There’s nothing like a few monthly debit orders to make you go from prince to pauper. Car payments, insurance, rent – all of these combine to sap the bank balance before you’ve had the chance to make bad life decisions with how you spend your money.

Then there’s medical aid, a necessary evil given what a short stay in hospital will set you back these days. The cost of this insurance is rising too, something Discovery Health CEO Jonathan Broomberg addressed recently.

The head of the 2.7-million-member scheme has laid blame at the feet of the members themselves, as well as at the feet of those in the medical profession. Here’s a summary of what he had to say to Fin24:

…medical aid contributions had increased at a pace 50% higher than the inflation rate between 2005 and 2014. In 2014, for instance, the inflation rate was 6.1%, but medical aid schemes (including Discovery Health) increased their premiums by at least 9%.

Broomberg said the premium increases were due to patients being admitted to private hospitals more often, costing medical schemes R46.4bn in 2014 alone…

Broomberg said that in some of the newer hospitals, doctors were direct shareholders and increasing admissions was in their interest.

However, he was reluctant to elaborate: “There are some financial relationships between hospitals and doctors, but our concern is that we only have anecdotal evidence on this. What we have seen is that when a new hospital opens in an area where there are already existing hospitals, admission rates usually increase overall in the region.”

He wasn’t done there either, with more below from City Press:

He insisted that price inflation on healthcare services and products was not the problem; rather, it was medical scheme members who overused services…

Broomberg said the increased use of medical services was driven by demand and supply.

“What we have seen is that young people drop out of medical schemes as soon as their parents stop paying for them. They return later when they are about to start a family, needing to claim more than they are contributing,” he said…

On the supply side, he said the schemes’ greatest concern was doctors admitting patients to hospital unnecessarily…

“We are finding an increasing pattern where young, recently qualified locum doctors are doing after-hours work in casualty and, typically, for anyone who arrives with anything even vaguely complex, the casualty officer will phone a specialist.

“The specialist then advises that the patient be admitted to be seen in the morning.”

Imagine that, young people having the cheek to only pay for their medical aid once they can afford it? I’m sure your bottom line is still looking rather cosy over there Discovery, excuse us if we don’t feel too sorry for you.

[sources:fin24,citypress]