAY LCBO PRODUCT DESIGN ON LCBO FRAMEWORK ▪ R150-R300 per beneficiary per month ▪ employer subsidies & tax credits ▪ primary care (nurse-led),
Slide 62: The Road Accident Fund process
THE ROAD ACCIDENT FUND PROCESS ROAD ACCIDENT FUND MONEY FLOWS Claims relating to road Member consent accident funds settled sought to seek immediately per recovery of eligible scheme benefits claims from the RAF Recoveries reduce [1] <10% of claim the net claims payments are Funded by the expenses a
Slide 63: RAF litigation progress to date
RAF LITIGATION PROGRESS TO DATE Aug 2022 RAF issues directive to stop payment of medical expense claims to road accident victims who are medical scheme members DH takes immediate action in consultation with industry body (HFA) to interdict application of the illegal directive Dec 2022 High court dec
Slide 64: Section 59 update
SECTION 59 UPDATE ▪ The Section 59 Investigation Panel has recently indicated that they are seeking to finalise POLICY AND REGULATORY AFFAIRS their report ▪ The interim report was published in January 2019 ▪ DH and DHMS welcomed the findings that forensic processes are conducted on a sound legal bas
Slide 65: Review of industry performance, regulatory update, healthcare trends, member value
01 02 03 04 Review of industry Regulatory Healthcare trends Maximising DHMS performance update in 2023 and beyond member value 20
Slide 66: Distinctive trends influencing South African private healthcare in 2023
DISTINCTIVE TRENDS INFLUENCING SOUTH AFRICAN PRIVATE HEALTHCARE IN 2023 01 Major restructure of healthcare systems Increasing lifestyle diseases resulting from rising chronic disease, 02 ageing of populations and long-term impact of COVID-19 03 Mental illness continues to escalate rapidly Care backl
Slide 67: The healthcare system is restructuring to improve access
Healthcare Restructure 2 Increasing disease burden 3 Mental Illness 4 Utilisation recovery 5 Value Based Care 6 Advances in LLMs 7 Empowered consumer THE HEALTHCARE SYSTEM IS RESTRUCTURING TO IMPROVE ACCESS AND EASE OF USE ENHANCED ACCESS TO CARE THROUGH INVESTMENT IN SEAMLESS PAYMENT OPTIONS DIRECT
Slide 68: Shift in places of care
Healthcare Restructure 2 Increasing disease burden 3 Mental Illness 4 Utilisation recovery 5 Value Based Care 6 Advances in LLMs 7 Empowered consumer GROWING NEED FOR GREATER CONVENIENCE AND ACCESS IS DRIVING A SHIFT IN PLACES OF CARE SURGICAL DIAGNOSTIC CONVENIENT DIGITAL HOME-BASED CARE SERVICES C
Slide 69: Prevalence and complexity of lifestyle disease continues to rise
1 Healthcare Restructure Increasing disease burden 3 Mental Illness 4 Utilisation recovery 5 Value Based Care 6 Advances in LLMs 7 Empowered consumer PREVALENCE AND COMPLEXITY OF LIFESTYLE DISEASE CONTINUES TO RISE IN SOUTH AFRICA CHRONIC RATIOS CONTINUE TO INCREASE WHILE THERE IS ALSO AN INCREASE I
Slide 70: Mental health is on the rise
1 Healthcare Restructure 2 Increasing disease burden Mental Illness 4 Utilisation recovery 5 Value Based Care 6 Advances in LLMs 7 Empowered consumer MENTAL HEALTH IS ON THE RISE WITH DEPRESSION BEING A KEY DRIVER OF THIS TREND ACROSS DHMS MEMBERS GLOBAL PREVALENCE OF PREVALENCE OF MENTAL HEALTH CON
Slide 71: Multitude of mental health digital apps now available
1 Healthcare Restructure 2 Increasing disease burden Mental Illness 4 Utilisation recovery 5 Value Based Care 6 Advances in LLMs 7 Empowered consumer MULTITUDE OF MENTAL HEALTH DIGITAL APPS NOW AVAILABLE IN THE MARKET GLOBAL SPEND ON MENTAL HEALTH AND WELLNESS MOBILE APPS* 600 491 500 400 372 Mental
Slide 72: COVID-19 claims trend returning to 2019 mix
1 Healthcare Restructure 2 Increasing disease burden 3 Mental Illness Utilisation recovery 5 Value Based Care 6 Advances in LLMs 7 Empowered consumer A ONCE IN A LIFETIME COVID-19 CLAIMS TREND IS RETURNING TO 2019 MIX INFECTIONS HAVE DROPPED FROM PEAK IN 2021, WHILE CARDIOVASCULAR REMAINS LARGEST CH
Slide 73: Surgical utilisation and medical admission rates returning to 2019 levels
1 Healthcare Restructure 2 Increasing disease burden 3 Mental Illness Utilisation recovery 5 Value Based Care 6 Advances in LLMs 7 Empowered consumer SURGICAL UTILISATION & MEDICAL ADMISSION RATES RETURNING TO 2019 LEVELS SURGICAL UTILISATION RETURNING TO 2019 BASE LEVELS MEDICAL ADMISSIONS IN 2023
Slide 74: Prevention and screening volumes remain lower than pre-COVID-19
1 Healthcare Restructure 2 Increasing disease burden 3 Mental Illness Utilisation recovery 5 Value Based Care 6 Advances in LLMs 7 Empowered consumer PREVENTION AND SCREENING VOLUMES ARE INCREASING, HOWEVER REMAIN LOWER THAN PRE-COVID19 LEVELS MAMMOGRAMS PER 1,000 FEMALE 50+ LIVES PAP SMEARS PER 1,0
Slide 75: WELLTH Fund introduced to boost member screening
1 Healthcare Restructure 2 Increasing disease burden 3 Mental Illness Utilisation recovery 5 Value Based Care 6 Advances in LLMs 7 Empowered consumer IN 2023, DHMS INTRODUCED THE WELLTH FUND TO BOOST MEMBER SCREENING AND ACCESS TO PREVENTIVE HEALTHCARE SERVICES ADDITIONAL BENEFIT TO REVERSE COVERS A
Slide 76: DH is accelerating scaling of VBC arrangements
1 Healthcare Restructure 2 Increasing disease burden 3 Mental Illness 4 Utilisation recovery Value Based Care 6 Advances in LLMs 7 Empowered consumer DH IS ACCELERATING SCALING OF VBC ARRANGEMENTS TO GUARANTEE QUALITY …AND DH HAS MADE SIGNIFICANT PROGRESS IN SECURING GLOBAL INTEREST IS GROWING… IH V
Slide 77: Large language models shaping the world
1 Healthcare Restructure 2 Increasing disease burden 3 Mental Illness 4 Utilisation recovery 5 Value Based Care Advances in LLMs 7 Empowered consumer LARGE LANGUAGE MODELS (LLMs) LIKE CHATGPT ARE SHAPING THE WORLD ON A SCALE NOT SEEN SINCE THE IPHONE REVOLUTION RAPID USER UPTAKE OF CHATGPT SIGNIFICA
Slide 78: Rise of the empowered healthcare consumer
1 Healthcare Restructure 2 Increasing disease burden 3 Mental Illness 4 Utilisation recovery 5 Value Based Care 6 Advances in LLMs Empowered consumer THE RISE OF THE EMPOWERED HEALTHCARE CONSUMER IS DRIVING DEMAND FOR TRANSPARENCY TO INFLUENCE DECISION MAKING & CHOICES THE RISE OF THE EMPOWERED GLOB
Slide 79: Review of industry performance, regulatory update, healthcare trends, member value
01 02 03 04 Review of industry Regulatory Healthcare trends Maximising DHMS performance update in 2023 and beyond member value 34
Slide 80: DH invests in capabilities that maximise DHMS member value
DH CONTINUES TO INVEST IN CAPABILITIES THAT MAXIMISE DHMS MEMBER VALUE 01 02 03 DIGITAL HEALTHCARE SYSTEM POPULATION HEALTH INNOVATION TRANSFORMATION MANAGEMENT 04 CLINICAL RISK INTELLIGENCE 05 QUALITY MEASUREMENT 06 PROACTIVE SERVICING 35
Slide 81: Multi-year investment in digital assets
Healthcare Population Digital Innovation 2 System Transformation 3 Health Management 4 Clinical Risk Intelligence 5 Quality Measurement 6 Proactive Servicing MULTI-YEAR INVESTMENT IN DIGITAL ASSETS TO DIFFERENTIATE HEALTHCARE DELIVERY FOR DHMS MEMBERS PLACING MEMBERS AT THE CENTRE OF A INVESTMENT Co
Slide 82: Sophisticated assets and capabilities to support healthcare transformation
Healthcare Population 1 Digital Innovation System Transformation 3 Health Management 4 Clinical Risk Intelligence 5 Quality Measurement 6 Proactive Servicing SOPHISTICATED ASSETS & CAPABILITIES TO SUPPORT HEALTHCARE SYSTEM TRANSFORMATION… SOPHISTICATED SET OF HEALTH RISK MANAGEMENT ASSETS APPLICATIO
Slide 83: Supporting shifts in places of care
Healthcare Population 1 Digital Innovation System Transformation 3 Health Management 4 Clinical Risk Intelligence 5 Quality Measurement 6 Proactive Servicing …SUPPORTING SHIFTS IN PLACES OF CARE HOSPITAL-AT-HOME NANO-LABS PARTNERSHIP VIRTUAL CONSULTS PROGRAMME (POINT OF CARE PATHOLOGY) AT-SCALE Sout
Slide 84: Comprehensive disease management interventions for high-risk members
Healthcare Population 1 Digital Innovation 2 System Transformation Health Management 4 Clinical Risk Intelligence 5 Quality Measurement 6 Proactive Servicing DELIVERING COMPREHENSIVE DISEASE MANAGEMENT INTERVENTIONS FOR HIGH-RISK MEMBERS PRE-DIAGNOSIS DISEASE MANAGEMENT [DISEASE PREVENTION PROGRAMME
Slide 85: Big data and predictive analytics to identify members
Healthcare Population 1 Digital Innovation 2 System Transformation 3 Health Management Clinical Risk Intelligence 5 Quality Measurement 6 Proactive Servicing BIG DATA & PREDICTIVE ANALYTICS TO IDENTIFY MEMBERS MOST LIKELY TO BENEFIT MOST FROM DISEASE MANAGEMENT INTERVENTIONS PREDICTING FUTURE EVENTS
Slide 86: Patient X predictive model
Healthcare Population 1 Digital Innovation 2 System Transformation 3 Health Management Clinical Risk Intelligence 5 Quality Measurement 6 Proactive Servicing “PATIENT X” PREDICTIVE MODEL FOR IDENTIFYING MEMBERS ELIGIBLE FOR CLINICAL CARE PROGRAMMES Interventions Synthesize Stratify Route Members wit
Slide 87: Collaborative VBC arrangements for improved outcomes
Healthcare Population 1 Digital Innovation 2 System Transformation 3 Health Management 4 Clinical Risk Intelligence Quality Measurement 6 Proactive Servicing COLLABORATIVE VBC ARRANGEMENTS FOR IMPROVED OUTCOMES CAD CARE ONCOLOGY VALUE PALLIATIVE VALUE PROGRAMME BASED CARE BASED CARE Compulsory CTCA
Slide 88: Members can view how a hospital performs on quality measures
Healthcare Population 1 Digital Innovation 2 System Transformation 3 Health Management 4 Clinical Risk Intelligence Quality Measurement 6 Proactive Servicing FOR THE FIRST TIME IN SA, MEMBERS CAN VIEW HOW A HOSPITAL PERFORMS AGAINST OTHERS ON MEASURES OF QUALITY HOSPITAL CARE ASSISTS MEMBERS TO NAVI
Slide 89: New digital capabilities to meet shift in digital servicing demands
Healthcare Population 1 Digital Innovation 2 System Transformation 3 Health Management 4 Clinical Risk Intelligence 5 Quality Measurement Proactive Servicing NEW DIGITAL CAPABILITIES TO MEET THE SHIFT IN DIGITAL SERVICING DEMANDS ENGAGEMENT CHANNELS BUILDING A CUSTOMER JOURNEY-LED SERVICE ORGANISATI
Slide 90: New digital capabilities to meet shift in digital servicing demands
Healthcare Population 1 Digital Innovation 2 System Transformation 3 Health Management 4 Clinical Risk Intelligence 5 Quality Measurement Proactive Servicing NEW DIGITAL CAPABILITIES TO MEET THE SHIFT IN DIGITAL SERVICING DEMANDS ENGAGEMENT CHANNELS BUILDING A CUSTOMER JOURNEY-LED SERVICE ORGANISATI
Slide 91: New digital capabilities to meet shift in digital servicing demands
Healthcare Population 1 Digital Innovation 2 System Transformation 3 Health Management 4 Clinical Risk Intelligence 5 Quality Measurement Proactive Servicing NEW DIGITAL CAPABILITIES TO MEET THE SHIFT IN DIGITAL SERVICING DEMANDS ENGAGEMENT CHANNELS BUILDING A CUSTOMER JOURNEY-LED SERVICE ORGANISATI
Slide 92: New digital capabilities: intelligent agent dashboard
Healthcare Population 1 Digital Innovation 2 System Transformation 3 Health Management 4 Clinical Risk Intelligence 5 Quality Measurement Proactive Servicing NEW DIGITAL CAPABILITIES TO MEET THE SHIFT IN DIGITAL SERVICING DEMANDS ENGAGEMENT CHANNELS BUILDING A CUSTOMER JOURNEY-LED SERVICE ORGANISATI
Slide 93: LLMs to improve member servicing experiences
Healthcare Population 1 Digital Innovation 2 System Transformation 3 Health Management 4 Clinical Risk Intelligence 5 Quality Measurement Proactive Servicing LARGE LANGUAGE MODELS (LLMs) TO IMPROVE MEMBER SERVICING EXPERIENCES USING GLOBAL ARTIFICIALSPEND ON MENTAL INTELLIGENCE HEALTH TO CREATE AND
Slide 94: Enhancing member digital experiences
Healthcare Population 1 Digital Innovation 2 System Transformation 3 Health Management 4 Clinical Risk Intelligence 5 Quality Measurement Proactive Servicing ENHANCING MEMBER DIGITAL EXPERIENCES DIGITISE PAPER- ENHANCEmember Enhance MEMBERdigital DIGITALexperiences EXPERIENCES IMPROVE MEMBER OUTREAC
Slide 95: Exceptional service scores recorded across stakeholders
Healthcare Population 1 Digital Innovation 2 System Transformation 3 Health Management 4 Clinical Risk Intelligence 5 Quality Measurement Proactive Servicing EXCEPTIONAL SERVICE SCORES RECORDED ACROSS STAKEHOLDERS GLOBAL BENCHMARKING (2022) INDUSTRY RECOGNITION AND AWARDS FIRST CALL RESOLUTION (FCR)
Discovery Health Medical Scheme — Shareholder Meeting (June 2023) on 6ix