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GEMS puts on a healthy showing

RAPID growth of the Government Employees Medical Scheme (Gems) is continuing.

Established three years ago, the scheme now covered more than 1 million people, Eugene Watson, the principal officer, said on Friday.

Gems, the second-largest medical aid scheme after Discovery Health, has 363 000 principal members. Watson said this represented more than a third of all eligible public service employees.

The scheme, which is restricted, processed more than 500 new membership applications a day. Watson said it had grown by more than 1 000 lives a day since its inception.

Three weeks ago Discovery Health, which covers 2.2 million lives, said it was signing 1 000 new members every day - growth that is attributed to low-income earners and people who previously did not belong to a medical aid scheme.

"Gems now provides cover to 2 percent of the South African population, and when one considers that 55 percent of Gems members did not have cover previously, it is noteworthy that (it) has introduced medical scheme benefits to approximately 1 percent of the population in a period of three years," said Watson.

Of the 76 996 employees who joined the public sector in 2006 in the level salary bracket one to five (those earning between R3 000 and R7 000 a month) 60 percent are people who were not previously covered, while the remainder are people from other schemes.

More than 130 000 government employees on salary level one to five belong to Gems.

All public service employees covered by the Public Service Act, except where their conditions of service excluded them from membership, were eligible to join Gems.

The scheme's balance sheet is just as healthy.

In the year to December, Gems delivered a surplus of R508 million, a 250 percent jump from 2007.

It collected more than R5.5 billion in member contributions - 220 percent more than in 2007 - while the value of claims paid increased to R4.7bn from R2.1bn.

The reserves ratio at the end of last year was 12.9 percent, more than the 6.2 percent in the previous year.

"It is particularly noteworthy that the scheme received unqualified audit reports for the three consecutive years of its existence," said Watson.

Meanwhile, Fedhealth reported it had increased its members by nearly 9 percent.

Slindile Khanyile: Business Report, 29 June 2009

Tuberculosis programme wins UN Award

AN INNOVATIVE project to combat tuberculosis and youth unemployment in Cape Town has been recognised by the United Nations, achieving finalist status for a UN Public Service Award.

Those close to the project are calling for its success to be replicated nationwide.

"This is a model of excellence, which, if implemented throughout the country, will effectively reduce the tuberculosis pandemic to manageable proportions," said Rhoda Kadalie of Impumelelo Trust, which motivated the nomination.

The programme, a partnership between City Health, the Provincial Department of Health, and the TB/HIV Care Association, began in 2005.

It jointly addresses low TB treatment adherence and high youth unemployment by recruiting school-leavers as TB assistants and TB clerks.

Ivan Bromfield of City Health says the results are "impressive."

UN Secretary General Ban Ki-moon said they prove public services can be delivered more efficiently, effectively, and equitably worldwide.

Sonya Bell: The Cape Times, 26 June 2009

Medicine expenditure up by 26% in private healthcare industry

MEDICINE expenditure in the South African private healthcare industry has increased by 26% between 2006 and 2008, according to Christo Rademan, managing director of pharmaceutical benefit management company, Mediscor PBM.

Commenting on the findings of the annual Mediscor Medicines Review (MMR), Rademan said this sharp rise in medicine expenditure added further impetus to the now well-established notion that medicines remain one of the largest factors influencing healthcare costs in the medical schemes environment. He said that the average cost per beneficiary per annum, in terms of medication expenditure, had shown a sharp rise from R1 792 in 2006 to R2 258 in 2008. Rademan said the average gross cost per item rose by 11.5% between 2006 and 2007 and by a further 9.5% between 2007 and 2008. This increase was the driving force behind the overall increase in medicine expenditure in 2007 and 2008, he said. According to the 2008 MMR the single exit price (SEP), which increased by 8.3% between January 2006 and December 2008, was a major contributing factor in driving medicine costs.

Madelein Bester, manager of Benefit Management at Mediscor explained that over-the-counter medicines, in particular, reflected an extremely high 13.6% increase between January 2006 and December 2008. She added that medicines registered with the Medicines Control Council prior to 2004 were responsible for a 9.7% increase in average gross item cost between 2006 and 2007 and again for a 7.6% increase between 2007 and 2008. New chemical entities (registered after 2003) resulted in an item cost increase of 1.8% and 1.9% for 2007 versus 2006, and 2008 versus 2007 respectively. Bester said that although they contributed less to the total expenditure increase, new chemical entities were responsible for 4.1% of the total medicine expenditure, but represented only 1.2% of the total volume of medicines. She said that on a positive note, the generic utilisation rate had shown a steady increase between 2006 and 2008, from 45.5% in 2006 to 47.4% in 2008. She attributed this mainly to the fact that more generic alternatives were now available on the market while managed care initiatives, driving generic utilisation, were having the desired effect.

Bester said the introduction of reference pricing and formularies promoting generic utilisation, greater public awareness and mandatory generic substitution at pharmacy level were also playing a vital role in driving generic utilisation. The top ten therapeutic groups for 2008 once again paint an interesting picture as far as the major healthcare issues of South African private healthcare consumers are concerned.  Together they represent more than 47% of the total medicine expenditure reported.
 
Therapeutic group                                                              Total % of expenditure  

1. Anti-hypertensives (blood pressure lowering agents): 11.0  
2. Hypolipidaemic agents (cholesterol lowering agents): 5.7  
3. Cytostatics (oncology medicines): 5.5  
4. Anti-depressants: 5.0  
5. Gastric acid reducers: 4.4  
6. Anti-diabetic agents: 3.8  
7. Beta-lactam antibiotics: 3.1  
8. Hormone replacements: 3.0  
9. Non-steroidal anti-inflammatories (including anti-arthritics):2.9  
10. Combination analgesics (painkillers): 2.8 
 
Another interesting fact highlighted in the report is that the oncology benefit demonstrated the largest increase in contribution towards total expenditure, with an increase of 3.4% in total expenditure from 2006 to 6.4% in 2007 and 8% in 2008. Bester said this was attributable to the significant increase in the percentage of beneficiaries claiming for oncology medicines, as well as an increase in the average cost per item claimed.

Oncology prevalence increased from 0.3% in 2006 to 0.6% in 2008. Together with this, the average item cost increased from R1 445 in 2006 to R1 761 in 2007 and R1 980 in 2008, resulting in a 41% increase in cost per patient. This trend is, in part, attributed to the fact that since the introduction of SEP and professional fees, these expensive products were no longer dispensed by the treating oncologists, but by pharmacies.

An increase in the prevalence of oncology in the general population and the availability of more expensive and specialised treatments for these conditions, should however not be discounted. Mediscor PBM processes prescription claims submitted by providers from various specialities, including pharmacies (retail and courier), general practitioners, medical specialists and other disciplines.

According to the 2008 MMR the majority of claims (81.9%) were submitted by retail pharmacies while 10.2% of items were claimed by general practitioners and a further 7.9% by courier pharmacies. Rademan said that from 2006 to 2008 the portion of claims received from retail pharmacies increased by 6%, while claims from general practitioners and medical specialists respectively reduced by 32% and 4%. More patients were making use of retail pharmacies instead of receiving medicines from dispensing doctors, he concluded.