COVID experience in South Africa

COVID experience in South Africa

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Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo

Mpumalanga Northern Cape Western Cape National

Profmed testing and cases

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Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

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Negative Positive tests Positive rate (7 day average)

COVID-19 FINANCIAL IMPACT

Pandemic impact on claims

• Low utilisation was greater than COVID costs in 2020

• Low utilisation has been fully offset by COVID costs in 2021

-70 000 000-65 000 000-60 000 000-55 000 000-50 000 000-45 000 000-40 000 000-35 000 000-30 000 000-25 000 000-20 000 000-15 000 000-10 000 000-5 000 000

- 5 000 000

10 000 000 15 000 000

20 000 000 25 000 000 30 000 000 35 000 000 40 000 000 45 000 000 50 000 000

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul2020 2021

CLAI

MS

COVID-19 claims Low healthcare utilisation Net impact on claims

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Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug

CUM

ULA

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AIM

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In hospital Out of hospital COVID test Vaccines

Total paid for COVID-19 claims

R243 million

CLAIM TYPE• Hospital R226 million• Testing R8.5 million• Out of hospital R4.2 million• Vaccines R8.5 million

WAVES• Wave 1 R64 million• Wave 2 R94 million• Wave 3 R95 million

YEAR• 2020 R88 million• 2021 R155 million

Profmed COVID claims paid

COVID costs were felt most acutely for the ProActive and ProActive Plus options

COVID claims by option

12.1%

10.7%

8.3%7.4% 7.7%

0%

2%

4%

6%

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100 000 000

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ProActive ProActive Plus ProSecure ProSecure Plus ProPinnacle

% C

OV

ID C

LAIM

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CLAI

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(APR

202

0-AU

G 2

021)

Non-COVID claims COVID claims % COVID claims

Vaccine uptake

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May June July August

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Pfizer first dose Pfizer second dose Johnson and Johnson

MEMBERSHIP GROWTH

Membership growth

Profmed has shown consistent growth in membership, including during the COVID-19 pandemic

Membership Growth

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2013 2014 2015 2016 2017 2018 2019 2020

NU

MBE

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F PR

INCI

PAL

MEM

BERS

-8%

-3%

3%

8%

13%

Profmed Bestmed Discovery Fedhealth Medihelp Medshield Momentum

Annu

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erce

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owth

in b

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Profmed has shown consistent growth in membership, including during the COVID-19 pandemic

Membership Growth (proportionate)

LONG-TERM UTILISATION TRENDS

95

100

105

110

115

120

125

130

Year 1 Year 2 Year 3

Claims Base Consumer Inflation :Tarriff Medical Inflation : Resources

Medical Inflation : Technology Utilisation Increases: Access to treatment Utilisation Increases: Disease Burden

109

127

118

Healthcare Inflation: Medical Schemes

-4%

-2%

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4%

6%

8%

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16%

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Projected

PERC

ENTA

GE

INCR

EASE

Claims increases Contribution increases

Long-term increases in claims

On average claims have increased by 12.3% from 2016 to 2019

2020 was an exception due to low healthcare utilisation during the pandemic

Claims increases have been driven by supplier-related increases, which have been volatile from year-to-year

Buy-down of members from high to low options (without a corresponding drop in claims) costs the Scheme about 1.6% of contributions annually

• Claims reverting to pre-pandemic levels

• The Scheme built R160 mil reserves in 2020

• All Surplus of funds are retained for future expenses

• How to keep pace with claims increases to avoid annual large losses

• The Scheme is taking a long-term view to protect it’s financial position

• Uncertainty around 4th waves, cost and impact of vaccines and need for future boosters

41.2%

37.5%

30.3% 30.1%

34.8%

38.0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

PRO

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OLV

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RAT

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Budgeting for claims post-COVID

COMPETITIVE POSITIONIN MARKET

Premium options 2018

AVERAGE BENEFIT RICHNESS

AVER

AGE

CON

TRIB

UTI

ON

2019 saw introduction of the ProActive Plus day-to-day benefit

Premium options 2019AV

ERAG

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NTR

IBU

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ERAG

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2022 will see further enhancements to the ProActive Plus day-to-day benefit, which increases by R500.



AVER

AGE

CON

TRIB

UTI

ON

ProActive and ProActive Plus

Rand increasePrincipal member Adult dependant Child dependant

Actual Rand Contributions1290 1290 577

ProActive

Bonitas Bonstart (GP + hospital Network) 1452 1452 1452Bonitas Bon Essential Select (Network for hospital and GP) 1675 1281 491

ProActive Plus 2055 1910 802

Discovery Essential Core (Hospital Network and specialist network, no Day-To-Day) 2229 1671 896

Discovery Classic Core (Hospital Network and specialist network rate, no Day-To-Day) 2598 2046 1038

Actual Rand Contribution

AVER

AGE

CON

TRIB

UTI

ON


ProSecure and ProSecure Plus Premium

Actual Rand ContributionsRand increase

Principal member Adult dependant Child dependantProSecure (unlimited hospital and D2D R11654) 3672 3672 1434Bonnitas Standard (Copayments for certain procedures Orthopeadic, D2D R6 230 - 12 840) 4044 3506 1186

Bonnitas Bon Complete (Unlimited hospital, R8892 Savings and Threshhold) 4291 3436 1165

ProSecure Plus (unlimited hospital and D2D of R22842) 4079 3777 1594Discovery Classic Saver (Day Surgery Network and co-payment up to R6450, MSA R22 200) 3485 2750 1397

Medshield MediBonus (Major Copayments on hospital procedures R6000, Annual D2D is R18 000) 6147 4320 1218

Actual Rand Contribution Comparison

AVER

AGE

CON

TRIB

UTI

ON


ProPinnacle Premium

CONTRIBUTION INCREASES

Contribution increase % comparison

1.00

1.10

1.20

1.30

1.40

1.50

1.60

0%

2%

4%

6%

8%

10%

12%

14%

16%

2017 2018 2019 2020 2021

CUM

ULA

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SE

ANN

UAL

INCR

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Profmed Discovery Momentum Medihelp Bestmed Medshield Fedhealth Bonitas

Projected Contribution Increases 2022• Based on our current experience, a projected contribution increase of 8.9% is needed

Percentage increase

Average Rand increasePRINCIPAL MEMBER

ADULT DEPENDANT

CHILD DEPENDANT

ProActive Premium and Savvy 9.1% 162 156 65

ProActivePlus

Premium and Savvy 9.1% 200 185 79

ProSecure Premium and Savvy 8.6% 335 315 130

ProSecure Plus


ProPinnacle Premium and Savvy 8.6% 722 665 212

*Percentage increases exclude an increase to ProActive dependent contributions and an increase to fund enhancement of the ProActive Plus day-to-day benefit

WEIGHTED INCREASE IS

6,68% SAVES R49 MILLION FOR MEMBERS

CONTRIBUTION INCREASES DEFERRED TO 1 APRIL 2022

We have considered the difficult economic situations of our members

Have had a surplus year in 2020 R160 mil (…but not 2021, COVID claims added R165 mil and still not finished)

Based on our current projections a contribution increase of 8.9% is needed

COVID Costs: Vaccines expected of total R40 mil

We may have a 4th wave in November/December 2021

Finalise increase in March but limited to 8,9% at that time

We remain extremely competitive

Contribution comparison – ProActive and ProActive Plus

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2016 2017 2018 2019 2020 2021 2022 projected

PRIN

CIPA

L M

EMBE

R CO

NTI

RBU

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Discovery Essential core Discovery Classic core Bonitas Primary Profmed ProActive Profmed ProActive Plus

Contribution comparisonContribution comparison ProActive and ProActive Plus

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2016 2017 2018 2019 2020 2021 2022 projected

PRIN

CIPA

L M

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IBU

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Discovery Essential Comprehensive Discovery Classic Comprehensive Bestmed Pace 1 Bonitas Standard Profmed ProSecure Profmed ProSecure Plus

Contribution comparison ProSecure and ProSecure Plus

Contribution comparison – ProPinnacle

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10 000

2016 2017 2018 2019 2020 2021 2022 projected

PRIN

CIPA

L M

EMBE

R CO

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IBU

TIO

N

Discovery Executive Bestmed Pace 4 Bonitas BonComprehensive Profmed ProPinnacle

Rand increase comparisonContribution comparison ProPinnacle

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50

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2016 2017 2018 2019 2020 2021 2022 projected

RAN

D IN

CREA

SE

Profmed ProActive Profmed ProActive Plus Discovery Essential core Discovery Classic core Bestmed Beat 1 Bonitas Primary

Rand increase comparison ProActive and ProActive Plus

Rand increase comparison

-

100

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300

400

500

600

700

2016 2017 2018 2019 2020 2021 2022 projected

RAN

D IN

CREA

SE

Profmed ProSecure Profmed ProSecure Plus Discovery Essential Comprehensive Discovery Classic Comprehensive Bonitas Standard

Rand increase comparison ProSecure and ProSecure Plus

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100

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700

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900

2016 2017 2018 2019 2020 2021 2022 projected

RAN

D IN

CREA

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Profmed ProPinnacle Discovery Executive Bonitas BonComprehensive

Rand increase comparison ProPinnacle

Projected Contribution Increases 2022• Based on our current experience, a projected contribution increase of 8.9% is needed

Percentage increase

Average Rand increasePRINCIPAL MEMBER

ADULT DEPENDANT

CHILD DEPENDANT

ProActive Premium and Savvy 9.1% 162 156 65

ProActivePlus


ProSecure Premium and Savvy 8.6% 335 315 130

ProSecure Plus


ProPinnacle Premium and Savvy 8.6% 722 665 212

*Percentage increases exclude an increase to ProActive dependent contributions and an increase to fund enhancement of the ProActive Plus day-to-day benefit

Documents

COVID experience in South Africa