Discovery prepaid doctor vouchers could bring more people into the private healthcare net

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Discovery's headquarters in Sandton (Boogertman and Partners)
Discovery's headquarters in Sandton (Boogertman and Partners)
  • Discovery Health has launched its prepaid healthcare offering, allowing people to buy vouchers for GP visits and medication for R300.
  • Anyone in South Africa can buy the voucher, even if they are not medical aid members.
  • The group plans to add prepaid pharmacy, clinic and online GP consultation vouchers in 2021. 

The administrator of the country's largest medical scheme, Discovery Health, has joined in on the prepaid healthcare cover movement started by Netcare in August.

The company announced on Monday that it has launched the Discovery Prepaid Health platform, which will allow not only people with medical aid, but anyone in South Africa who has internet or WhatsApp to buy vouchers to see a private doctor.

Discovery Health said this new product is designed to appeal to non-insured consumers of private healthcare. But it will also be relevant to many members who belong to medical schemes administered by Discovery Health who only have hospital plans with no day-to-day benefits.

The administrator is selling vouchers for R300 to see a dispensing general practitioner (GP) and get medicine included in that single fee. There is no limit to the number of vouchers one can buy, but the vouchers can only be used see GPs within the Discovery Prepaid Health network.

Discovery said the doctors can be found in the major metros within eight of the nine provinces and it will continue to expand this network as new GP practices are being added daily.

Broadening access to healthcare

"We are very excited about this platform. Discovery Prepaid Health broadens access to high-quality treatment and medicine for all people in South Africa," said Discovery Health CEO, Dr Ryan Noach.

Noach added that Discovery Health's vision was to make the purchase of healthcare services akin to buying prepaid airtime vouchers.

Noach added that while only 16% of South Africa's population has private medical aid, Discovery Health's research showed that up to 50% of the population chooses to access primary healthcare in the private sector. Yet, medical scheme membership in the country has been on a decline as unemployment increased over the past few years, even though Discovery Health Medical Scheme still grew its members to 2.78 million people in the year ended on 30 June.

Asief Mohamed, chief investment officer of Aeon Investment Management, said with two of the biggest healthcare players in the country – Discovery and Netcare – championing this prepaid route has the potential to bring more people within the private healthcare net as it does not require them to contribute monthly medical aid premiums.

Employer groups who don't offer medical aid benefits to their stuff will probably also find it a cheaper alternative to giving their employees some access to private healthcare, he said.

Mohamed added that the R300 price tag was "really competitive" because normal GP visits for medical scheme members who have hospital plans average R450 for consultation alone while Avior Capital Markets head of research, Warwick Bam put it around R430.

Bam said even within the medical scheme population, there is an "underserved" market that this product will come handy to; those who do not cover for a GP visits or medication.

How will this benefit Discovery Health

Bam said the administrator at the outset, the prepaid health platform is unlikely to generate profit for Discovery Health. But if the company sells the vouchers in large volumes and the platform becomes a formidable intermediary channel between doctors and patients, Discovery Health could start counting revenues brought in by this initiative.

"A typical challenge for new platforms in any industry is user adoption. I am unaware of Discovery’s exact business model for the platform, but revenue is probably based on a fixed fee per voucher, which could be very small," said Bam, before adding that Discovery has a unique advantage due to its existing client base and doctor networks.

Mohamed said while there may not be obvious immediate short-term revenue benefits for Discovery, one thing that prepaid healthcare will do for the company and for hospitals in general is that once people start seeing doctors outside of the state facilities, they may need to have procedures done. This could boost hospital utilisation rates.  

"Whether people go to a private hospital or public hospital, that's a different conversation. You may be forced to go to a state hospital but what this does is that in the longer-term, you may consider getting medical aid," he said.

Mohamed said while he thinks that this will likely be a long way off and will probably not create a lot of new medical aid members overnight; it does create a market of employers who are looking for on-demand for low-income workers and people who want to help family members access affordable primary healthcare on occasions when they fall sick.

Discovery Health plans to roll out three additional prepaid products in 2021 called pharmacy pack, pharmacy clinic + med as well as meds online GP + meds.

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