Annexures to the report on the analysis of REF shadow ... Equalisation Fund/Anne… · separate...

REF shadow returns 2007 18

Annexures to the report on the

analysis of REF shadow returns

2007

Contents

Annexure A: Changes introduced in Version 2.1 of the Entry & Verification Criteria

during 2007.......................................................................................19

Annexure B: Cluster analysis underlying the scheme-specific expected rates for

CDLs.................................................................................................20

Annexure C: Category definitions ..........................................................................32

Annexure D: DIN Score methodology ....................................................................33

Annexure E: REF submissions for 2007, the categorisation thereof, and the

potential financial impact of the REF .................................................38

Annexure F: Details on REF risk factors where schemes have reported significant

deviations from the expected.............................................................58

Annexure G: REF price by age curves and community rate analysis for

administrator groups ........................................................................ 78

Private Bag X34, HATFIELD, 0028 Hadefields Block E, 1267 Pretorius Street, HATFIELD


Annexure A: Changes introduced in Version 2.1 of t he Entry

& Verification Criteria during 2007

20 April 2007

Due to the findings of the REF pricing study that has recently been completed and comments received from the industry, a number of changes to Version 2 of these guidelines has become necessary. Certain technical omissions have also been corrected. Changes are made to the following areas14:

• The month in which a beneficiary is counted is now based on service date and not on payment date

• It is now specified that authorisation is the only source for ICD10 diagnosis codes

• CDLs occurring in beneficiaries under one year of age can no longer be counted. These cases must be reflected in the NON-column

• The admission date is to be used to determine when a maternity event is recorded

• The ATC code, B02BD06 (Von Willebrand factor and coagulation factor VIII in combination) has been added as proof of treatment for haemophilia

To effect the above, changes were made to the following sections:

a. Clarification of ambiguous wording:

Sections 3.9, 3.9.1, 3.15,

b. Definition of service date for maternity

Section 3.11:

c. The following sections have been altered to deal with the inclusion of all beneficiaries in the under one age-band in the NON column:

Sections 3.3 (A) , 3.6, 3.12, 3.13

d. The use of diagnoses obtained through authorisation is specified:

Sections 5.1, 5.3(A), 5.3.3, 5.4.3, 5.19

e. Clarification that service date must be used to define a beneficiary’s month for eligibility

Sections 5.4.4, 5.6, all the Boolean tables in Section 6,

f. Technical oversights

H02AB (Glucocorticoids) have been removed from the Boolean tables for Asthma, COPD, and Multiple sclerosis

Addition of the ATC code, B02BD06 (Von Willebrand factor and coagulation factor VIII in combination) for Haemophilia (Table 15 and ATC code descriptions in Section 7)

The cost hierarchy of the respective CDL’s are now presented in section 3.9.1. Note that the hierarchy for respiratory conditions has changed (Section 3.9.1.1)

14 This page is an excerpt from “Guidelines for the Identification of Beneficiaries with REF Risk Factors in Accordance with the REF Entry and Verificat ion Criteria, Version 2.1” , 20 April 2007. Available at: http://www.medicalschemes.com/publications/ZipPublications/Risk%20Equalisation%20Fund/Report_on_REF_Risk_Factors_Version_2_1.pdf


Annexure B: Cluster analysis underlying the scheme -specific

expected rates for CDLs

Contents

1 BACKGROUND.................................................................................................................... 21

2 INTRODUCTION TO CLUSTER ANALYSIS ....................................................................... 22

2.1 Clustering methods 23 2.1.1 Hierarchical Cluster Analysis................................................................................... 23 2.1.2 K-Means Cluster Analysis ....................................................................................... 23

2.2 Similarity of - and distance between clusters 24 2.2.1 Average ................................................................................................................... 24 2.2.2 Centroid ................................................................................................................... 24 2.2.3 Ward ........................................................................................................................ 24

2.3 Evaluation criteria applied in evaluating clustering models 25 2.3.1 Pseudo-F statistic .................................................................................................... 25 2.3.2 Cubic Clustering criterion ........................................................................................ 25 2.3.3 Approximate Overall R2 ........................................................................................... 25

3 APPLICATION OF CLUSTERING TECHNIQUES TO BENEFIT OPTIONS ....................... 25

3.1 The data 25 3.2 Clustering variables 26 3.3 The clustering model applied to the REF data 27 3.4 Results of the clustering 27 3.5 Conclusion 30

4 THE WAY FORWARD ......................................................................................................... 30

Figures

Figure 10: Chronic disease rates by administrator (2005 REF study) .....................................21 Figure 11: Asthma rates by administrator (2005 REF study) ...................................................22 Figure 13: Raw Asthma rates by cluster ..................................................................................29 Figure 14: Raw total CDL rates by cluster................................................................................29

Tables

Table 9: Descriptive statistics for each cluster .........................................................................28


1 Background

Figure 10 below is a graphic presentation of the number of chronic lives for each of

the four participating administrators in the 2005 REF Study15. From the graph, it is

clear that there are differences in the levels of chronic diseases between the four

administrators.

Figure 10: Chronic disease rates by administrator (2005 REF study)

Rate per 1,000 Lives REF Study 2005Chronic Lives

0.00

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DH MS OMHC MHGra Total

Given the differences in the number of chronic lives, it follows that there would be

differences in the actual reported rates for the different CDL conditions. Figure 11

shows Asthma rates by administrator.

15 “Methodology for the Determination of the Risk Equal isation Fund Contribution Table 2007 [Base 2005, Use 2007] RETAP R ecommendations Report No. 9 ”, available at: http://www.medicalschemes.com/publications/ZipPublications/Risk%20Equalisation%20Fund/RETAP_recommendation_2007.pdf


Figure 11: Asthma rates by administrator (2005 REF study)

REF Study 2005Asthma Rate per 1,000 Lives

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Within each administrator, there is variance in respect of the level of REF risk factors

between schemes and benefit options. The previous REF report indicated that the

industry average is an inappropriate benchmark for the analysis of REF returns.

(See section 2.1.3, page 2, in the main report). RETAP agreed to this approach and

supported the CMS to research alternative methods on clustering to group similar

benefit options together and calculate a rate table for each cluster consisting of a

group of similar benefit options. A scheme specific rate table could then be based on

the respective cluster rate tables.

2 Introduction to cluster analysis

Cluster analysis techniques encompass a number of different algorithms and

methods for grouping similar objects in categories. A general question facing

researchers in many areas of inquiry is how to organize data into meaningful

structures, that is, to develop taxonomies. Cluster analysis is an exploratory data

analysis tool, which aims at sorting objects into groups in such a manner that the

degree of association between two objects is maximal if they belong to the same

group and minimal otherwise.

With clustering, there is no dependant variable, unlike regression analysis or logistic

regression. Clustering, also known as unsupervised classification is classification

with an unknown target. That is, the class of each case is unknown. Furthermore,

the total number of classes is unknown. The aim is to segment the cases into disjoint

classes that are homogeneous with respect to the inputs.


2.1 Clustering methods

There are literally hundreds of different algorithms that could be used to form the

clusters. The choice of the algorithm and the choice of input variables can lead to

different cluster solutions. The most common subset of algorithms is Hierarchical

Cluster Analysis and Non-hierarchical (K-Means Cluster Analysis). This section

introduces the basic concepts.

2.1.1 Hierarchical Cluster Analysis

The hierarchical procedure either starts with one cluster containing all individuals

from which smaller clusters are formed by division, or starts with all individuals in

separate clusters, which are then united step by step.

2.1.2 K-Means Cluster Analysis

The K-Means algorithm is one of the most

commonly used clustering algorithms. The “K” in

its name refers to the fact that the algorithm looks

for a fixed number of clusters, which are defined

in terms of proximity of data points to each other.

Each observation is assigned to the nearest seed

(by Euclidean distance) to form a cluster. The

seeds are then replaced by the means of the

temporary clusters. The process continues until there are no further changes in the

cluster means.

The adjoining figure explains this for two variables, x1 and x2.

The steps are:

� Step 1: Select k observations randomly (seeds).

� Step 2: Assign all the remaining observations to the closest seed to form the

original clusters.

� Step 3: Calculate the centroids of the clusters. The centroids become the

seeds for the next iteration of the algorithm.

� Step 4: Re-assign observations to the closest seed (iterative process).


Euclidean Distance

2 21 1 2 1 2( ) ( )L U U V V= − + −

1 1( , )U V

2 2( , )U V

The process of assigning points to a cluster and then recalculating centroids

continues until the cluster boundaries stop changing. In practice, the K-Means

algorithm usually finds a set of stable clusters after a few dozen iterations.

2.2 Similarity of - and distance between clusters

Clustering methods depend on a measure of distance or similarity between points.

Distance measures are preferred for quantitative data, and similarity measures for

qualitative data.

Different distance metrics used in clustering can give different types of clusters. The

most widely used metric is Euclidean distance (L1 norm). The Euclidean distance

between two points is the length of the straight line that joins them. Clusters formed

using Euclidean distance tends to be spherical in nature.

One problem with Euclidean distances is that they

are greatly influenced by variables that have the

largest values (outliers). One way around this

problem is to standardise the variables.

The statistical software packages frequently use

the following three methods for calculating cluster

distance:

2.2.1 Average

The distance between two clusters is the average distance between pairs of

observations, one in each cluster.

2.2.2 Centroid

The distance between two clusters is the Euclidean distance between their centroids

or means.

2.2.3 Ward

Cluster membership is assessed by calculating the total sum of squared deviations

from the mean of a cluster.


2.3 Evaluation criteria applied in evaluating clust ering models

There is no perfect way to determine the number of clusters, however there is a

number of statistics than can be analysed to help with the process. These are the

Pseudo-F statistic, the Cubic Clustering Criteria (CCC) and the Approximate Overall

R-Squared.

2.3.1 Pseudo-F statistic

This measure is similar to R2, adjusted for the number of clusters. The larger

the number of clusters the smaller the Pseudo-F value.

2.3.2 Cubic Clustering criterion

A maximum CCC-value of larger than 2 indicates a meaningful cluster

analysis. Values of CCC between 0 and 2 should be interpreted carefully.

2.3.3 Approximate Overall R 2

Measure the between group deviance (variation) versus the overall deviance.

A value close to 1 is indicative of a good cluster structure. Increasing the

number of clusters will increase the value of R2.

The three can be used together to identify the number of clusters. The trend to look

for is where the Pseudo-F statistic and CCC peak and where the R-Squared tapers

off.

The objective of clustering is to minimize the variation within a cluster and to

maximize the distance between clusters.

3 Application of clustering techniques to benefit o ptions

3.1 The data

In order to perform a clustering, reliable and appropriate data is required. The most

suitable data is the 2005 REF Study16 dataset and the statutory returns data. The

16 “Methodology for the Determination of the Risk Equal isation Fund Contribution Table 2007 [Base 2005, Use 2007] RETAP R ecommendations Report No. 9 ”, available at:


2005 REF Study data includes prevalence and count data for 149 benefit options for

4,2 million lives. Only 102 of the 149 options were active in 2007. If the 2005 REF

Study was used to do the clustering, more than 200 options will not be classified.

The statutory returns data of 2007 were therefore used to do the clustering. The

outcome (clustering of each option) is then linked back to the 2005 REF Study data

to calculate the actual rate tables for each cluster.

The REF unit and RETAP considered the following variables in the clustering of the

benefit options:

� Average age of the beneficiaries

� Proportion of beneficiaries above 65 years (Assumed pensioner ratio)

� Dependant ratio (Beneficiaries/Members)

� Proportion female lives

� Gross contribution per beneficiary per month

� Risk contribution per beneficiary per month

� Gross claims cost per beneficiary per month

� Risk claim premium ratio

� Risk claims cost per beneficiary (Jan-Sep 2007)

� Proportion of beneficiaries per age band:

� Under 1, 1 to 4, 5 to 9 and subsequent five year bands up to 85, then

85 Plus

� Open: Open or restricted scheme

� Benefit design classification (used as dummy variables; 0/1 variables):

� High, Medium, Low, Hybrid, Capitation, Mixed

3.2 Clustering variables

The input variables were discussed at the REF steering committee at RETAP

technical committee meetings. Suggestions were made that CMS must include

income, ethnicity distribution, region, type of managed care contract, etc., but

unfortunately this data are not available at benefit option level.

In the initial discussions it was concluded that the risk claims cost per beneficiary

would be an important variable to describe the REF risk of a benefit option. The

http://www.medicalschemes.com/publications/ZipPublications/Risk%20Equalisation%20Fund/RETAP_recommendation_2007.pdf


problem with the risk claims cost per beneficiary is that it is incomplete for 2007 and it

is not cognisant to service provider arrangements (capitation, private versus

provincial hospitals, etc.) or other measures to effectively of manage the risk of a

benefit option or scheme.

It is advised that all rand amount variables and ratio amount variables be used with

caution in any risk classification model.

3.3 The clustering model applied to the REF data

In the evaluation of the Q1 and Q2 2007 data, REF Analysts applied the K-Means

clustering model based on only the risk claims cost pbpm for 2006. For the

evaluation of the full year’s 2007 REF data submissions, the REF unit used the

model as described below.

The identified list of variables was used in several different combinations (after

standardisation) in a number of different clustering models (Hierarchical, K-Means,

and multi-stage models) by the CMS and by external consultants.

Based on statistical performance, the best three cluster models were selected and

the rates for each model were calculated and graphed. (All the selected models had

three clusters.) The models were compared on the outcomes for each benefit option

(high, medium, and low). The results were disappointing in terms of a consensus

outcome. For 133 out of a possible 375 benefit options there was no consensus

between the three models.

The three models were then evaluated by looking at the shapes for each CDL. From

this visual analysis, the best clustering model was then selected. Scheme specific

feedback, benefit design and the previous clustering results (Quarters 1 and 2 2007)

were also taken into consideration in the final classification of each benefit option

(Consensus model).

3.4 Results of the clustering

The results for the consensus model are summarised in Table 9 below. The table

presents descriptive statistics for each cluster.

The high-risk cluster includes only 15 benefit options with a total of 97 926

beneficiaries. These are benefit options with “old and sick” beneficiaries with an

average age of 55,6 years, and a risk claims cost of R1 474.07 pbpm for 2007. The


high-risk cluster is also dominated by options with proportionally more females than

males and the options typically make are an operating loss.

The low-risk cluster includes 45 benefit options with a total of 1 316 715

beneficiaries. These benefit options generally have “young and healthy”

beneficiaries with an average age of 29,3 years and a risk claims cost of R406.19.

These options typically make an operating profit.

The medium cluster has 42 benefit options with a total of 1 883 714 beneficiaries.

The medium cluster lies between the high and the low cluster.

Table 9: Descriptive statistics for each cluster

Cluster N Variable Mean Std Dev Minimum Maximum Sum Beneficiaries 6 528 5 099 297 17 825

Average Age 55,63 11,69 39,54 76,37

Pensioner ratio 43,22 26,58 9,51 90,15

Female ratio 58,42 5,79 51,64 70,72

Dependant ratio 0,74 0,28 0,27 1,31

Claim premium ratio 107,49 15,44 82,57 134,04

Risk claims cost pbpm (2007)

1 474,07 378,94 791,00 2380,91

High 15


1 293,96 351,27 658,46 2 035,37

97 926

Beneficiaries 29 260 42 345 313,00 150 527,00

Average Age 29,28 2,97 23,32 34,24

Pensioner ratio 3,79 2,55 0,12 8,95

Female ratio 51,26 4,26 39,40 61,89




406,19 158,60 74,57 787,43

Low 45


399,81 266,16 47,51 1 740,86

1 316 715

Beneficiaries 44 850 102 495 184 449 100

Average Age 36,94 4,67 28,09 46,34

Pensioner ratio 12,14 5,92 3,41 24,96

Female ratio 52,57 3,05 46,19 58,44




800,82 194,83 276,72 1 218,25

Medium 42


721,62 270,04 226,20 1 940,98

1 883 714


Figure 12 and Figure 13 shows the Asthma and total CDL rates for each cluster

respectively, including the average rates found in the 2005 REF Study for

comparison.

Figure 12: Raw Asthma rates by cluster

Figure 13: Raw total CDL rates by cluster

From the graphs above and the descriptive statistics shown in Table 9 it is clear that

there are differences between the theoretical clusters in terms of the beneficiary

profiles and the rates.


3.5 Conclusion

The clustering results are disappointing insofar as clear-cut hard definitions for these

different clusters were not found. This does however occur frequently in cluster

analyses, since it is dependant on variable selection. A clustering approach is a

supportive rather than a definitive technique in the grouping of benefit options. There

is much overlapping between the clusters. (A certain benefit option was for example

classified as a low risk option, but it is on the “border” between the low and medium

clusters. If a different set of input variables is applied, it might be classified as a

medium risk option.) Clustering is an unsupervised approach and does not

necessarily yield a solution that is predictive of the most important impacting

variables.

There are differences between benefit options and schemes, but in order to

categorise a scheme correctly it is important for CMS to classify benefit options

correctly and to allow enough variation around the expected rates in the evaluation of

the REF submissions.

The clustering approach is an improvement on the “one size fits all” approach, but

continuous work will be done to improve on this technique and to evaluate

alternatives.

4 The way forward

A RETAP technical committee agreed that the consensus model is the “optimal”

model for the time being to evaluate the 2007 submissions, but that more research

needs to be done on the topic of classification of benefit options.

Several suggestions were made by RETAP and one of them was a Generalised

Linear Model (GLM) approach to classify the benefit options. Discovery Health and

Metropolitan Health Corporate offered their help in the identification of the best set of

variables at benefit option level to describe the risk of a benefit option.

The so-called best set of variables will be discussed at RETAP and the REF steering

committee. If necessary, CMS may in future adjust their statutory return specification

on data collection to gather the critical information that will enable CMS to classify a

benefit option more accurately in future.


Schemes are invited to give feedback to the CMS if they do not agree with the

clustering of their benefit options. Note that the classification was done in relation to

the risk of all the other benefit options in the industry. The classification results (high,

medium, and low) per benefit option are published in the individual scheme-specific

reports on the CMS website17.

17 The CMS statutory returns portal is available at: https://www.medicalschemes.com/Returns/login.aspx Note that a username and password is required to access scheme-specific information


Annexure C: Category definitions

Table 10: Full description of Category definitions

Category 18 Full description Group

3 L There are some concerns with the submission that needs to be addressed. The community rate may not be the correct values until all the concerns are addressed. Total CDL levels; or three of MAT, CMY, HYP, IHD, HIV, CC2. 2-3 SD; are on average 2 to 3 standard deviations below the scheme-specific expected rate, or; The CDL levels are even lower than above, but the office has collateral evidence that substantiates these low levels as a true reflection of the scheme's risk profile.

3 There are some concerns with the submission that needs to be addressed. The community rate may not be the correct values until all the concerns are addressed.

3 H There are some concerns with the submission that needs to be addressed. The community rate may not be the correct values until all the concerns are addressed. Total CDL levels; or three of MAT, CMY, HYP, IHD, HIV, CC2. 2-3 SD; are on average 2 to 3 standard deviations above the scheme-specific expected rate, or; The CDL levels are even higher than above, but the office has collateral evidence that substantiates these low levels as a true reflection of the scheme's risk profile.

Fai

r da

ta

4 Substantially more REF beneficiaries than SR.

5 No REF data, or many beneficiaries missing. Poo

r da

ta

6 LOW Total CDL / 3 LOW of MAT, CMY, HYP, IHD, HIV, CC2. No collateral evidence & >3 SD.

7 HIGH Total CDL / 3 HIGH of MAT, CMY, HYP, IHD, HIV, CC2. No collateral evidence & >3 SD.

CD

L de

finiti

ons

appl

ied

poor

ly

8 Maternity data unlikely.

9 Combinations of the above, or other serious errors in submitted data, including but not limited to poor correlation between REF & SR data, unrealistic risk factor reporting that could not be classified in accordance with the other 8 categories, duplicate data submissions.

Poo

r da

ta

18 Note that categories 1 and 2, which were previously used to and identify “good” datasets with minor and no concerns respectively, has been discontinued.


Annexure D: DIN Score methodology

Contents

1 BACKGROUND.................................................................................................................... 34

2 METHOD.............................................................................................................................. 35

2.1 Data items used 35

2.1.1 Degree of correlation between REF submissions and the statutory returns data in each age band......................................................................................................... 35

2.1.2 REF risk factors ....................................................................................................... 35

2.2 Method applied to calculate scores 35

2.2.1 Degree of correlation between REF submissions and the statutory returns data in each age band......................................................................................................... 35

2.2.2 REF risk factor scores ............................................................................................. 36


1 Background

Medical schemes submit risk factor data in the form of REF grids with age, chronic

diseases (CDLs), HIV, and maternity to the Council for Medical Schemes on a

quarterly basis for the purpose of the REF shadow process. REF grids allow

schemes to present their data in a consolidated format. For the accurate calculation

of the scheme and industry community rates, it is important that medical schemes

submit credible data. Despite the fact that a majority of scheme submit credible data,

there are a number of schemes that continue to submit data with many errors.

The office is continuously developing techniques for rapid evaluation of data

submitted by medical schemes. One of the techniques is the application of

“Deviation from the Industry Norm” (DIN) scores. The DIN scores use the principle

of “standard deviation” to quantify the difference between the expected and

submitted data. The DIN scores will allow analysts to flag schemes that require

detailed investigation. DIN scores range from zero to ten, with low scores (<3)

reflecting data with minor problems and ten (10) an indication of very bad data or no

data submitted at all. The risk factor data that are reported at rates that are

significantly lower or higher than expected will attract high DIN scores, indicating

suspicious data.

Deviation from the Industry Norm score is calculated for each scheme as an aid to

estimate the quality of data submitted. The scores are based on the scheme’s CDL

data deviations from the scheme specific expected CDL profile for that scheme and

the statutory returns data for the same period. The expected count of chronic

diseases, maternity, and HIV cases per thousand beneficiaries is published with the

REF Contribution Table on the CMS website. These rates are specific for high,

medium, or low risk benefit options (See Annexure B, page 20, for details on the

clustering of benefit options). These rate tables are used as a benchmark against

which DIN scores for the REF risk factors are calculated. The number of

beneficiaries in the REF grids is compared to the statutory returns data to measure,

by age band, the accuracy of the submitted data.


2 Method

2.1 Data items used

DIN scores are calculated for each of the following data items:

2.1.1 Degree of correlation between REF submissions and the statutory

returns data in each band

(a) Correlation between statutory returns data and the REF submissions by

age band and total beneficiaries

(b) Correlation between statutory returns data and the REF submissions in

the under 1 year age category.

(c) Correlation between statutory returns data and the REF submissions in

the age 85 plus age category

2.1.2 REF risk factors

(a) CDL (25, MAT and HIV) in line with known prevalence and age-profile

information

(b) Aggregate REF risk factors score

2.2 Method applied to calculate scores

2.2.1 Degree of correlation between REF submissions and the statutory

returns data in each age band

2.2.1.1 Total data submitted score

• Calculate percentage deviation of the proportion of each age band to total beneficiaries between REF and SR returns

o Abs((Age(REF Agei)/ Total(REF beneficiaries))/(Age(SR Agei)/ Total(SR

beneficiaries))*100 – 100)

• Calculate the cube root of the sum of percentage deviations for all age bands….......................................................................................(A)

• Calculate the cube root of the percentage deviation between the total beneficiaries of REF and SR returns

o (Abs(Total(REF beneficiaries)/Total(SR beneficiaries))*100 – 100))1/3…............(B)

• Data Submitted Score = (A + B)/2


2.2.1.2 Under 1 age band score

• Calculate percentage deviation of the proportion of under 1s to total beneficiaries between REF and SR returns

o Abs((Age(REF Under 1)/ Total(REF beneficiaries))/(Age(SR Under 1)/ Total(SR


• The “under 1” score is calculated by finding the cube root of the percent deviation of the proportion of under 1s to total beneficiaries between REF and SR returns (maximum score = 10)

2.2.1.3 85 plus age band score

• Calculate percentage deviation of the proportion of “85 plus” to total beneficiaries between REF and SR returns

o Abs((Age(REF 85 plus)/ Total(REF beneficiaries)) / (Age(SR 85 plus)/ Total(SR


• The “85 plus” score is calculated by finding the cube root of the percent deviation of the proportion of under 1s to total beneficiaries between REF and SR returns (maximum score = 10)

2.2.2 REF risk factor scores

2.2.2.1 CDL conditions score

Required fields/variables: Expected; Actual for each age band

• Use published expected count rate tables to calculate scheme specific expected count

• Calculate the standard deviation (SD) of the expected proportion of CDL events (e.g. ADS) per age band:

o SD = (square root((p*(1-p*))/n) where p*=(x+2)/(n+4) and x = “Expected CDL Agei”; n = “Beneficiaries Agei”

• Express the proportion SD as a numbers of lives with the CDL condition:

o SD x “Total Beneficiaries”

• Express the difference (absolute difference) between the Actual and Expected number of CDL events in terms of the number of standard deviations per age band, and transform into bins as shown below:

o (“Expected CDL Agei” - “Observed CDL Agei”) / (SD x “Total Beneficiaries”)

o Bins: 0 – 1: 1; >1 – 2: 2; >2 – 3: 3; >3 – 4: 4; >4 – 5: 5; >5 – 6: 6; >6 – 7: 7; >7 – 8: 8; >8 – 9: 9; >9: 10


• Multiply the binned values with the proportion of beneficiaries in each age band. The CDL DIN score is the sum these products in all the 19 age bands.

o DIN Score (per CDL) =

“binned value age under 1” x “beneficiaries age under 1”/”total scheme beneficiaries” + . . . + “binned value age 85 plus” x “beneficiaries age 85 plus”/”total scheme beneficiaries”

2.2.2.2 Aggregate REF risk factors DIN score

• The aggregate REF risk factor DIN score is calculated by computing the sum of the product for all REF risk factor (25 CDL, HIV, MAT) and the product of REF cost of the risk factor and proportion expected REF risk factor events:

o Aggregate DIN Score = “DINCDL 1” x “REF Cost CDL 1” x “Total Expected DINCDL 1”/”total scheme beneficiaries” + . . . + “DINCDL 25” x “REF Cost CDL 25” x “Total Expected DINCDL 25”/”total scheme beneficiaries” + “DINMAT” x “REF Cost MAT” x “Total Expected DINMAT”/”total scheme beneficiaries” +

“DINHIV” x “REF Cost HIV” x “Total Expected DINHIV”/”total

scheme beneficiaries”


Annexure E: REF submissions for 2007, the categori sation

thereof, and the potential financial impact of the REF

Contents

1 REF RETURNS SUBMITTED .............................................................................................. 39

2 ASSESSMENT OF SUBMITTED DATA .............................................................................. 41

3 EVALUATION OF REF SUBMISSIONS BY ADMINISTRATOR ......................................... 43

4 THE POTENTIAL FINANCIAL IMPACT OF REF ON MEDICAL SCHEMES ...................... 48

4.1 Introduction 48

4.2 Analysis of the financial impact 48

4.3 Sensitivity analysis 57

Figures

Figure 14: Percentage of schemes with “fair data”.................................................................................41 Figure 15: Percentage of schemes with “fair data” and “poorly applied CDL definitions”.......................42 Figure 16: Number of beneficiaries by payment band (December 2007)...............................................51 Figure 17: Number of beneficiaries by payment band (December 2007, Alternative payment intervals)52 Figure 18: Scheme risk base on the Full table (December 2007) ..........................................................53 Figure 19: Industry community rate: With and without exclusions..........................................................57

Tables

Table 11: REF and SR returns submitted for March 2007 ..................................................................... 39 Table 12: REF and SR returns submitted for June 2007 ....................................................................... 40 Table 13: REF and SR returns submitted for September 2007.............................................................. 40 Table 14: REF and SR returns submitted for December 2007............................................................... 41 Table 15: Number of schemes by category and month.......................................................................... 43 Table 16: Scheme categories by administrator (March 2007)................................................................ 44 Table 17: Scheme categories by administrator (June 2007).................................................................. 45 Table 18: Scheme categories by administrator (September 2007) ........................................................ 46 Table 19: Scheme categories by administrator (December 2007) ......................................................... 47 Table 20: Risk rates by month ............................................................................................................... 48 Table 21: Frequency distribution of the number of schemes versus the scheme risk in intervals .......... 49 Table 22: Frequency distribution of the number of beneficiaries versus the scheme risk in intervals .... 50 Table 23: Frequency distribution of the number of beneficiaries versus the scheme risk in intervals

(Alternative intervals) ............................................................................................................ 51 Table 24 Frequency distribution of the number of schemes versus the scheme risk in intervals

(Alternative payment intervals).............................................................................................. 52 Table 25: Scheme risk by category (December 2007) ........................................................................... 54 Table 26: Detailed list of scheme risks for December 2007 ................................................................... 55 Table 27: Number of schemes excluded per month............................................................................... 57 Table 28: Risk rates per month without Category 4, 5, 6, 7, 8, and 9 schemes ..................................... 57


1 REF returns submitted

Table 11 indicates that during March 2007 REF data for 120 schemes were included

in the analysis, representing 7 134 043 beneficiaries in the industry (99,35 percent of

the total number of beneficiaries reported in the statutory returns). See Annexure C

(page 32) for the definitions of the respective categories.

Table 11: REF and SR returns submitted for March 2 007

Beneficiaries in March 2007 Category Number of

Schemes Statutory Returns

Percentage of Total SR

Beneficiaries

REF grids Submitted

REF Beneficiaries

as % SR Beneficiaries

3 L 12 (10%) 577 031 8,04 575 911 99,80 3 70 (53,33%) 4 866 649 67,78 4 854 594 99,75 3 H 11 (9,17%) 676 586 9,42 676 738 100,02 4 - - - - - 5 2 (1,67%) 32 188 0,45 4 200 13,04 6 2 (1,67%) 292 007 4,07 291 332 99,76 7 4 (3,33%) 323 770 4,51 321 738 99,37 8 - - - - - 9 19 (15,63%) 412 171 5,74 409 530 99,35 Total 120 7 180 402 100,00% 7 134 043 99,35%

The following schemes are exempted from PMBs and were not included in the

analysis:

• Building and Construction Industry Medical Aid Fund • Fishing Industry Medical Scheme (Fish-Med) • Food Workers Medical Benefit Fund • Golden Arrows Employees Medical Benefit Fund

Gen-Health Medical Scheme is the only scheme that did not submit any REF data for

2007 and was classified as a Category 5 scheme (no data submitted, or there are

many beneficiaries missing on the REF submission) for every month. Gen-Health

Medical Scheme was included in the categorisation results, but not in any of the

other analysis.

Table 12 indicates that during June 2007, REF data for 120 schemes were included

in the analysis, representing 7 229 490 beneficiaries in the industry (99,55 percent of

the total number of beneficiaries reported in the statutory returns).


Table 12: REF and SR returns submitted for June 20 07

Beneficiaries in June 2007 Decision Category

Number of



Beneficiaries

REF grids Submitted

REF Beneficiaries


3 L 12 (10%) 684 676 9,43 683 828 99,87 3 62 (51,67%) 4 339 497 59,76 4 333 383 99,85 3 H 13 (10,83) 708 849 9,76 708 925 100,01 4 1 (0,83%) 24 519 0,34 26 936 109,85 5 3 (2,50%) 50 632 0,70 23 208 45,83 6 3 (2,50%) 158 383 2,18 157 539 99,46 7 5 (4,17%) 340 813 4,69 339 294 99,55 8 1 (0,83%) 184 863 2,55 185 202 100,18 9 20 (16,67%) 769 686 10,60 771 175 100,19 Total 120 7 261 918 100,00% 7 229 490 99,55

Table 13 indicates that during September 2007 REF data for 117 schemes were

included in the analysis, representing 7 312 659 beneficiaries in the industry (99,38

percent of the total number of beneficiaries reported in the statutory returns).

Table 13: REF and SR returns submitted for Septemb er 2007

Beneficiaries in September 2007 Decision Category

Number of



Beneficiaries

REF grids Submitted

REF Beneficiaries


3 L 9 (7,69%) 612 495 8,32 612 244 99,95 3 67 (57,26%) 3 946 152 53,63 3 938 434 99,80 3 H 13 (11,11%) 704 136 9,57 703 671 99,93 4 - - - - - 5 1 (0,85%) 25 493 0,35 - - 6 2 (1,71%) 156 915 2,13 155 478 99,08 7 2 (1,71%) 171 329 2,33 171 329 100,00 8 - - - - - 9 23 (19,66%) 1 741 160 23,66 1731 503 99,44 Total 117 7 357 680 100,00% 7 312 659 99,38

Table 14 below indicates that during December 2007 REF data for 117 schemes

were included in the analysis, representing 7 379 308 beneficiaries in the industry

(99,19 percent of the total number of beneficiaries reported in the statutory returns).


Table 14: REF and SR returns submitted for Decembe r 2007

Beneficiaries in December 2007 Decision Category

Number of



Beneficiaries

REF grids Submitted

REF Beneficiaries


3 L 8 (6,84%) 166 410 2,24 166 292 99,92 3 70 (59,83%) 5 200 896 69,91 5 189 004 99,77 3 H 15 (12,82%) 735 471 9,89 734 949 99,92 4 - - - - - 5 2 (1,71%) 48 985 0,66 22 537 46,00 6 1 (0,85%) 61 691 0,83 61 582 99,82 7 2 (1,71%) 170 459 2,29 170 444 99,99 8 - - - - - 9 19 (16,24%) 1 055 592 14,19 1 034 500 98,00 Total 117 7 439 504 100,00% 7 379 308 99,19

2 Assessment of submitted data

During the year, there was a slight improvement in the number of schemes grouped

as submitting “fair data” (Categories 3, 3 L, or 3 H). This trend is displayed in Figure

14. In January 76,67 percent of the schemes were assessed to have “fair data”.

This percentage went up to almost 80 percent in December. The slight improvement

may be the result of the feedback sessions that CMS had with some schemes.

Figure 14: Percentage of schemes with “fair data”

76.6

7

76.6

7

77.5

0

72.5

0

74.1

7

72.5

0

77.1

2

77.1

2

76.0

7

78.6

3

79.4

9

79.4

9

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Month

Per

cent

age

In Figure 15 Categories 6 and 7 included; the respective percentages increased with

approximately 2 to 3 percent per month above the results reported in Figure 14,

except for April where the percentage went up with 7,5 percent. The percentage of

fair data was generally lower for quarter 2 compared to the other quarters.


Figure 15: Percentage of schemes with “fair data” and “poorly applied CDL

definitions”

81.6

7

81.6

7

82.5

0

80.0

0

80.8

3

79.1

7

81.3

6

80.5

1

79.4

9

81.2

0

82.9

1

82.0

5

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Month

Per

cent

age


Table 15: Number of schemes by category and month

Period Category Frequency Row Pct Col Pct 3 L 3 3 H 4 5 6 7 8 9 Total

Jan-07 11 9,17 9,17

70 58,33

8,58

11 9,17 7,19

0 0,00 0,00

3 2,50

11,11

2 1,67 8,33

4 3,33 9,52

0 0,00 0,00

19 15,83

8,09

120

Feb-07 11 9,17 9,17

70 58,33

8,58

11 9,17 7,19

1 0,83

16,67

2 1,67 7,41

2 1,67 8,33

4 3,33 9,52

0 0,00 0,00

19 15,83

8,09

120

Mar-07 12 10,00 10,00

70 58,33

8,58

11 9,17 7,19

0 0,00 0,00

2 1,67 7,41

2 1,67 8,33

4 3,33 9,52

0 0,00 0,00

19 15,83

8,09

120

Apr-07 11 9,17 9,17

63 52,50

7,72

13 10,83

8,50

1 0,83

16,67

4 3,33

14,81

4 3,33

16,67

5 4,17

11,90

0 0,00 0,00

19 15,83

8,09

120

May-07 12 10,00 10,00

65 54,17

7,97

12 10,00

7,84

2 1,67

33,33

3 2,50

11,11

3 2,50

12,50

5 4,17

11,90

0 0,00 0,00

18 15,00

7,66

120

Jun-07 12 10,00 10,00

62 51,67

7,60

13 10,83

8,50

1 0,83

16,67

3 2,50

11,11

3 2,50

12,50

5 4,17

11,90

1 0,83

100,00

20 16,67

8,51

120

Jul-07 9 7,63 7,50

69 58,47

8,46

13 11,02

8,50

0 0,00 0,00

1 0,85 3,70

2 1,69 8,33

3 2,54 7,14

0 0,00 0,00

21 17,80

8,94

118

Aug-07 9 7,63 7,50

69 58,47

8,46

13 11,02

8,50

0 0,00 0,00

1 0,85 3,70

2 1,69 8,33

2 1,69 4,76

0 0,00 0,00

22 18,64

9,36

118

Sep-07 9 7,69 7,50

67 57,26

8,21

13 11,11

8,50

0 0,00 0,00

1 0,85 3,70

2 1,71 8,33

2 1,71 4,76

0 0,00 0,00

23 19,66

9,79

117

Oct-07 8 6,84 6,67

70 59,83

8,58

14 11,97

9,15

1 0,85

16,67

3 2,56

11,11

0 0,00 0,00

3 2,56 7,14

0 0,00 0,00

18 15,38

7,66

117

Nov-07 8 6,84 6,67

71 60,68

8,70

14 11,97

9,15

0 0,00 0,00

2 1,71 7,41

1 0,85 4,17

3 2,56 7,14

0 0,00 0,00

18 15,38

7,66

117

Dec-07 8 6,84 6,67

70 59,83

8,58

15 12,82

9,80

0 0,00 0,00

2 1,71 7,41

1 0,85 4,17

2 1,71 4,76

0 0,00 0,00

19 16,24

8,09

117

Total 120 816 153 6 27 24 42 1 235 1424

Between 18 (15.38%) and 23 (19,66%) schemes were classified as a Category 9

schemes. These submissions contain gross irregularities in more than one area (see

Annexure C on page 32 for category definitions).

3 Evaluation of REF submissions by administrator

The number of schemes per administrator is counted for each category and the

results are reported for the last month in each quarter in Table 16 to Table 19 on

pages 44 to 47.


Table 16: Scheme categories by administrator (Marc h 2007)

Administrator vs. Category Administrator Category

Frequency Row Pct 3 L 3 3 H 5 6 7 9 Total

ALLCARE ADMINISTRATORS (PTY) LTD 0 0,00

5 71,43

0 0,00

0 0,00

0 0,00

0 0,00

2 28,57

7

AMANZI HEALTH ADMINISTRATORS (PTY) LTD

0 0,00

1 50,00

0 0,00

0 0,00

0 0,00

1 50,00

0 0,00

2

DISCOVERY HEALTH (PTY) LTD 0 0,00

9 90,00

0 0,00

0 0,00

0 0,00

0 0,00

1 10,00

10

ETERNITY PRIVATE HEALTH FUND ADMINISTRATORS (PTY) LTD

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1

FULL CIRCLE HEALTH (PTY) LTD 0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

2 100,00

2

INGWE MED (PTY) LTD 0 0,00

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1

MEDSCHEME HOLDINGS (PTY) LTD 0 0,00

18 90,00

0 0,00

0 0,00

1 5,00

0 0,00

1 5,00

20

METROPOLITAN HEALTH CORPORATE (PTY) LTD

3 18,75

11 68,75

1 6,25

0 0,00

0 0,00

1 6,25

0 0,00

16

MPUMALANGA MANAGED HEALTH CARE (PTY) LTD

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1

MULTIMED HEALTHCARE ADMINISTRATORS (PTY) LTD

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

0 0,00

1

OLD MUTUAL HEALTHCARE (PTY) LTD 0 0,00

5 55,56

2 22,22

1 11,11

0 0,00

0 0,00

1 11,11

9

PPS MEDICAL SCHEME ADMINISTRATORS (PTY) LTD

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1

PRIVATE HEALTH ADMINISTRATORS 0 0,00

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1

PROSPERITY HEALTH MANAGERS (PTY) LTD

0 0,00

1 50,00

0 0,00

0 0,00

0 0,00

0 0,00

1 50,00

2

PROVIDENCE HEALTHCARE RISK MANAGERS (PTY) LTD

0 0,00

1 25,00

2 50,00

0 0,00

0 0,00

0 0,00

1 25,00

4

RESOLUTION ADMINISTRATORS (PTY) LTD

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1

ROWAN ANGEL (PTY) LTD 0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

0 0,00

0 0,00

1

SECHABA MEDICAL SOLUTIONS (PTY) LTD

0 0,00

1 50,00

0 0,00

1 50,00

0 0,00

0 0,00

0 0,00

2

SEKMED MEDICAL AID ADMINISTRATORS (PTY) LTD

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1

SELF-ADMINISTERED 1 6,25

5 31,25

3 18,75

0 0,00

0 0,00

1 6,25

6 37,50

16

SIGMA HEALTH FUND MANAGERS (PTY) LTD

0 0,00

0 0,00

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

1

MOMENTUM MEDICAL SCHEME ADMINISTRATORS (PTY) LTD

0 0,00

8 80,00

2 20,00

0 0,00

0 0,00

0 0,00

0 0,00

10

STATUS MEDICAL AID ADMINISTRATORS (PTY) LTD

4 50,00

3 37,50

0 0,00

0 0,00

0 0,00

0 0,00

1 12,50

8

THEBE YA BOPHELO HEALTHCARE ADMINISTRATORS (PTY) LTD

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1

V MEDICAL AID ADMINISTRATORS (PTY) LTD

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1

Total 12 70 11 2 2 4 19 120


Table 17: Scheme categories by administrator (June 2007)


Frequency Row Pct 3 L 3 3 H 4 5 6 7 8 9 Total

ALLCARE ADMINISTRATORS (PTY) LTD

0 0,00

4 57,14

0 0,00

1 14,29

0 0,00

0 0,00

0 0,00

0 0,00

2 28,57

7


0 0,00

1 50,00

0 0,00

0 0,00

0 0,00

0 0,00

1 50,00

0 0,00

0 0,00

2


9 81,82

0 0,00

0 0,00

1 9,09

0 0,00

0 0,00

0 0,00

1 9,09

11

ETERNITY PRIVATE HEALTH FUND ADMINISTRATORS (PTY)

LTD

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1

FULL CIRCLE HEALTH (PTY) LTD

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

2 100,00

2


1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1

MEDSCHEME HOLDINGS (PTY) LTD

1 5,00

17 85,00

1 5,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 5,00

20


3 18,75

11 68,75

1 6,25

0 0,00

0 0,00

0 0,00

1 6,25

0 0,00

0 0,00

16


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

0 0,00

0 0,00

1

OLD MUTUAL HEALTHCARE (PTY) LTD

0 0,00

4 44,44

3 33,33

0 0,00

0 0,00

1 11,11

0 0,00

0 0,00

1 11,11

9


1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1

PRIVATE HEALTH ADMINISTRATORS

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1


0 0,00

1 50,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 50,00

2


0 0,00

2 40,00

2 40,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 20,00

5


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

0 0,00

1


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

0 0,00

0 0,00

0 0,00

1


0 0,00

0 0,00

0 0,00

0 0,00

1 50,00

0 0,00

0 0,00

0 0,00

1 50,00

2


4 26,67

3 20,00

0 0,00

0 0,00

1 6,67

2 13,33

0 0,00

4 26,67

15


0 0,00

0 0,00

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1


0 0,00

6 60,00

2 20,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

2 20,00

10


4 50,00

2 25,00

0 0,00

0 0,00

1 12,50

0 0,00

0 0,00

0 0,00

1 12,50

8

THEBE YA BOPHELO HEALTHCARE

ADMINISTRATORS (PTY) LTD

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1


1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1

Total 12 62 13 1 3 3 5 1 20 120


Table 18: Scheme categories by administrator (Sept ember 2007)




4 57,14

0 0,00

0 0,00

0 0,00

0 0,00

3 42,86

7


0 0,00

1 50,00

1 50,00

0 0,00

0 0,00

0 0,00

0 0,00

2


9 90,00

0 0,00

0 0,00

0 0,00

0 0,00

1 10,00

10


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

2 100,00

2


1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1


15 78,95

2 10,53

0 0,00

0 0,00

0 0,00

2 10,53

19


3 18,75

11 68,75

1 6,25

0 0,00

0 0,00

1 6,25

0 0,00

16


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1


7 87,50

1 12,50

0 0,00

0 0,00

0 0,00

0 0,00

8


0 0,00

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1


0 0,00

1 50,00

0 0,00

0 0,00

0 0,00

0 0,00

1 50,00

2


0 0,00

2 40,00

2 40,00

0 0,00

0 0,00

0 0,00

1 20,00

5


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1


0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

0 0,00

0 0,00

1


0 0,00

0 0,00

0 0,00

1 50,00

0 0,00

0 0,00

1 50,00

2


3 20,00

3 20,00

0 0,00

1 6,67

1 6,67

6 40,00

15


0 0,00

0 0,00

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

1


0 0,00

8 80,00

2 20,00

0 0,00

0 0,00

0 0,00

0 0,00

10


3 37,50

4 50,00

0 0,00

0 0,00

0 0,00

0 0,00

1 12,50

8


1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1


1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1

Total 9 67 13 1 2 2 23 117


Table 19: Scheme categories by administrator (Dece mber 2007)




4 57,14

0 0,00

1 14,29

0 0,00

0 0,00

2 28,57

7


8 80,00

0 0,00

0 0,00

0 0,00

0 0,00

2 20,00

10


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1

HDS Medical (Pty) Ltd 0 0,00

1 50,00

1 50,00

0 0,00

0 0,00

0 0,00

0 0,00

2

HWH INTEGRATED RISK MANAGEMENT D/O TRIANGULAR HEALTH (PTY) LTD

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1


16 84,21

2 10,53

0 0,00

0 0,00

0 0,00

1 5,26

19


2 12,50

12 75,00

1 6,25

0 0,00

0 0,00

1 6,25

0 0,00

16


0 0,00

7 70,00

3 30,00

0 0,00

0 0,00

0 0,00

0 0,00

10


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1


6 75,00

2 25,00

0 0,00

0 0,00

0 0,00

0 0,00

8


0 0,00

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1


1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1


0 0,00

1 50,00

0 0,00

0 0,00

0 0,00

0 0,00

1 50,00

2


0 0,00

2 40,00

2 40,00

0 0,00

0 0,00

0 0,00

1 20,00

5


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1

RESOLUTION ADMINISTRATORS (PTY) LTD 0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1

SECHABA MEDICAL SOLUTIONS (PTY) LTD 0 0,00

1 50,00

0 0,00

1 50,00

0 0,00

0 0,00

0 0,00

2


6 37,50

3 18,75

0 0,00

1 6,25

1 6,25

4 25,00

16


0 0,00

0 0,00

1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

1


3 37,50

4 50,00

0 0,00

0 0,00

0 0,00

0 0,00

1 12,50

8


0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1 100,00

1


1 100,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

0 0,00

1

Total 8 70 15 2 1 2 19 117


4 The potential financial impact of REF on medical schemes

4.1 Introduction

The scheme’s risk (industry community rate – scheme community rate) was

calculated individually for each scheme for March, June, September, and December

based on the Full contribution table. Initially all the schemes were included in the

calculation of the industry community rate and then the Category 4, 5, 6, 7, 8 and 9

schemes were excluded in the analysis.

4.2 Analysis of the financial impact

One hundred and nineteen schemes were included in the analysis for March and

June, while one hundred and sixteen were included for September and December19.

Basic statistics are shown for each of the four months in Table 20. Contrary to the

deviation in 2006, the scheme risk was stable from quarter to quarter during 2007.

For March, the scheme risk varies from –R765,27 to R108,43. This means that if

these datasets are a true reflection of the respective schemes’ risk, the highest risk

scheme may receive R765,27 per beneficiary from REF and the lowest risk scheme

may pay R108,43 per beneficiary to REF. For December, the scheme risk ranges

from –R800,82 to R99,43.

Table 20: Risk rates by month

Full Contribution Table (Amount in rand)

Statistic

March 2007 June 2007 September 2007 December 2007 Industry community rate 258,74 259,25 257,99 260,36 Minimum risk rate -765,27 -775,43 -797,73 -800,82 Maximum risk rate 108,43 103,25 101,66 99,43 Standard deviation 104,01 105,95 105,10 105,78

Fifty schemes (43,1%) were net contributors in December 2007, but these fifty

schemes presents 5 336 889 (72,32%) beneficiaries.

19 Note that Gen-health medical scheme, although included in the categorisation, is excluded form all community rate analysis because they have not submitted any REF returns.


Table 21: Frequency distribution of the number of schemes versus the scheme risk in

intervals

March 2007 June 2007 September 2007 December 2007 Scheme risk Schemes % Schemes % Schemes % Schemes %

Pay: R0 to R25,00 pbpm

19 15,97 18 15,13 18 15,52

20 17,24

Pay: R25,01 to R50,00 pbpm

11 9,24 15 12,61 16 13,79

13 11,21


12 10,08 13 10,92 9 7,76 12 10,34


9 7,56 4 3,36 6 5,17 5 4,31

Pay: R100,01 to R125,00 pbpm

1 0,84 2 1,68 1 0,86 - -

Pay: R125,01 to R150,00 pbpm

- - - - - - - -

Pay: More than R150,00 pbpm

- - - - - - - -

Sub-total 52 43,7 52 43,7 50 43,1 50 43,1 Receive: R0,01 to R25,00 pbpm

18 15,13 16 13,45 19 16,38

14 12,07

Receive: R25,01 to R50,00 pbpm

17 14,29 14 11,76 14 12,07

16 13,79


7 5,88 8 6,72 8 6,90 14 12,07


7 5,88 11 9,24 8 6,90 3 2,59


5 4,20 5 4,20 7 6,03 8 6,90


6 5,04 5 4,20 2 1,72 3 2,59

Receive: More than R150,00 pbpm

7 5,88 8 6,72 8 6,90 8 6,90

Total 119 100 119 100 116 100 116 100


Table 22: Frequency distribution of the number of beneficiaries versus the scheme

risk in intervals

March 2007 June 2007 September 2007 December 2007 Scheme risk Beneficia

ries % Beneficia

ries % Beneficia

ries % Benefic

iaries %

Pay: R0 to R25,00 pbpm

3 176 370 44,52 3 051 197 42,20 2 515 244 34,40 3 162 727

42,86


320 231 4,49 402 298 5,56 1 064 807 14,56 507 513 6,88


953 040 13,36 1 529 068 21,15 1 326 965 18,15 1 566 839

21,23


680 951 9,55 118 388 1,64 193 828 2,65 99 810 1,35

Pay: R100,01 to R125,00 pbpm

17 799 0,25 34 433 0,48 95 504 1,31 - -

Pay: R125,01 to R150,00 pbpm

- - - - - - - -

Pay: More than R150,00 pbpm

- - - - - - - -

Sub-total net payers

5 148 391 72,17 5 135 384 71,03 5 196 348 71,06 5 336 889

72,32


839 637 11,77 818 415 11,32 973 484 13,31 848 566 11,50


272 565 3,82 331 082 4,58 256 324 3,51 291 692 3,95


158 574 2,22 167 524 2,32 180 319 2,47 305 138 4,14


153 871 2,16 228 851 3,17 222 392 3,04 74 462 1,01


103 952 1,46 95 197 1,32 73 403 1,00 103 388 1,40


58 943 0,83 89 635 1,24 52 534 0,72 64 680 0,88


398 110 5,58 363 402 5,03 357 855 4,89 354 493 4,80

Subtotal net recipients 1 985 652 27,83 2 094 106 28,97 2 116 311 28,94

2 042 419 27,68

Total 7 134 043 100 7 229 490 100 7 312 659 100

7 379 308 100

The financial impact by payment band on the beneficiaries is illustrated in Figure 16

(page 51) for December. Three hundred fifty four thousand and four hundred and

ninety three (4,8%) beneficiaries may receive R150,00 or more from REF and 99 810

(1,35%) may pay in between R75,00 and R100,00 pbpm. (Theoretically, more than

70% beneficiaries may be net payers into REF.)


Figure 16: Number of beneficiaries by payment band (December 2007)

Full table

0

500,000

1,000,000

1,500,0002,000,000

2,500,000

3,000,000

3,500,000

Pay

: Mor

e th

an R

150,

00P

BP

M

Pay

: R12

5,01

to R

150,

00P

BP

M

Pay

: R10

0,01

to R

125,

00P

BP

M

Pay

: R75

,01

to R

100,

00P

BP

M

Pay

: R50

,01

to R

75,0

0 P

BP

M

Pay

: R25

,01

to R

50,0

0 P

BP

M

Pay

: R0

to R

25,0

0 P

BP

M

Rec

eive

: R0,

01 to

R25

,00

PB

PM

Rec

eive

: R25

,01

to R

50,0

0P

BP

M

Rec

eive

: R50

,01

to R

75,0

0P

BP

M

Rec

eive

: R75

,01

to R

100,

00P

BP

M

Rec

eive

: R10

0,01

toR

125,

00 P

BP

M

Rec

eive

: R12

5,01

toR

150,

00 P

BP

M

Rec

eive

: Mor

e th

an R

150,

00P

BP

M

Num

ber

of b

enef

icia

ries

The payments are grouped differently for December in Table 23, Table 24 and Figure

17 below. If we assume that payments less than R5 are not significant, then we

could conclude that REF will have no or little effect on approximately 27 percent of

the beneficiaries in the industry. These 27 percent beneficiaries are in 5 different

schemes. Only 45,3 percent will then be net payers compared to the 72,32 percent

shown in Table 22.

Table 23: Frequency distribution of the number of beneficiaries versus the scheme

risk in intervals (Alternative intervals)

Scheme risk (December 2007)

Number of beneficiaries

Percent (%)

Cumulative number of

beneficiaries Cumulative percent (%)

Pay more than R75 pbpm 99 810 1,35 99 810 1,35 Pay between R40 and R75 pbpm 1 758 221 23,83 1 858 031 25,18 Pay between R5 and R40 pbpm 1 484 522 20,12 3 342 553 45,30 Paying or receiving less than R5 pbpm 1 994 336 27,03 5 336 889 72,32 Receive between R5 and R40 pbpm 1 088 601 14,75 6 425 490 87,07 Receive between R40 and R75 pbpm 356 795 4,84 6 782 285 91,91 Receive more than R75 pbpm 597 023 8,09 7 379 308 100,00


Figure 17: Number of beneficiaries by payment band (December 2007, Alternative

payment intervals)

Full table

9981

0

1758

221

1484

522 19

9433

6

1088

601

3567

95

5970

23

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Pay

mor

eth

an R

75,0

0P

BP

M

Pay

bet

wee

nR

40 a

ndR

75,0

0 P

BP

M

Pay

bet

wee

nR

5 an

d R

40P

BP

M

Pay

ing

orR

ecei

ving

less

than

R5

PB

PM

Rec

eive

betw

een

R5

and

R40

PB

PM

Rec

eive

betw

een

R40

and

R75

,00

PB

PM

Rec

eive

mor

eth

an R

75P

BP

M

Num

ber

of b

enef

icia

ries

Table 24 Frequency distribution of the number of s chemes versus the scheme risk in

intervals (Alternative payment intervals)

Scheme risk (December 2007

Number of schemes

Percent (%)

Cumulative number of schemes

Cumulative percent (%)

Pay more than R75 pbpm 5 4,31 5 4,31 Pay between R40 and R75 pbpm 15 12,93 20 17,24 Pay between R5 and R40 pbpm 25 21,55 45 38,79 Paying or receiving less than R5 pbpm 5 4,31 50 43,10 Receive between R5 and R40 pbpm 25 21,55 75 64,66 Receive between R40 and R75 pbpm 19 16,38 94 81,03 Receive more than R75 pbpm 22 18,97 116 100,00

Figure 18 below illustrates the variation in the scheme risk based on the full

contribution table for December 200720. Based on the submitted data there is one

scheme that will receive R800.82 per beneficiary for December 2007. This is a small

scheme with less than 5 000 beneficiaries and REF analysts classified it as Category

3. The maximum net payer for December 2007 (R99.43 per beneficiary) is a scheme

with between 10 000 and 30 000 beneficiaries and the scheme was classified as a

Category 3 scheme by REF analysts.

20 “CMS Approved contribution tables for 2007 ” http://www.medicalschemes.com/publications/ZipPublications/Risk%20Equalisation%20Fund/CMS%20Approved%20REF%20Contribution%20tables%20for%202007.xls


Figure 18: Scheme risk base on the Full table (Dec ember 2007)

Table 25 below shows the number of schemes per payment band and category for

December 2007. There is one Category 9 scheme that may receive more than

R150.00 per beneficiary. Category 9 data is inadequate, incomplete, or inappropriate

and in a live environment, such a submission will not be acceptable.


Table 25: Scheme risk by category (December 2007)

Scheme risk Category Frequency Row Pct Col Pct 3 L 3 3 H 5 6 7 9 Total

Pay: R0 to R25,00 pbpm 2 10,00 25,00

13 65,00 18,57

2 10,00 13,33

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

3 15,00 15,79

20

Pay: R25,01 to R50,00 pbpm 0 0,00 0,00

7 53,85 10,00

3 23,08 20,00

1 7,69

100,00

0 0,00 0,00

0 0,00 0,00

2 15,38 10,53

13

Pay: R50,01 to R75,00 pbpm 0 0,00 0,00

7 58,33 10,00

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

5 41,67 26,32

12

Pay: R75,01 to R100,00 pbpm 1 20,00 12,50

3 60,00

4,29

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

1 20,00

5,26

5

Receive: R0,01 to R25,00 pbpm 0 0,00 0,00

11 78,57 15,71

1 7,14 6,67

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

2 14,29 10,53

14


9 56,25 12,86

2 12,50 13,33

0 0,00 0,00

1 6,25

100,00

1 6,25

50,00

1 6,25 5,26

16

Receive: R50,01 to R75,00 pbpm 1 7,14

12,50

7 50,00 10,00

3 21,43 20,00

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

3 21,43 15,79

14


1 33,33

1,43

2 66,67 13,33

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

3


1 12,50 12,50

5 62,50

7,14

1 12,50

6,67

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

1 12,50

5,26

8


0 0,00 0,00

3 100,00

4,29

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

0 0,00 0,00

3


1 12,50 12,50

4 50,00

5,71

1 12,50

6,67

0 0,00 0,00

0 0,00 0,00

1 12,50 50,00

1 12,50

5,26

8

Total 8 70 15 1 1 2 19 116


Table 26: Detailed list of scheme risks for Decemb er 2007

Scheme Category Number of beneficiaries Scheme risk ( Rand) 1 3 < 5 000 -800,8 2 3 L < 5 000 -374,5 3 3 < 5 000 -297,0 4 3 H 100 000 or more -205,1 5 9 < 5 000 -195,5 6 7 100 000 or more -186,7 7 3 5 000 - 10 000 -173,6 8 3 5 000 - 10 000 -157,6 9 3 30 000 - 60 000 -142,7

10 3 5 000 - 10 000 -141,1 11 3 10 000 - 30 000 -125,9 12 3 < 5 000 -124,5 13 3 < 5 000 -123,0 14 3 L 10 000 - 30 000 -114,7 15 3 10 000 - 30 000 -111,5 16 3 H 10 000 - 30 000 -105,2 17 3 5 000 - 10 000 -104,0 18 3 < 5 000 -103,5 19 9 10 000 - 30 000 -100,3 20 3 H 30 000 - 60 000 -94,65 21 3 < 5 000 -86,37 22 3 H 10 000 - 30 000 -82,01 23 9 60 000 - 100 000 -72,99 24 3 H 10 000 - 30 000 -70,35 25 9 < 5 000 -70,18 26 3 5 000 - 10 000 -69,31 27 9 10 000 - 30 000 -68,13 28 3 < 5 000 -67,95 29 3 10 000 - 30 000 -66,37 30 3 5 000 - 10 000 -64,29 31 3 H 60 000 - 100 000 -63,77 32 3 < 5 000 -62,48 33 3 H 10 000 - 30 000 -59,64 34 3 5 000 - 10 000 -56,93 35 3 L 10 000 - 30 000 -52,71 36 3 < 5 000 -50,27 37 7 10 000 - 30 000 -45,50 38 3 H 10 000 - 30 000 -44,25 39 3 L 10 000 - 30 000 -44,12 40 3 < 5 000 -42,56 41 3 5 000 - 10 000 -40,72 42 3 5 000 - 10 000 -35,66 43 3 H 5 000 - 10 000 -35,40 44 3 < 5 000 -35,30 45 3 < 5 000 -34,89 46 3 5 000 - 10 000 -33,02 47 3 10 000 - 30 000 -32,35 48 3 60 000 - 100 000 -31,52 49 3 5 000 - 10 000 -31,31 50 9 10 000 - 30 000 -31,25 51 6 60 000 - 100 000 -28,49 52 3 L 30 000 - 60 000 -27,72 53 9 10 000 - 30 000 -20,21 54 3 100 000 or more -20,05 55 3 30 000 - 60 000 -19,61 56 3 5 000 - 10 000 -17,75 57 3 100 000 or more -17,37 58 3 5 000 - 10 000 -16,54 59 3 30 000 - 60 000 -15,73 60 3 10 000 - 30 000 -14,90


Scheme Category Number of beneficiaries Scheme risk ( Rand) 61 3 60 000 - 100 000 -14,36 62 3 10 000 - 30 000 -10,95 63 3 < 5 000 -10,80 64 9 30 000 - 60 000 -10,29 65 3 H 100 000 or more -9,57 66 3 10 000 - 30 000 -7,34 67 3 5 000 - 10 000 0,00

Net payers to REF 68 3 H 60 000 - 100 000 0,93 69 3 < 5 000 2,07 70 3 100 000 or more 2,17 71 3 10 000 - 30 000 4,97 72 9 60 000 - 100 000 6,31 73 3 100 000 or more 7,70 74 3 H 5 000 - 10 000 8,77 75 3 30 000 - 60 000 9,24 76 3 L 10 000 - 30 000 9,78 77 3 10 000 - 30 000 11,12 78 3 10 000 - 30 000 11,51 79 3 L 5 000 - 10 000 12,68 80 3 < 5 000 14,70 81 9 < 5 000 16,65 82 3 < 5 000 17,24 83 3 100 000 or more 17,53 84 3 10 000 - 30 000 20,71 85 3 100 000 or more 20,75 86 9 30 000 - 60 000 24,63 87 3 10 000 - 30 000 26,35 88 3 H 30 000 - 60 000 28,49 89 3 H 10 000 - 30 000 28,54 90 3 30 000 - 60 000 34,04 91 3 10 000 - 30 000 34,73 92 3 10 000 - 30 000 36,46 93 5 10 000 - 30 000 37,13 94 3 100 000 or more 38,45 95 3 10 000 - 30 000 39,18 96 3 H < 5 000 39,91 97 9 100 000 or more 42,34 98 9 10 000 - 30 000 45,97 99 3 < 5 000 46,29

100 3 100 000 or more 50,68 101 9 10 000 - 30 000 52,96 102 9 60 000 - 100 000 53,87 103 3 5 000 - 10 000 55,07 104 3 100 000 or more 56,03 105 3 60 000 - 100 000 60,06 106 9 100 000 or more 60,34 107 3 10 000 - 30 000 62,22 108 3 < 5 000 72,02 109 3 < 5 000 72,45 110 9 100 000 or more 72,51 111 9 60 000 - 100 000 74,56 112 3 10 000 - 30 000 75,17 113 3 L 10 000 - 30 000 76,91 114 3 5 000 - 10 000 92,91 115 9 10 000 - 30 000 95,48 116 3 10 000 - 30 000 99,43

(-) Negative scheme risk: Receive from REF (+) Positive scheme risk: Pay to REF


4.3 Sensitivity analysis

Schemes in Categories 4, 5, 6, 7, 8, and 9 are regarded as having sufficiently bad

data to warrant an audit. In this section Categories 4, 5, 6, 7, 8, and 9 are excluded

and the industry community rate is calculated on the remaining schemes. The

number of exclusions is shown in Table 27.

Table 27: Number of schemes excluded per month

Category March 2007 June 2007 September 2007 Decembe r 2007 4 0 1 0 0 5 2 3 1 2 6 2 3 2 1 7 4 5 2 2 8 0 1 0 0 9 19 20 23 19 Total number of schemes excluded in the analysis 27 33 28 24 Total number schemes left in the analysis 93 87 89 93

Table 28: Risk rates per month without Category 4, 5, 6, 7, 8, and 9 schemes

Full Contribution Table (Amount in rand)

Statistic

March 2007 June 2007 September 2007

December 2007

Industry community rate 255,51 259,01 262,22 260,51 Minimum risk rate -768,50 -775,66 -793,50 -800,67 Maximum risk rate 105,20 103,02 102,89 99,58 Standard deviation 111,00 114,01 113,13 111,23

The differences in the industry community rate can be seen in Figure 19.

Figure 19: Industry community rate: With and witho ut exclusions

252

254

256

258

260

262

264

(R)

Mar

-07

Jun-

07

Sep

-07

Dec

-07

Comparison of Industry community rates

All schemes

Exclusions

Note that “Exclusions” refers to the rate after schemes with poor data have been excluded from the analysis


Annexure F: Details on REF risk factors where sche mes have

reported significant deviations from the expected

Contents

1 INTRODUCTION.................................................................................................................. 60

2 REF RISK FACTORS WITH NUMERICAL OR FINANCIALLY SIGNIFICANT DEVIATIONS FROM EXPECTED LEVELS................................................................................................ 62

2.1 Addison’s Disease (ADS) 62

2.2 Asthma (AST) 63

2.3 Bipolar Mood Disorder (BMD) 65

2.4 Chronic Obstructive Pulmonary Disease (COP) 67

2.5 Diabetes Mellitus Type 2 (DM2) 68

2.6 Hypertension (HYP) 69

2.7 Three simultaneous conditions (CC3) 71

2.8 Four or more simultaneous conditions (CC4) 72

2.9 Total reported CDL conditions 73

2.10 Total multiple conditions 75

2.11 Maternity (MAT) 76

3 CONCLUDING REMARKS ON RISK FACTORS DEVIATING FROM THE EXPECTED ... 77


Figures

Figure 20: Expected and reported number of ADS cases by age (December 2007) .............................62 Figure 21: Expected and reported ADS rates by month.........................................................................62 Figure 22: Expected and reported ADS rates by large administrators (December 2007) ......................63 Figure 23: Expected and reported number of AST cases by age (December 2007)..............................63 Figure 24: Expected and reported AST rates by month .........................................................................64 Figure 25: Expected and reported respiratory conditions rate by month................................................64 Figure 26: Expected and reported AST rates by large administrators (December 2007).......................65 Figure 27: Expected and reported number of BMD cases by age (December 2007).............................66 Figure 28: Expected and reported BMD rates by month ........................................................................66 Figure 29: Expected and reported BMD rates by large administrators (December 2007)......................66 Figure 30: Expected and reported number of COP cases by age (December 2007).............................67 Figure 31: Expected and reported COP rates by month ........................................................................67 Figure 32: Expected and reported COP rates by large administrators (December 2007) ......................68 Figure 33: Expected and reported number of DM2 cases by age (December 2007) .............................68 Figure 34: Expected and reported DM2 rates by month ........................................................................69 Figure 35: Expected and reported DM2 rates by large administrators (December 2007) ......................69 Figure 36: Expected and reported number of HYP cases by age (December 2007) .............................70 Figure 37: Expected and reported HYP rates by month.........................................................................70 Figure 38: Expected and reported HYP rates by large administrators (December 2007) ......................70 Figure 39: Expected and reported number of CC3 cases by age (December 2007)..............................71 Figure 40: Expected and reported CC3 rates by month.........................................................................71 Figure 41: Expected and reported CC3 rates by large administrators (December 2007).......................72 Figure 42: Expected and reported number of CC4 cases by age (December 2007)..............................72 Figure 43: Expected and reported CC4 rates by month.........................................................................73 Figure 44: Expected and reported CC4 rates by large administrators (December 2007).......................73 Figure 45: Expected and reported number of total CDL cases by age (December 2007)......................74 Figure 46: Expected and reported total CDL rates by month .................................................................74 Figure 47: Expected and reported total CDL rates by large administrators (December 2007)...............74 Figure 48: Expected and reported number of multiple CDL cases by age (December 2007) ................75 Figure 49: Expected and reported multiple CDL rates by month............................................................75 Figure 50: Expected and reported total multiple CDL rates by large administrators (December 2007)..76 Figure 51: Expected and reported number of MAT cases by age (December 2007) .............................76 Figure 52: Expected and reported MAT rates by month ........................................................................77 Figure 53: Expected and reported MAT rates by large administrators (December 2007) ......................77

Tables

Table 29: Financial impact of the deviation from expected levels for REF risk factors................................................................................................................................................................ 61


1 Introduction

Table 29 on page 61 indicates the magnitude whereby the expected cost of the respective

risk factors differs from the amount calculated based on the number of cases reported in REF

submissions (Column 2: “Diff (A-E)). Instances where this difference exceeds the total

expected cost of these risk factors (R 1 911 787 572) by 0,5% are highlighted in red.

Similarly, where the reported amount is more than 0,5% of the total expected cost, cells are

highlighted in blue. The second column indicates the deviation form the expected for each

specific condition, and where this deviation exceeds 40%, the cells are highlighted.


Table 29: Financial impact of the deviation from ex pected levels for REF risk factors

Amount from REF by condition Dec-2007

Diff (A-E) % (A/E) Expected Actual

Addison's Disease 138 847 243,7% 96 607 235 454

Asthma -10 509 869 79,6% 51 567 082 41 057 213

Bronchiectasis -65 692 75,5% 268 385 202 693

Bipolar Mood Disorder 5 630 118 196,8% 5 814 173 11 444 291

Cardiac failure 21 768 - 21 768

Cardiomyopathy -8 807 857 84,6% 57 209 850 48 401 993

CHF&CMY -8 786 089 84,6% 57 209 850 48 423 761

Chronic Obs. Pulmonary Disease -14 322 608 58,5% 34 549 669 20 227 060

Chronic Renal Disease -1 086 762 96,4% 30 333 500 29 246 739

Crohn's Disease -88 047 95,3% 1 862 661 1 774 614

Diabetes Insipidus 389 100,4% 88 875 89 265

Diabetes Mellitus 1 3 096 763 110,2% 30 306 107 33 402 870

Diabetes Mellitus 2 17 678 405 130,8% 57 323 952 75 002 357

Dysrhythmias 3 628 986 137,0% 9 813 438 13 442 424

Epilepsy 854 113 103,9% 22 076 396 22 930 509

Glaucoma 512 084 108,6% 5 929 888 6 441 972

Haemophilia 44 519 104,1% 1 082 867 1 127 386

Hyperlipidaemia 8 602 064 113,0% 66 160 850 74 762 914

Hypertension 9 962 760 107,3% 137 149 597 147 112 357

Ulcerative Colitis 78 406 106,1% 1 295 090 1 373 495

Coronary Artery Disease 1 919 775 103,4% 55 814 949 57 734 724

Multiple Sclerosis 2 805 589 132,4% 8 653 019 11 458 608

Parkinson's Disease 1 045 794 118,9% 5 542 999 6 588 794

Rheumatoid Arthritis -2 052 188 79,9% 10 184 568 8 132 381

Schizophrenia 510 741 131,6% 1 614 650 2 125 391

Systemic LE -102 188 94,6% 1 896 433 1 794 245

Hypothyroidism 11 630 100,1% 11 775 675 11 787 305

HIV/AIDS -7 263 302 87,3% 56 995 974 49 732 672

Two simultaneous conditions 6 400 140 117,2% 37 211 292 43 611 432

Three simultaneous conditions 11 326 441 149,2% 23 031 082 34 357 524

Four or more simultaneous conditions 5 374 928 187,3% 6 155 483 11 530 412

Maternity Events -8 648 261 94,3% 150 528 712 141 880 451

Total CDL conditions 19 507 541 103,2% 608 411 280 627 918 821

Multiple CDL conditions 23 101 509 134,8% 66 397 857 89 499 367

Total 9 506 564 100,5% 1 911 787 572 1 921 294 136

Sections 2 to 2.10 on pages 62 to 75 contain more details for the deviations highlighted in Table 29.


2 REF risk factors with numerical or financially si gnificant

deviations from expected levels

2.1 Addison’s Disease (ADS)

Due to the low value assigned to ADS in the REF weighting table, ADS has a

financially negligible impact (R138 847, or 0,007% of the total PMB cost) on the

industry estimates, the reported cases in December 2007 appear to be unrealistically

high (Figure 20). This deviation is ascribed to the fact that self-administered

schemes reported 486 cases while only 26 were expected (1 325,5% of the

expected)

Figure 21 indicates that this problem occurred in April, October, and November.

Figure 22 Indicates that the major administrators reported numbers in line with the

expected rates.

Figure 20: Expected and reported number of ADS cas es by age (December 2007)

0

10

20

30

40

50

60

70

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Num

ber o

f Ben

efic

iarie

s

Addisons Disease Actual reported in REF submissions Expected based on 2005 REF Study rates

Figure 21: Expected and reported ADS rates by mont h

Addison's Disease

0.0

0.0

0.0

0.1

0.1

0.1

0.1

0.1

0.2

0.2

Rat

e pe

r 1,

000

Ben

efic

iarie

s

Actual Expected

Actual 0.030 0.030 0.032 0.042 0.028 0.030 0.028 0.028 0.028 0.100 0.161 0.090

Expected 0.031 0.031 0.031 0.031 0.031 0.031 0.031 0.031 0.031 0.031 0.030 0.030

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007


Figure 22: Expected and reported ADS rates by larg e administrators (December 2007)

0.0

0.1

0.1

0.2

0.2

0.3

0.3

Und

er 1 1-

4

5-9

10-

14

15-

19

20-

24

25-

29

30-

34

35-

39

40-

44

45-

49

50-

54

55-

59

60-

64

65-

69

70-

74

75-

79

80-

84

85+

Rat

e p

er 1

,000

ben

efic

iarie

s

Addisons Disease DISCOVERY HEALTH (PTY) LTD

MEDSCHEME HOLDINGS (PTY) LTD METROPOLITAN HEALTH CORPORATE (PTY) LTD

OLD MUTUAL HEALTHCARE (PTY) LTD Expected based on 2005 REF study

2.2 Asthma (AST)

Figure 23 indicates that Asthma rates were reported at much lower than expected

levels, and that the levels are particularly low in age-bands below 55 years. Figure

24 shows that, apart from being slightly higher during the winter months, AST is

reported at consistently low levels. Figure 25 indicates that there does not appear to

be a definition problem therein that other respiratory conditions are reported at

similarly low levels.

Figure 23: Expected and reported number of AST cas es by age (December 2007)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Und

er 1

1-4

5-9

10-

14

15-

19

20-

24

25-

29

30-

34

35-

39

40-

44

45-

49

50-

54

55-

59

60-

64

65-

69

70-

74

75-

79

80-

84 85+

Num

ber

of B

enef

icia

ries

Asthma Actual reported in REF submissions Expected based on 2005 REF Study rates


Figure 24: Expected and reported AST rates by mont h

Asthma

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Rat

e pe

r 1,

000

Ben

efic

iarie

s

Actual Expected

Actual 11.120 11.302 11.307 11.525 11.728 11.931 11.632 11.690 11.471 11.321 11.246 10.856

Expected 14.758 14.733 14.713 14.693 14.670 14.658 14.627 14.603 14.585 14.570 14.482 14.465

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Figure 25: Expected and reported respiratory condi tions rate by month

Combined expected and reported rates for respirator y conditions

0

2

4

6

8

10

12

14

16

18

20

Jan-

2007

Feb

-20

07

Ma

r-20

07

Ap

r-20

07

Ma

y-20

07

Jun-

2007

Jul-2

007

Au

g-20

07

Sep

-20

07

Oct

-20

07

No

v-20

07

De

c-20

07

Rat

e pe

r 1,

000

Be

nefic

iarie

s

BCE 0.048 0.059 0.057 0.058 0.060 0.056 0.040 0.033 0.031 0.033 0.033 0.033

AST 11.233 11.691 11.784 11.893 12.670 12.475 11.618 11.760 11.064 11.650 11.425 10.101

COP 1.675 1.803 1.826 1.981 1.987 1.953 1.877 1.779 1.842 1.915 1.895 1.829

Expected 19.010 18.975 18.953 18.962 18.941 18.898 18.842 18.786 18.793 18.770 18.682 18.656

Jan-2007 Feb-2007 Mar-2007 Apr-2007 May-2007 Jun-2007 Jul-2007 Aug-2007 Sep-2007 Oct-2007 Nov-2007 Dec-2007

Figure 26 indicates that schemes have reported AST at lower than expected for all

age levels, with the exception that Metropolitan Health Corporate administered

schemes have reported much higher than expected levels in age bands above 60

years. This higher than expected levels by Metropolitan Health Corporate schemes

in older age bands is observed for many other CDLs, including Diabetes Mellitus type

2, Hypertension, Three multiple conditions, Four or more multiple conditions, total

CDLs and total multiple CDLs.


Figure 26: Expected and reported AST rates by larg e administrators (December 2007)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

Und

er 1

1-4

5-9

10-

14

15-

19

20-

24

25-

29

30-

34

35-

39

40-

44

45-

49

50-

54

55-

59

60-

64

65-

69

70-

74

75-

79

80-

84 85+

Rat

e pe

r 1,0

00 b

ene

ficia

ries

Asthma DISCOVERY HEALTH (PTY) LTD



2.3 Bipolar Mood Disorder (BMD)

Table 29 (page 61) states that the estimate cost of BMD to the industry is R5.6M

higher than expected, representing a rate that is 96,8% higher than expected. Figure

27 shows that reported BMD rates are much higher than expected, starting at a

young age. Figure 28 indicates that there is an increasing trend for this condition

while Figure 29 shows that Medscheme administered schemes have reported rates

close to the expected levels, while schemes administered by the other administrators

have reported very high levels. Discovery (Pty) Ltd administered schemes have

reported the highest levels, particularly so in the younger age bands. RETAP has

discussed these higher than expected levels of BMD and has noted that the high

levels may be a true reflection of the true risk that schemes face for this risk factor.

Guidelines for the treatment of BMD have recently changed and there is a strong

view that BMD, like other mental health conditions, are generally underfunded.

Providers might therefore up-code mood-disorders, which may not necessarily be

PMBs as BMD to get access to PMB benefits.


Figure 27: Expected and reported number of BMD cas es by age (December 2007)

0

200

400

600

800

1,000

1,200

1,400

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Num

ber

of B

enef

icia

ries

Bipolar Mood Disorder Actual reported in REF submissions Expected based on 2005 REF Study rates

Figure 28: Expected and reported BMD rates by mont h

Bipolar Mood Disorder

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Rat

e pe

r 1,

000

Ben

efic

iarie

s

Actual Expected

Actual 0.848 0.861 0.888 0.929 0.955 0.990 0.977 1.015 1.042 1.075 1.104 1.119

Expected 0.574 0.573 0.572 0.571 0.570 0.569 0.568 0.567 0.566 0.567 0.562 0.561

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Figure 29: Expected and reported BMD rates by larg e administrators (December 2007)

0.0

0.5

1.0

1.5

2.0

2.5

Un

der

1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Rat

e p

er 1

,000

ben

efic

iarie

s

Bipolar Mood Disorder DISCOVERY HEALTH (PTY) LTD




2.4 Chronic Obstructive Pulmonary Disease (COP)

Similar to AST, Table 29 (page 61) shows that COP was reported at only 59% of the

expected levels. Figure 30 shows that this is true for all age bands; Figure 31

indicates that this was at slightly higher levels during April, May and June – which

may represent seasonal variation. Figure 32 shows that Medscheme, followed by

Discovery, reported levels approaching the expected levels. Metropolitan has

reported the lowest levels of COP of the four big administrators.

Figure 30: Expected and reported number of COP cas es by age (December 2007)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Num

ber o

f Ben

efic

iarie

s

Chronic Obs. Pulmonary Disease Actual reported in REF submissions Expected based on 2005 REF Study rates

Figure 31: Expected and reported COP rates by mont h

Chronic Obstructive Pulmonary Disease

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Rat

e pe

r 1,

000

Ben

efic

iarie

s

Actual Expected

Actual 1.628 1.642 1.626 1.693 1.669 1.657 1.577 1.552 1.537 1.530 1.517 1.486

Expected 2.769 2.748 2.736 2.731 2.714 2.705 2.691 2.674 2.664 2.658 2.608 2.601

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007


Figure 32: Expected and reported COP rates by larg e administrators (December 2007)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

Un

der

1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Rat

e p

er 1

,000

ben

efic

iari

es

Chronic Obs. Pulmonary Disease DISCOVERY HEALTH (PTY) LTD



2.5 Diabetes Mellitus Type 2 (DM2)

Figure 33: Expected and reported number of DM2 cas es by age (December 2007)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Und

er 1

1-4

5-9

10-

14

15-

19

20-

24

25-

29

30-

34

35-

39

40-

44

45-

49

50-

54

55-

59

60-

64

65-

69

70-

74

75-

79

80-

84 85+

Nu

mbe

r of B

ene

ficia

ries

Diabetes Mellitus 2 Actual reported in REF submissions Expected based on 2005 REF Study rates

DM2 has been reported at 30% above the expected levels, representing R17,7M

above the expected REF risk factor costs (Table 29, page 61). Figure 33 shows that

DM2 was reported at much higher than expected levels in all age-bands, Figure 34

shows that whereas the reported level during the first quarter was only slightly above

the expected levels, a gradual increase occurred during the second quarter and

persistent high levels were reported during the rest of the year. RETAP has

previously postulated that the delay in the uptake of chronic benefits at the beginning

of the year may be responsible for the “spoon shape” of this trend. Figure 35 shows

that, apart from Discovery in age bands below 54, schemes administered by the

other administrators reported higher than expected DM2 levels. Metropolitan Health

Corporate administered schemes reported levels approaching 200% of the expected

in some age bands. RETAP has postulated that the high levels may be due to up-


coding – some metabolic syndrome patients, who may not meet the diagnostic

requirements for DM2, are treated with oral anti-diabetes drugs may therefore be

incorrectly coded as DM2 cases to ensure that the beneficiary has access to PMB

benefits.

Figure 34: Expected and reported DM2 rates by mont h

Diabetes Mellitus Type 2

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Rat

e pe

r 1,

000

Ben

efic

iarie

s

Actual Expected

Actual 10.776 10.825 10.983 12.183 12.597 12.810 12.730 12.775 12.875 12.980 13.184 13.191

Expected 10.569 10.509 10.473 10.456 10.406 10.388 10.341 10.297 10.273 10.264 10.117 10.095

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Figure 35: Expected and reported DM2 rates by larg e administrators (December 2007)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Un

der 1 1-

4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Rat

e p

er 1

,000

ben

efic

iarie

s

Diabetes Mellitus 2 DISCOVERY HEALTH (PTY) LTD



2.6 Hypertension (HYP)

Even though schemes have reported HYP at levels only 7% higher than the

expected, the financial impact of this higher than expected reporting is estimated at

R9,9 M (Table 29, page 61). Figure 36 shows that the higher than expected levels

occurred mostly in the age bands above 50 years. Figure 37 shows that there has

been a rising trend over the year while Figure 38 indicates that Metropolitan Health

Corporate administered schemes have reported very high rates for beneficiaries


aged 60 and above. Note the relatively low levels reported by Discovery (Pty) Ltd

administered schemes.

Figure 36: Expected and reported number of HYP cas es by age (December 2007)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Nu

mb

er o

f Ben

efic

iarie

s

Hypertension Actual reported in REF submissions Expected based on 2005 REF Study rates

Figure 37: Expected and reported HYP rates by mont h

Hypertension

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Rat

e pe

r 1,

000

Ben

efic

iarie

s

Actual Expected

Actual 37.192 36.968 37.252 37.840 37.582 37.892 36.873 37.166 37.307 37.238 37.633 37.483

Expected 36.940 36.709 36.569 36.506 36.313 36.232 36.054 35.878 35.776 35.733 35.168 35.080

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Figure 38: Expected and reported HYP rates by larg e administrators (December 2007)

0.0

50.0

100.0

150.0

200.0

250.0

300.0

Un

der

1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Rat

e p

er 1

,000

ben

efic

iarie

s

Hypertension DISCOVERY HEALTH (PTY) LTD




2.7 Three simultaneous conditions (CC3)

Schemes have reported three simultaneous conditions at levels representing R11,3M

above the estimated cost of this risk factor - CC3 levels are 50% higher than the

expected (Table 29, page 61). Figure 39 shows that this occurs across all age

bands. The month-to-month and quarter-to-quarter variation seen in Figure 40

probably relates to case definition and data-processing issues rather than being a

true reflection of the actual level of CC3 in schemes. Figure 41 shows that each of

the four large administrators reported very high levels of this risk factor, with

Metropolitan Health Corporate and Discovery (Pty) Ltd schemes reporting the highest

levels of CC3.

Figure 39: Expected and reported number of CC3 cas es by age (December 2007)

0

2,000

4,000

6,000

8,000

10,000

12,000

Und

er 1

1-4

5-9

10-

14

15-

19

20-

24

25-

29

30-

34

35-

39

40-

44

45-

49

50-

54

55-

59

60-

64

65-

69

70-

74

75-

79

80-

84 85+

Nu

mbe

r of B

ene

ficia

ries

Three simultaneous conditions Actual reported in REF submissions Expected based on 2005 REF Study rates

Figure 40: Expected and reported CC3 rates by mont h

Three simultaneous conditions

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Rat

e pe

r 1,

000

Ben

efic

iarie

s

Actual Expected

Actual 8.871 8.820 9.019 8.534 8.658 8.791 8.434 8.585 8.612 8.496 8.650 8.599

Expected 6.100 6.057 6.031 6.022 5.987 5.972 5.941 5.909 5.890 5.881 5.780 5.764

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007


Figure 41: Expected and reported CC3 rates by larg e administrators (December 2007)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Und

er 1

1-4

5-9

10-

14

15-

19

20-

24

25-

29

30-

34

35-

39

40-

44

45-

49

50-

54

55-

59

60-

64

65-

69

70-

74

75-

79

80-

84 85+

Ra

te p

er 1

,00

0 be

nef

icia

ries

Three simultaneous conditions DISCOVERY HEALTH (PTY) LTD



2.8 Four or more simultaneous conditions (CC4)

Even though schemes have reported much higher than expected levels for CC4

(187% of the expected), it does not represent a major financial impact (R5,4 M, see

Table 29, page 61).

Figure 42: Expected and reported number of CC4 cas es by age (December 2007)

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Nu

mb

er o

f Ben

efic

iarie

s

Four or more simultaneous conditions Actual reported in REF submissions Expected based on 2005 REF Study rates

Figure 42 clearly shows the high levels across all age bands. Figure 43 indicates

that there is large month-to-month and quarter-to-quarter variation for this risk factor,

suggesting that data-definition, and processing problems rather than true risk

variation might be the underlying cause for the deviation from the expected. Figure

44 shows that Discovery (Pty) Ltd and Metropolitan Health Corporate administered

schemes have reported the highest levels of CC4. The very large difference in rates

reported by schemes associated with these two administrators and those of other


administrators probably reflects data definition matters rather than true differences in

risk profile.

Figure 43: Expected and reported CC4 rates by mont h

Four or more simultaneous conditions

0.0

0.5

1.0

1.5

2.0

2.5

Rat

e pe

r 1,

000

Ben

efic

iarie

s

Actual Expected

Actual 2.167 2.169 2.222 1.642 1.691 1.936 1.401 1.522 1.521 1.414 1.445 1.430

Expected 0.810 0.803 0.800 0.799 0.794 0.792 0.788 0.783 0.780 0.779 0.765 0.763

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Figure 44: Expected and reported CC4 rates by larg e administrators (December 2007)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Und

er 1

1-4

5-9

10-

14

15-

19

20-

24

25-

29

30-

34

35-

39

40-

44

45-

49

50-

54

55-

59

60-

64

65-

69

70-

74

75-

79

80-

84 85+

Ra

te p

er 1

,00

0 be

nef

icia

ries

Four or more simultaneous conditions DISCOVERY HEALTH (PTY) LTD



2.9 Total reported CDL conditions

Schemes have reported all CDLs (Excluding HIV, MAT and CCs) at three per cent

higher than expected (Table 29, page 61), resulting therein that the estimated cost of

CDLs as reported by schemes is R19,5M higher than expected. Figure 45 shows

that the reported levels are below the expected rates below 24 years (Mostly due to

Asthma) and but higher than expected in age bands above 55 (In descending order

of importance, due to DM2, HYP, HYL, BMD, DYS, DM1 and IHD), Figure 46

indicates the previously remarked on upward trend observed for the year.


Figure 45: Expected and reported number of total C DL cases by age (December 2007)

0

20,000

40,000

60,000

80,000

100,000

120,000

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Nu

mbe

r of B

ene

ficia

ries

Total CDL Conditions Actual reported in REF submissions Expected based on 2005 REF Study rates

Figure 46: Expected and reported total CDL rates b y month

Total CDLs reported

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Rat

e pe

r 1,

000

Ben

efic

iarie

s

Actual Expected

Actual 105.632 105.277 105.886 108.698 108.703 109.661 107.066 107.783 107.668 107.782 109.022 107.489

Expected 109.729 109.117 108.740 108.563 108.049 107.822 107.346 106.874 106.591 106.462 104.940 104.697

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Figure 47: Expected and reported total CDL rates b y large administrators (December

2007)

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

Und

er 1 1-

4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Ra

te p

er 1

,00

0 be

nefic

iarie

s

Total CDL Conditions DISCOVERY HEALTH (PTY) LTD




Figure 47 Shows that most schemes have reported levels approximating the

expected total CDL load. The exception is Metropolitan Health Corporate that has

reported levels exceeding the expected in al age-bands above 55 years.

2.10 Total multiple conditions

The deviation from the expected for total multiple conditions, reported at 34.8%

higher than expected, represents the largest deviation observed in Table 29 (page

61).

Figure 48: Expected and reported number of multipl e CDL cases by age (December

2007)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Num

ber

of B

enef

icia

ries

Total Multiple CDL Conditions Actual reported in REF submissions Expected based on 2005 REF Study rates

Figure 49: Expected and reported multiple CDL rate s by month

Total Multiple Conditions

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

Rat

e pe

r 1,

000

Ben

efic

iarie

s

Actual Expected

Actual 39.195 38.824 39.445 39.601 39.685 40.450 39.459 40.197 40.194 39.503 40.124 39.840

Expected 33.781 33.548 33.411 33.359 33.169 33.087 32.918 32.745 32.642 32.597 32.047 31.963

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

The deviation from the expected for multiple CDL conditions shows considerable

month-to-month and quarter-to-quarter variation, and is remarked on in sections 2.7

and 2.8 on pages 71 and 72.


Figure 50: Expected and reported total multiple CD L rates by large administrators

(December 2007)

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

Un

der

1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Rat

e p

er 1

,000

ben

efic

iarie

s

Multiple CDL Conditions DISCOVERY HEALTH (PTY) LTD



2.11 Maternity (MAT)

Figure 51 to Figure 53 shows that the previously poor maternity data submitted

particularly during 2005 has improved to such an extent that these numbers now

probably reflect the true risk in the industry that is associated with this REF risk

factor.

Figure 51: Expected and reported number of MAT cas es by age (December 2007)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Und

er 1

1-4

5-9

10-

14

15-

19

20-

24

25-

29

30-

34

35-

39

40-

44

45-

49

50-

54

55-

59

60-

64

65-

69

70-

74

75-

79

80-

84 85+

Num

ber

of B

enef

icia

ries

Maternity Events Actual reported in REF submissions Expected based on 2005 REF Study rates


Figure 52: Expected and reported MAT rates by mont h

Maternity events

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Rat

e pe

r 1,

000

Ben

efic

iarie

s

Actual Expected

Actual 1.268 1.152 1.274 1.204 1.251 1.149 1.187 1.175 1.078 1.144 1.109 1.098

Expected 1.137 1.140 1.143 1.144 1.146 1.148 1.153 1.155 1.157 1.159 1.164 1.165

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Figure 53: Expected and reported MAT rates by larg e administrators (December 2007)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

Und

er 1 1-

4

5-9

10-

14

15-

19

20-

24

25-

29

30-

34

35-

39

40-

44

45-

49

50-

54

55-

59

60-

64

65-

69

70-

74

75-

79

80-

84

85+

Rat

e p

er 1

,000

ben

efic

iarie

s

Maternity Events DISCOVERY HEALTH (PTY) LTD



3 Concluding remarks on risk factors deviating from the

expected

Note that the combined effect of these deviations noted in Table 29 (page 61)

amounts to R9,5 M, or only 0,5% of the total expected value of these risk factors. By

comparison, at the end of 2005 and 2006, the deviations amounted to R142,4M

(10,71%) and R49,7M (2,97%) respectively.

The deviations from the expected noted in this report is of much smaller magnitude

than what was reported on previously, and culminates in REF price by age curves

that closely resembles the expected curves (See Annexure A, page 19 and section

2.3.6 on page 13 in the main report).


Annexure G: REF price by age curves and community rate

analysis for administrator groups

Contents

1 REF PRICE BY AGE AND COMMUNITY RATE ANALYSES ............................................. 80

1.1 Benchmarks applied in the price-by-age curves and community rate analyses 80

1.2 Discovery Health (Pty) Ltd 80

1.3 Medscheme Holdings (Pty) Ltd (2007) 82

1.4 Metropolitan Health Corporate (Pty) Ltd 83

1.5 Old Mutual Healthcare (Pty) Ltd 85

1.6 Momentum Medical Scheme Administrators (Pty) Ltd 86

1.7 Allcare Administrators (Pty) Ltd 87

1.8 Rowan Angel (Pty) Ltd 89

1.9 Multimed Healthcare Administrators (Pty) Ltd 91

1.10 Sechaba Medical Solutions (Pty) Ltd 92

1.11 Sigma Health Fund Managers (Pty) Ltd 94

1.12 Full Circle Health (Pty) Ltd 95

1.13 Administrator group: Ingwe, PPS, HDS 97

1.14 Resolution Administrators (Pty) Ltd 98

1.15 Status Medical Aid Administrators (Pty) Ltd 99

1.16 Eternity Private Health Fund Administrators (Pty) Ltd 101

1.17 Providence Healthcare Risk Managers (Pty) Ltd 102

1.18 Other Administrators 104

1.19 Other Small Administrators 105

1.20 Self-administered schemes 107


Figures

Figure 54: Price by age; Discovery Health (Pty) Ltd (2007) ....................................................................80 Figure 55: Discovery Health (Pty) Ltd; community rate analysis ............................................................81 Figure 56: Price by age; Medscheme Holdings (Pty) Ltd (2007).............................................................82 Figure 57: Medscheme Holdings (Pty) Ltd; community rate analysis.....................................................83 Figure 58: Price by age; Metropolitan Health Corporate (Pty) Ltd (2007) ...............................................83 Figure 59: Metropolitan Health Corporate (Pty) Ltd; community rate analysis .......................................84 Figure 60: Price by age; Old Mutual Healthcare (Pty) Ltd (2007)............................................................85 Figure 61: Old Mutual Healthcare (Pty) Ltd; community rate analysis ....................................................85 Figure 62: Price by age; Momentum Medical Scheme Administrators (Pty) Ltd (2007) .........................86 Figure 63: Momentum Medical Scheme Administrators; community rate analysis .................................87 Figure 64: Price by age; Allcare Administrators (Pty) Ltd (2007) ...........................................................87 Figure 65: Allcare Administrators (Pty) Ltd; community rate analysis .....................................................88 Figure 66: Price by age; Rowan Angel (Pty) Ltd (2007)..........................................................................89 Figure 67: Rowan Angel (Pty) Ltd; community rate analysis...................................................................90 Figure 68: Price by age; Multimed Healthcare Administrators (Pty) Ltd (2007).......................................91 Figure 69: Multimed Healthcare Administrators (Pty) Ltd; community rate analysis ...............................92 Figure 70: Price by age; Sechaba Medical Solutions (Pty) Ltd (2007) ....................................................92 Figure 71: Sechaba Medical Solutions (Pty) Ltd; community rate analysis.............................................93 Figure 72: Price by age; Sigma Health Fund Managers (Pty) Ltd (2007)................................................94 Figure 73: Sigma Health Fund Managers (Pty) Ltd; community rate analysis.........................................95 Figure 74: Price by age; Full Circle Health (Pty) Ltd (2007)....................................................................95 Figure 75: Full Circle Health (Pty) Ltd; community rate analysis.............................................................96 Figure 76: Price by age; Ingwe, PPS, HDS (2007) .................................................................................97 Figure 77: Ingwe, PPS, HDS; community rate analysis ..........................................................................97 Figure 78: Price by age; Resolution Administrators (Pty) Ltd (2007) ......................................................98 Figure 79: Resolution Administrators (Pty) Ltd; community rate analysis ...............................................99 Figure 80: Price by age; Status Medical Aid Administrators (Pty) Ltd (2007)..........................................99 Figure 81: Status Medical Aid Administrators (Pty) Ltd; community rate analysis.................................100 Figure 82: Price by age; Eternity Private Health Fund Administrators (Pty) Ltd (2007).........................101 Figure 83: Eternity Private Health Fund Administrators (Pty) Ltd; community rate analysis .................102 Figure 84: Price by age; Providence Healthcare Risk Managers (Pty) Ltd (2007) ................................102 Figure 85: Providence Healthcare Risk Managers (Pty) Ltd; community rate analysis .........................103 Figure 86: Price by age; Other Administrators (2007)...........................................................................104 Figure 87: Other Administrators; community rate analysis....................................................................105 Figure 88: Price by age; Other Small Administrators (2007).................................................................105 Figure 89: Other Small Administrators; community rate analysis..........................................................106 Figure 90: Price by age; Self-Administered (2007) ...............................................................................107 Figure 91: Self-Administered; community rate analysis ........................................................................108


1 REF price by Age and community rate analyses

1.1 Benchmarks applied in the price-by-age curves a nd community rate analyses

Note that the expected REF risk factor rates applied in this section are based on the

2005 REF study. These curves must therefore be interpreted with the necessary

caution. A small administrator that administrates a single scheme with a very low (or

high) risk, might have very low (or high) price-by age curves which could in fact be a

true reflection of the particular scheme’s true risk. Large fluctuations and trends

should however not be influenced by this single standard benchmark for REF risk

factors.

The industry community rate for each month is calculated based on REF

submissions. The age profile against which administrators profile is compared is the

December 2007 age profile submitted in the REF returns.

1.2 Discovery Health (Pty) Ltd

Figure 54: Price by age; Discovery Health (Pty) Ltd (2007)

Quarter EndREF CurvesDISCOVERY HEALTH (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th

Expected pbpmMar 07Jun 07Sep 07Dec 07

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th

Expected pbpmSep 07Dec 07Jun 07Mar 07

The price by age curves for schemes administered by Discovery Health closely

resemble the expected price by age curve for the industry in most age bands (Figure

54 above). Minor differences are noted in the reproductive age bands due to the

fluctuations in the reported maternity rates from quarter to quarter. The price by age

moves higher than expected for the age bands above 65 years, which peaks in


March and is corrected in June to December, but remains above the expected, and

this is attributed to the following:

• The reported numbers of four or more simultaneous conditions (CC4) were significantly higher than expected in March at 393%, dropping to 131% in June, increasing in September to 172%, and dropping again in December to 151%.

• DM1 increases from 105% of the expected in June to 144% in December • CRF increases from 110% of the expected in January to 135% in December

Figure 55: Discovery Health (Pty) Ltd; community r ate analysis

DISCOVERY HEALTH (PTY) LTD Community Rate Analysis

4.243.20

4.22

-0.28

1.31 0.861.81

3.474.21

3.201.59 2.27

-10.00

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm

Due to Age Profile Due to Chronic Disease Due to Maternity Difference from Measured ICR

Due to Maternity 3.05 -0.78 2.07 1.20 1.93 -0.32 -0.12 0.66 -0.51 0.29 -1.39 -1.78

Due to Chronic Disease -4.21 -1.60 -3.65 -7.48 -6.76 -5.02 -4.27 -3.47 -1.40 -3.40 -3.50 -2.65

Due to Age Profile 5.40 5.58 5.80 6.00 6.14 6.20 6.20 6.28 6.12 6.31 6.49 6.70

Difference from Measured ICR 4.24 3.20 4.22 -0.28 1.31 0.86 1.81 3.47 4.21 3.20 1.59 2.27

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

4.243.20

4.22

-0.28

1.31 0.861.81

3.474.21

3.201.59 2.27

-10.00

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 3.05 -0.78 2.07 1.20 1.93 -0.32 -0.12 0.66 -0.51 0.29 -1.39 -1.78



Difference from Measured ICR 4.24 3.20 4.22 -0.28 1.31 0.86 1.81 3.47 4.21 3.20 1.59 2.27

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Figure 55 above shows the Discovery Health administered schemes reported

Maternity rates at R3.05 pbpm higher than expected for January to R1.78 pbpm

lower than expected for December; the chronic disease rates were reported at

between R1.40 and R7.48 pbpm lower than expected. The Discovery Health

administered schemes have a slightly older age profile than the industry average,

which leads thereto that the community rate for these schemes are between R5.40

and R6.70 pbpm higher than the industry community rate for January and December

respectively.


1.3 Medscheme Holdings (Pty) Ltd (2007)

Figure 56: Price by age; Medscheme Holdings (Pty) L td (2007)

Quarter EndREF CurvesMEDSCHEME HOLDINGS (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r ben

efic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r ben

efic

iary

per

mon

th


The price by age curve for Medscheme Holdings administered schemes is higher

than expected in the older age bands for the June, September and December

submissions due to the reporting of higher than expected total CDL conditions

(Figure 56 above). Minor differences are noted in the reproductive age bands, and

these differences are because of fluctuations in the reported maternity rates from

quarter to quarter. The following explains these findings:

• DM2 increases from 113% of the expected in January to 146% in December • HYP increases from 102% of the expected in January to 112% in December • CC3 increases from 111% of the expected in January to 145% in December • CC2 increases from 102% of the expected in January to 119% in December • Maternity fluctuates between 67% to 124% of the expected • Total CDL fluctuates from 93% of the expected in March to 107% for June

and September respectively and to 105% in December


Figure 57: Medscheme Holdings (Pty) Ltd; community rate analysis

MEDSCHEME HOLDINGS (PTY) LTD Community Rate Analysis

-15.03-13.43

-10.96

-6.73-8.58 -7.69

-6.21 -6.96

-11.86-9.50 -10.42

-7.61

-25.00

-20.00

-15.00

-10.00

-5.00

0.00

5.00

10.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 3.98 2.88 4.84 3.70 2.41 0.98 1.78 0.91 -5.74 -1.49 -2.02 -0.07

Due to Chronic Disease -3.26 -0.95 -1.10 3.74 2.75 4.64 4.94 4.76 6.27 3.84 3.10 3.58

Due to Age Profile -15.75 -15.35 -14.71 -14.17 -13.74 -13.31 -12.93 -12.63 -12.40 -11.86 -11.50 -11.12

Difference from Measured ICR -15.03 -13.43 -10.96 -6.73 -8.58 -7.69 -6.21 -6.96 -11.86 -9.50 -10.42 -7.61

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

-15.03-13.43

-10.96

-6.73-8.58 -7.69

-6.21 -6.96

-11.86-9.50 -10.42

-7.61

-25.00

-20.00

-15.00

-10.00

-5.00

0.00

5.00

10.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 3.98 2.88 4.84 3.70 2.41 0.98 1.78 0.91 -5.74 -1.49 -2.02 -0.07

Due to Chronic Disease -3.26 -0.95 -1.10 3.74 2.75 4.64 4.94 4.76 6.27 3.84 3.10 3.58



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Figure 57 above shows that Medscheme Holdings administered schemes reported

maternity rates at R3.98 pbpm higher than expected for January to R0.07 pbpm

lower than expected for December. These schemes reported chronic disease rates

at R3.26 pbpm lower than expected for January to R6.27 pbpm higher than expected

for September. These schemes have a younger than average age profile, equivalent

to between R11.12 and R15.75 pbpm below the average.

1.4 Metropolitan Health Corporate (Pty) Ltd

Figure 58: Price by age; Metropolitan Health Corpor ate (Pty) Ltd (2007)

Quarter EndREF CurvesMETROPOLITAN HEALTH CORPORATE (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r ben

efic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r ben

efic

iary

per

mon

th



Metropolitan Health Corporate administered schemes have shown major

improvement from 2006 to 2007. The price by age curve in the age bands above 40

years are closer to the expected, although it remains above the expected (Figure 58

above). This is due to significantly higher than expected reporting on the multiple

CDL conditions, diabetes mellitus 2, and hypertension. These conditions are

reported on as follows:

• Four or more simultaneous conditions (CC4) fluctuates between 374% of the expected in March to 361% in June, decreasing to 186 % in September increasing to 194% in December.

• Three simultaneous conditions (CC3) fluctuate between 185% of the expected in January to 168 % in December.

• Hypertension shows an increase from 112% of the expected in January to 128% in December.

• Diabetes Mellitus 2 increases from 154% of the expected in January to 189% in December.

Figure 59: Metropolitan Health Corporate (Pty) Ltd ; community rate analysis

METROPOLITAN HEALTH CORPORATE Community Rate Analysis

5.45

2.28

-0.07

-5.42-6.80 -6.26

-8.71-10.13 -9.21

-13.43-10.80 -10.70

-20.00

-15.00

-10.00

-5.00

0.00

5.00

10.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 2.74 0.89 4.19 1.63 2.83 3.07 2.92 2.42 2.55 1.89 1.43 1.63

Due to Chronic Disease 5.51 6.49 2.87 1.12 -0.02 1.82 0.11 0.48 2.49 -0.20 2.54 2.79


Difference from Measured ICR 5.45 2.28 -0.07 -5.42 -6.80 -6.26 -8.71 -10.13 -9.21 -13.43 -10.80 -10.70

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

5.45

2.28

-0.07

-5.42-6.80 -6.26

-8.71-10.13 -9.21

-13.43-10.80 -10.70

-20.00

-15.00

-10.00

-5.00

0.00

5.00

10.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 2.74 0.89 4.19 1.63 2.83 3.07 2.92 2.42 2.55 1.89 1.43 1.63

Due to Chronic Disease 5.51 6.49 2.87 1.12 -0.02 1.82 0.11 0.48 2.49 -0.20 2.54 2.79


Difference from Measured ICR 5.45 2.28 -0.07 -5.42 -6.80 -6.26 -8.71 -10.13 -9.21 -13.43 -10.80 -10.70

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Figure 59 above shows that the community rate for Metropolitan Health Corporate

administered schemes fluctuates between R2.74 pbpm higher than expected for

January to R1.63 pbpm higher than expected for December due to their maternity

rates. Chronic diseases are reported at rates between R5.51 and R2.79 pbpm

higher than expected for January and December respectively. The younger than

average age profile of these schemes amount to a community rate equivalent to

between R2.80 and R15.12 pbpm lower than average for January and December

respectively. The changing age profile is due to growth in the Government

Employees Medical scheme with many young beneficiaries.


1.5 Old Mutual Healthcare (Pty) Ltd

Figure 60: Price by age; Old Mutual Healthcare (Pty ) Ltd (2007)

Quarter EndREF CurvesOLD MUTUAL HEALTHCARE (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r ben

efic

iary

per

mon

th


There is a small difference between the actual and expected price by age curves for

Old Mutual Healthcare administered schemes in all age bands (Figure 60, above).

This is a major improvement when compared to 2006.

Figure 61: Old Mutual Healthcare (Pty) Ltd; communi ty rate analysis

Old Mutual Healthcare (Pty) Ltd Community Rate Analysis

-20.01-17.97 -18.27

-12.38 -12.39-14.29

-7.82-10.05

-8.95-7.05 -6.56 -6.56

-25.00

-20.00

-15.00

-10.00

-5.00

0.00

5.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 1.94 0.98 2.26 2.14 2.43 -0.32 0.51 -0.20 -2.00 -0.34 0.09 -0.90




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

-20.01-17.97 -18.27

-12.38 -12.39-14.29

-7.82-10.05

-8.95-7.05 -6.56 -6.56

-25.00

-20.00

-15.00

-10.00

-5.00

0.00

5.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 1.94 0.98 2.26 2.14 2.43 -0.32 0.51 -0.20 -2.00 -0.34 0.09 -0.90




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Old Mutual Healthcare administered schemes’ community rate fluctuates between

R20.01 pbpm lower than expected in January to R6.56 pbpm lower than expected for

December. Chronic diseases are reported between R12.57 pbpm and R2.63 pbpm

lower than expected. Maternity rates were higher than expected in the first half of the

year (up to R2.43 above expected) but lower than expected in the 2nd half of the year,


being R2.00 pbpm below expected in September. These schemes had an age

profile that was more favourable than average, starting at R9.38 pbpm below the

average in January, gradually increasing to R2.59 pbpm below average by year-end.

1.6 Momentum Medical Scheme Administrators (Pty) Lt d

Figure 62: Price by age; Momentum Medical Scheme A dministrators (Pty) Ltd (2007)

Quarter EndREF CurvesMOMENTUM MEDICAL SCHEME ADMINISTRATORS (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r ben

efic

iary

per

mon

th


The schemes administered by Momentum Medical Scheme Administrators (Figure

62 above) displays a price by age curve that is below the expected for the age bands

29 – 39, due to maternity reported below the expected, but rises above the expected

for the age bands 50 – 84 due to the following:

• Four or more simultaneous conditions (CC4) increases from 170% of the expected in March to 220% in December

• Three simultaneous conditions (CC3) increases from 156% of the expected in March to 188% in December

• Total CDL conditions increases from 97% of the expected in March to 106% in December

• Diabetes Mellitus 1 and 2 increases from 125% and 112% of the expected in March to 165% and 142% in December respectively.

• Dysrhythmias increases from 165% of the expected in March to 186% in December


Figure 63: Momentum Medical Scheme Administrators; community rate analysis

MOMENTUM MEDICAL SCHEME ADMINISTRATORS (PTY) LTD Community Rate Analysis

21.5923.23 22.90 21.76

25.58

20.5923.37

21.1423.39 23.27 22.12 22.36

-5.00

0.00

5.00

10.00

15.00

20.00

25.00

30.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 0.35 -0.68 1.53 -0.91 4.16 -1.44 -0.60 -2.27 -1.68 -1.81 -2.17 -3.06

Due to Chronic Disease -0.54 2.33 -0.01 1.43 0.40 1.28 3.33 3.03 4.96 4.90 4.19 5.38


Difference from Measured ICR 21.59 23.23 22.90 21.76 25.58 20.59 23.37 21.14 23.39 23.27 22.12 22.36

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

21.5923.23 22.90 21.76

25.58

20.5923.37

21.1423.39 23.27 22.12 22.36

-5.00

0.00

5.00

10.00

15.00

20.00

25.00

30.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 0.35 -0.68 1.53 -0.91 4.16 -1.44 -0.60 -2.27 -1.68 -1.81 -2.17 -3.06

Due to Chronic Disease -0.54 2.33 -0.01 1.43 0.40 1.28 3.33 3.03 4.96 4.90 4.19 5.38



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

The Schemes administered by Momentum Medical Scheme Administrators reported

maternity rates fluctuating between R0.35 pbpm above the expected in January

down to R3.06 pbpm below the expected in December. Chronic diseases were

reported at R0.54 pbpm below the expected in January but increased to R5.38 pbpm

above the expected in December. The age profile is approximately R23 pbpm above

the average.

1.7 Allcare Administrators (Pty) Ltd

Figure 64: Price by age; Allcare Administrators (P ty) Ltd (2007)

Quarter EndREF CurvesALLCARE ADMINISTRATORS (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r ben

efic

iary

per

mon

th



The schemes administered by Allcare Administrators have price by age curves that

are lower than expected in March due to total CDL conditions reported at 77% of the

expected levels (Figure 64 above). The price by age curves for June, September,

and December are above the expected in the age bands above 70 years due to

increases in multiple CDL conditions as described below.

• Two simultaneous conditions (CC2) increases from 96% of the expected in June to 125% in December.

• Three simultaneous conditions (CC3) increases from 101% of the expected in June to 120% in December.

• Four or more simultaneous conditions (CC4) increases from 112% of the expected in June to 146% in December.

Figure 65: Allcare Administrators (Pty) Ltd; commun ity rate analysis

ALLCARE ADMINISTRATORS (PTY) LTD Community Rate Analysis

-59.12 -57.39 -55.68-49.82 -47.84 -45.12 -43.97 -44.49 -46.34

-40.72 -42.69 -41.83

-70.00

-60.00

-50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 0.58 -0.51 3.09 0.33 3.23 1.99 2.06 0.60 -2.71 1.33 0.40 0.06




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

-59.12 -57.39 -55.68-49.82 -47.84 -45.12 -43.97 -44.49 -46.34

-40.72 -42.69 -41.83

-70.00

-60.00

-50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 0.58 -0.51 3.09 0.33 3.23 1.99 2.06 0.60 -2.71 1.33 0.40 0.06




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

The community rate analysis for schemes administered by Allcare Administrators

shows that the community rate increased from R59.12 pbpm below the industry

community rate in January to R41.83 below the industry community rate in

December. Maternity rates were R2.71 pbpm lower than expected in January up to

R2.06 pbpm higher than expected in July. Chronic disease rates were R16.23 pbpm

lower than expected in January, but increased to R4.03 below expected in October.

The age profile was R43.8 below average in January, but increased to R37.18 pbpm

below average in December.


1.8 Rowan Angel (Pty) Ltd

Figure 66: Price by age; Rowan Angel (Pty) Ltd (200 7)

Quarter EndREF CurvesROWAN ANGEL (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r ben

efic

iary

per

mon

th


Spectramed Medical Scheme, administered by Rowan Angel displays a price by age

curve that is lower than expected for most age bands, the lowest being reported in

March and June, which is due to the low count data of total CDL conditions ranging

between 54% and 80% of the expected, and the significantly low count of multiple

CDLs ranging between 36% and 54% of the expected (Figure 66 above). September

and December price by age moves closer to the expected due to the following:

• Two simultaneous conditions increase from 60% of the expected in June to 159% in September and then decreases to 81% in December.

• Three simultaneous conditions increase from 31% of the expected in June to 184% in September and then decreases to 102% in December.

• Four or more simultaneous conditions increase from 21% of the expected in June to 459% in September and then decreases to 151% in December.

Spectramed Medical Scheme was categorised as follows:

• Category 3 for January, February, April and May • Category 6 for March • Category 8 for June, and • Category 9 for July to December


Figure 67: Rowan Angel (Pty) Ltd; community rate an alysis

ROWAN ANGEL (PTY) LTD Community Rate Analysis

-60.00 -62.66

-75.62

-55.94-59.45

-70.30

-41.28-37.18 -36.66

-40.63 -42.07 -42.35

-80.00

-70.00

-60.00

-50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 3.71 0.45 -3.90 3.41 -0.63 -14.28 -0.98 -0.45 -2.18 -0.88 -0.16 -1.17

Due to Chronic Disease -21.36 -16.02 -26.09 -15.08 -15.97 -14.70 2.12 1.63 -0.26 -7.18 -9.52 -10.28



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

-60.00 -62.66

-75.62

-55.94-59.45

-70.30

-41.28-37.18 -36.66

-40.63 -42.07 -42.35

-80.00

-70.00

-60.00

-50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 3.71 0.45 -3.90 3.41 -0.63 -14.28 -0.98 -0.45 -2.18 -0.88 -0.16 -1.17

Due to Chronic Disease -21.36 -16.02 -26.09 -15.08 -15.97 -14.70 2.12 1.63 -0.26 -7.18 -9.52 -10.28



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

The erratic community rate for Spectramed fluctuated between R75.62 pbpm below

the industry community rate in March, up to R36.66 pbpm below the industry

community rate in September. This fluctuation is due to large variations in the

reported age and REF risk factors for beneficiaries. Spectramed reported maternity

at R14.28 pbpm below the expected levels in June, up to R3.71 pbpm above the

expected levels in January. Chronic disease was reported R26.09 pbpm below the

expected in March, up to R2.12 pbpm above the expected in July. The age profile

varied from R45.62 pbpm below the industry average in March to R30.89 pbpm

below the average in December.


1.9 Multimed Healthcare Administrators (Pty) Ltd

Figure 68: Price by age; Multimed Healthcare Admini strators (Pty) Ltd (2007)

Quarter EndREF CurvesMULTIMED HEALTHCARE ADMINISTRATORS (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r ben

efic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r ben

efic

iary

per

mon

th


Keyhealth Medical Scheme, administered by Multimed, has a price by age curve in

December, that is slightly below the expected for the reproductive age bands, while

in March, June, and Sept was higher than expected (Figure 68 above). The price by

age curve remained higher than expected for all age bands above 40 years over all

quarters due to the following:

• Total CDL conditions peaking in June at 177% of the expected decreasing to 158% in December.

• Multiple CDL peaking in June at 218% of the expected, decreasing to 186% in December.

• Dysrhythmias peaking in June at 414% of the expected, decreasing to 380% in December.

• Epilepsy peaking in June at 227% of the expected, decreasing to 192% in December.

• Hyperlipidaemia in March at 239% of the expected, decreasing to 180% in December.

• Hypertension in March at 170% of the expected, decreasing to 157% in December.

• Coronary artery disease from 208% of the expected in March to 203% in December.

Keyhealth Medical Scheme was categorised as flows:

• Category 7 for January to July and • Category 9 for August to December


Figure 69: Multimed Healthcare Administrators (Pty) Ltd; community rate analysis

MULTIMED HEALTHCARE ADMINISTRATORS (PTY) LTD Community Rate Analysis

71.67 74.69 72.01

88.5596.89

89.92

75.49 73.67 76.05 75.34 75.31 72.99

-20.00

0.00

20.00

40.00

60.00

80.00

100.00

120.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 4.92 2.79 0.56 1.38 6.90 0.83 0.09 -2.12 -1.17 -1.55 -1.19 -3.75

Due to Chronic Disease 33.87 37.73 36.23 50.98 53.14 51.55 37.19 36.89 37.53 36.08 35.00 34.28



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

71.67 74.69 72.01

88.5596.89

89.92

75.49 73.67 76.05 75.34 75.31 72.99

-20.00

0.00

20.00

40.00

60.00

80.00

100.00

120.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 4.92 2.79 0.56 1.38 6.90 0.83 0.09 -2.12 -1.17 -1.55 -1.19 -3.75




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

The community rate for Multimed Healthcare administered schemes fluctuated

between R72.01 pbpm above the industry community rate in March up to R96.89

pbpm above the community rate in May. Maternity rates fluctuated between R3.75

pbpm below the expected in December, to R6.90 pbpm above the expected in May.

Reported chronic disease rates varied between R33.87 and R53.14 pbpm above the

expected in January and June respectively. The age profile was R32.88 pbpm above

the average in January and increased to R42.46 pbpm above the average in

December.

1.10 Sechaba Medical Solutions (Pty) Ltd

Figure 70: Price by age; Sechaba Medical Solutions (Pty) Ltd (2007)

Quarter EndREF CurvesSECHABA MEDICAL SOLUTIONS (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th



Sizwe Medical Scheme, which is administered by Sechaba Medical Solutions,

remains close to the expected in most age bands for all quarters, moving to slightly

above the expected for March and June in the ages above 44 years. The price by

age curve in September drops below the expected for the age bands above 59 years,

were as March, June, and December moves to higher than expected for the age

bands above 65 years, moving closer to the expected in the age 80+ (Figure 70

above). These variations are explained by the following:

• Diabetes Mellitus 2 fluctuates between 178% of the expected in March to 175% in December.

• Bipolar Mood Disorder peaks in June at 187% of the expected, decreasing to 126% in December.

• Glaucoma peaks in June at 146% of the expected, decreasing to 102% in December.

• Hyperlipidaemia peaks in June at 119% of the expected, decreasing to 94% in December.

• Hypertension peaks in June at 113% of the expected, decreasing to 110% in December.

• Multiple CDL peak in June at 148% of the expected, decreasing to 125% in December.

Sizwe Medical Scheme was categorised as follows:

• Category 3 for quarter 1 and quarter 4, and • Category 9 for quarter 2 and quarter 3

Figure 71: Sechaba Medical Solutions (Pty) Ltd; com munity rate analysis

SECHABA MEDICAL SOLUTIONS (PTY) LTD Community Rate Analysis

-15.40 -14.79 -13.88-11.80

-13.62

-8.01

-18.72

-23.19

-18.15 -19.02 -20.28 -20.75-25.00

-20.00

-15.00

-10.00

-5.00

0.00

5.00

10.00

15.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 1.54 -0.21 2.47 1.47 0.46 4.19 2.97 -2.11 1.79 -0.22 -0.70 -1.85

Due to Chronic Disease -0.18 2.42 0.65 3.60 2.92 4.72 -4.89 -4.12 -3.02 -1.88 -2.66 -1.94



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

-15.40 -14.79 -13.88-11.80

-13.62

-8.01

-18.72

-23.19

-18.15 -19.02 -20.28 -20.75-25.00

-20.00

-15.00

-10.00

-5.00

0.00

5.00

10.00

15.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 1.54 -0.21 2.47 1.47 0.46 4.19 2.97 -2.11 1.79 -0.22 -0.70 -1.85

Due to Chronic Disease -0.18 2.42 0.65 3.60 2.92 4.72 -4.89 -4.12 -3.02 -1.88 -2.66 -1.94



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Sizwe Medical Scheme community rate ranges from R8.01 pbpm below the industry

community rate in June down to R23.19 pbpm below the rate in August. Maternity


rates ranged between R1.85 pbpm below the expected in December up to R4.19

pbpm above the expected in June. Chronic disease rates varied between R4.89

pbpm below the expected in July, up to R2.42 pbpm above the expected in February.

At approximately R17 pbpm below the average, the age profile was consistent during

the year.

1.11 Sigma Health Fund Managers (Pty) Ltd

Figure 72: Price by age; Sigma Health Fund Managers (Pty) Ltd (2007)

Quarter EndREF CurvesSIGMA HEALTH FUND MANAGERS (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


Prosano Medical Scheme, administered by Sigma Health Fund Managers has a price

by age curve that remains close to the expected in the age bands up to 40 years

(Figure 72). The price by age above 44 years is higher than expected for all

quarters, with September and December moving closer to the expected. This is due

to higher than expected reporting on total CDL conditions fluctuating from 130% of

the expected in March to 134% in December, and multiple CDL fluctuating from

182% of the expected in March to 172% in December. Prosano Medical Scheme

was categorised as category 3 H.


Figure 73: Sigma Health Fund Managers (Pty) Ltd; co mmunity rate analysis

SIGMA HEALTH FUND MANAGERS (PTY) LTD Community Rate Analysis

75.45 74.34 76.38 73.78 73.49 74.25 72.11 72.22 73.6467.07 64.24 63.77

-10.00 0.00

10.0020.0030.0040.0050.0060.0070.0080.0090.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 1.43 -1.74 2.56 -1.22 1.69 -0.92 -0.70 -0.79 0.92 -3.63 -2.22 -0.95




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

75.45 74.34 76.38 73.78 73.49 74.25 72.11 72.22 73.6467.07 64.24 63.77

-10.00

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 1.43 -1.74 2.56 -1.22 1.69 -0.92 -0.70 -0.79 0.92 -3.63 -2.22 -0.95




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

The community rate for Prosano Medical Scheme fluctuated between R75.45 pbpm

above the industry community rate in January, decreasing to R63.77 pbpm above the

rate in December. In January, chronic disease rates were reported at R35.81 pbpm

above the expected, decreasing to R25.94 pbpm above the expected in October.

The age profile also showed considerable variation, being R43.55 pbpm above the

average in September, down to R38.52 pbpm above the average in December.

1.12 Full Circle Health (Pty) Ltd

Figure 74: Price by age; Full Circle Health (Pty) L td (2007)

Quarter EndREF CurvesFULL CIRCLE HEALTH (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th



Full Circle Health’s price by age curve is below the expected for the age bands

between 19 to 44 and 55+ for all quarters, it does however move above the expected

for December in the age bands 44 to 59 (Figure 74 above).

Figure 75: Full Circle Health (Pty) Ltd; community rate analysis

FULL CIRCLE HEALTH (PTY) LTD Community Rate Analysis

-65.96-62.34

-66.68 -63.63-68.86 -67.26 -66.95 -65.95 -63.25

-57.31 -55.77 -53.87

-80.00

-70.00

-60.00

-50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -15.77 -14.86 -15.82 -14.50 -16.18 -15.48 -15.56 -15.64 -15.90 -14.38 -15.78 -15.70

Due to Chronic Disease -3.95 -1.98 -6.16 -5.02 -9.10 -8.65 -8.81 -8.39 -6.42 -2.97 -0.63 0.31



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

-65.96-62.34

-66.68 -63.63-68.86 -67.26 -66.95 -65.95 -63.25

-57.31 -55.77 -53.87

-80.00

-70.00

-60.00

-50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -15.77 -14.86 -15.82 -14.50 -16.18 -15.48 -15.56 -15.64 -15.90 -14.38 -15.78 -15.70

Due to Chronic Disease -3.95 -1.98 -6.16 -5.02 -9.10 -8.65 -8.81 -8.39 -6.42 -2.97 -0.63 0.31



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Schemes administered by Full Circle Health had an erratic community rate fluctuating

between R53.87 below the industry community rate in December, down to R68.66

below the industry community rate in May.

Maternity rates were reported at up to R16.18 pbpm below the expected in May.

Chronic disease rates were also reported at low levels, down to R8.39 below the

expected in August. The reported age profile was between R43.57 and R38.47

pbpm below the industry average.


1.13 Administrator group: Ingwe, PPS, HDS

Figure 76: Price by age; Ingwe, PPS, HDS (2007)

Quarter EndREF CurvesIngwe, PPS, HDS

0

100

200

300

400

500

600

700

800

900

1,000

1,100

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


Price by age for the schemes administered by Ingwe, PPS, HDS drops below the

expected in age bands 19 to 34 and move to higher than expected for age bands

above 59 years (Figure 76 above). This is all due to the following variances:

• Total CDL conditions reported at 115% of the expected in March and to 131% in December.

• Multiple CDL reported at 146% of the expected in March and decreases to 131% in December.

Figure 77: Ingwe, PPS, HDS; community rate analysis

Ingwe, PPS, HDS Community Rate Analysis

37.3841.62

38.2541.72 42.26

39.65 38.5833.85 34.74 33.42 31.56 33.13

-10.00

0.00

10.00

20.00

30.00

40.00

50.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -3.00 -0.64 -1.26 -1.45 -1.12 -3.85 -0.11 -4.66 -5.05 -1.88 -2.99 -3.40




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

37.3841.62

38.2541.72 42.26

39.65 38.5833.85 34.74 33.42 31.56 33.13

-10.00

0.00

10.00

20.00

30.00

40.00

50.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -3.00 -0.64 -1.26 -1.45 -1.12 -3.85 -0.11 -4.66 -5.05 -1.88 -2.99 -3.40




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007


The reported age profile for Ingwe, PPS, HDS administered schemes was consistent

at approximately R32 pbpm above the industry average. Maternity rates fluctuated

between R5.05 and R0.64 pbpm below the expected. Chronic disease rates were

between R11.73 and R2.23 pbpm above the expected rates. The age profile is

between R33.87 and R31.15 pbpm above the industry average.

1.14 Resolution Administrators (Pty) Ltd

Figure 78: Price by age; Resolution Administrators (Pty) Ltd (2007)

Quarter EndREF CurvesRESOLUTION ADMINISTRATORS (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


Resolution Health Medical Scheme administered by Resolution Health Administrators

price by age is below the expected for all quarters for the age bands above 19 years,

due to the reporting of lower than expected total CDL conditions, decreasing from

58% of the expected in March to 7% in December, and multiple CDL decreasing from

57% of the expected in March to 0% in December (Figure 78 above). The price by

age curve in the age bands 45 – 49 in December, increase to above the expected.

This is due to the fluctuations in the reporting of Multiple Sclerosis from 17% of the

expected in March, to 9% in June and September respectively, increasing to 4285%

of the expected in December. Resolution Health Medical Scheme was categorised

as follows:

• Category 3 L for quarter 1 • Category 6 for quarters 2 and 3, and • Category 9 for quarter 4


Figure 79: Resolution Administrators (Pty) Ltd; com munity rate analysis

RESOLUTION ADMINISTRATORS (PTY) LTD Community Rate Analysis

-82.64 -83.86 -78.25

-93.17 -91.84 -91.62 -94.40 -93.35-101.66

-74.23

-45.41

-74.57

-120.00

-100.00

-80.00

-60.00

-40.00

-20.00

0.00

20.00

40.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 4.02 -0.19 7.93 0.50 2.42 1.82 -0.69 0.62 -9.93 -20.39 -20.44 -20.36

Due to Chronic Disease -25.32 -22.95 -25.99 -34.15 -35.41 -35.02 -35.96 -36.89 -35.43 1.80 29.98 -0.34



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

-82.64 -83.86 -78.25

-93.17 -91.84 -91.62 -94.40 -93.35-101.66

-74.23

-45.41

-74.57

-120.00

-100.00

-80.00

-60.00

-40.00

-20.00

0.00

20.00

40.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 4.02 -0.19 7.93 0.50 2.42 1.82 -0.69 0.62 -9.93 -20.39 -20.44 -20.36

Due to Chronic Disease -25.32 -22.95 -25.99 -34.15 -35.41 -35.02 -35.96 -36.89 -35.43 1.80 29.98 -0.34



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Resolution Health Medical Scheme’s community rate fluctuate between R20.44

pbpm lower than expected to R7.93 pbpm higher than expected due to their

maternity rates; chronic diseases reported at rates fluctuating from R36.89 lower than

expected to R29.98 pbpm higher than expected and the younger age profile of the

scheme leads to a community rate of between R61.34 and R53.86 pbpm lower than

expected.

1.15 Status Medical Aid Administrators (Pty) Ltd

Figure 80: Price by age; Status Medical Aid Adminis trators (Pty) Ltd (2007)

Quarter EndREF CurvesSTATUS MEDICAL AID ADMINISTRATORS (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th



The price by age curve for Status Medical Aid Administrators administered schemes

remain close to the expected for all age bands up to 44 years and then moves to

below the expected for the age bands up to 85+ (Figure 80). This is due to total CDL

conditions reported at 56% of the expected for March increasing to 63% in

December, and multiple CDL reported at 40% of the expected for March increasing

to 47% in December. The schemes administered by Status Medical Aid was

categorised as follows:

• Biz Health Medical scheme o Category 3 L for quarters 1 and 2, and o Category 3 for quarters 3 and 4

• CIMAS Wellness Medical Scheme – category 3 • Compcare Wellness Medical Scheme 3 L • Good Hope Medical Benefit – category 9 • Grintek Medical Scheme – category 3 • Lifemed Medical Scheme – category 3 L • Protea Medical Scheme

o Category 3 for quarters 1, 3 and 4 o Category 5 for quarter 2

• Tiger Brands Medical Scheme – category 3 L

Figure 81: Status Medical Aid Administrators (Pty) Ltd; community rate analysis

STATUS MEDICAL AID ADMINISTRATORS (PTY) LTD Community Rate Analysis

-5.38 -1.17 -4.88

3.77 0.79 1.47

18.21 17.66 18.07 21.87 23.2517.49

-60.00

-40.00

-20.00

0.00

20.00

40.00

60.00

80.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -6.55 -3.75 -3.41 -2.80 -3.63 -2.91 -2.32 -2.91 -2.01 -1.13 -0.14 -3.48



Difference from Measured ICR -5.38 -1.17 -4.88 3.77 0.79 1.47 18.21 17.66 18.07 21.87 23.25 17.49

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

-5.38 -1.17 -4.88

3.77 0.79 1.47

18.21 17.66 18.07 21.87 23.2517.49

-60.00

-40.00

-20.00

0.00

20.00

40.00

60.00

80.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -6.55 -3.75 -3.41 -2.80 -3.63 -2.91 -2.32 -2.91 -2.01 -1.13 -0.14 -3.48



Difference from Measured ICR -5.38 -1.17 -4.88 3.77 0.79 1.47 18.21 17.66 18.07 21.87 23.25 17.49

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

The schemes administered by Status Medical Aid Administrators have a community

rate that fluctuates between R6.55 and R0.14 pbpm lower than expected due to their

maternity rates; chronic diseases reported at rates between R36.76 and R31.56

pbpm higher than expected and the schemes slightly older age profile leads to the

community rate of between R57.73 and R34.14 pbpm higher than expected.


1.16 Eternity Private Health Fund Administrators (P ty) Ltd

Figure 82: Price by age; Eternity Private Health Fu nd Administrators (Pty) Ltd (2007)

Quarter EndREF CurvesETERNITY PRIVATE HEALTH FUND ADMINISTRATORS (PTY) L TD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

1,400

1,500

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


Chartered Accountants Medical Aid Fund (CAMAF), which is administered by

Eternity Private Health Fund Administrators remains significantly above the expected

for the ages above 29 years for March, June and September and above the expected

for the age bands above 35 years for December (Figure 82 above). This is due to

the following higher than expected reporting of:

• Total CDL conditions at 187% of the expected for March, increasing to 190% in December.

• Multiple CDL at 225% in March, increasing to 236% in December. • Asthma at 242% in March, increasing to 252% in December. • Hyperlipidaemia at 255% in March, increasing to 275 % in December. • Dysrhythmias at 265% in March, increasing to 280% in December.

Chartered Accountants Medical Aid Fund (CAMAF) was categorised as follows

• Category 9 for quarters 1, 2, 3 and December • Category 7 for October and November


Figure 83: Eternity Private Health Fund Administrat ors (Pty) Ltd; community rate

analysis

ETERNITY PRIVATE HEALTH FUND ADMINISTRATORS (PTY) L TD Community Rate Analysis

36.82 36.9228.87 31.98

36.5329.10

36.63

24.84

41.93 38.84

27.38

10.29

-60.00

-40.00

-20.00

0.00

20.00

40.00

60.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -8.76 -8.96 -13.51 -12.55 -7.25 -15.84 -8.48 -20.02 -5.70 -7.70 -18.63 -36.64




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

36.82 36.9228.87 31.98

36.5329.10

36.63

24.84

41.93 38.84

27.38

10.29

-60.00

-40.00

-20.00

0.00

20.00

40.00

60.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -8.76 -8.96 -13.51 -12.55 -7.25 -15.84 -8.48 -20.02 -5.70 -7.70 -18.63 -36.64




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Chartered Accountants Medical Aid Fund (CAMAF) has reported maternity rates that

are between R20.02 and R5.70 pbpm lower than expected; chronic diseases were

reported at rates costing between R54.08 and R49.39 pbpm higher than expected,

while the schemes slightly younger age profile costs between R7.28 and R4.54 pbpm

lower than the average. The combination of these leads to a scheme community rate

varying between R10.29 and R41.93 pbpm above the industry community rate.

1.17 Providence Healthcare Risk Managers (Pty) Ltd

Figure 84: Price by age; Providence Healthcare Risk Managers (Pty) Ltd (2007)

Quarter EndREF CurvesPROVIDENCE HEALTHCARE RISK MANAGERS (PTY) LTD

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th



Price by age for Providence Healthcare Risk Managers administered schemes

moves below the expected in the age bands between 24 and 39 years due to lower

than expected maternity rates (Figure 84), the price by age is above the expected in

the age bands above 44 years due to the following:

• Total CDL conditions fluctuating between 127% and 156%.of the expected • Multiple CDL fluctuating between 233% and 163% of the expected • Coronary Artery Disease at 219% of the expected in January to 161% in

December. • Diabetes Mellitus 1 at 163% of the expected in January to 161% in

December. • Diabetes Mellitus 2 at 53% of the expected in March to 184% in December.

The schemes administered by Providence Healthcare Risk Managers were

categorised as follows:

• Goldfields Medical Scheme – category 3 H • Medimed Medical Scheme – category 9 in quarter 1, 3, and 9. Category 3 in

quarter 2. • Minemed Medical Scheme – January to April and June to December:

Category 3 H, May: Category 4 • Rhodes University Medical Scheme – category 3 • Suremed Health medical Scheme – January to April, and June: category 9,

May: category 4, July to December: category 3

Figure 85: Providence Healthcare Risk Managers (Pty ) Ltd; community rate analysis

PROVIDENCE HEALTHCARE RISK MANAGERS (PTY) LTD Community Rate Analysis

6.66 4.331.51

-2.46

-26.92

5.22 3.13 4.34 5.71 7.514.13 3.34

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

40.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -7.21 -7.28 -6.58 -10.23 -9.76 -4.74 -8.09 -7.44 -7.42 -6.35 -8.14 -8.81



Difference from Measured ICR 6.66 4.33 1.51 -2.46 -26.92 5.22 3.13 4.34 5.71 7.51 4.13 3.34

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

6.66 4.331.51

-2.46

-26.92

5.22 3.13 4.34 5.71 7.514.13 3.34

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

40.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -7.21 -7.28 -6.58 -10.23 -9.76 -4.74 -8.09 -7.44 -7.42 -6.35 -8.14 -8.81



Difference from Measured ICR 6.66 4.33 1.51 -2.46 -26.92 5.22 3.13 4.34 5.71 7.51 4.13 3.34

Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

Providence Healthcare Risk Managers administered schemes community rate

fluctuate between R10.23 pbpm lower than expected and R8.81 lower than expected

due to their reported maternity rates; the slightly younger age group of these


schemes lead to the community rate between R25.21 and R12.52 pbpm lower than

expected.

1.18 Other Administrators

Figure 86: Price by age; Other Administrators (2007 )

Quarter EndREF CurvesOTHER ADMINISTRATORS

0

100

200

300

400

500

600

700

800

900

1,000

1,100

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


The administrators the category: Other Administrators include: HWH Integrated Risk

Management d/o Triangular Health (Pty) Ltd, Private Health Administrators and V

Medical Aid Administrators (Pty) Ltd. They do the administration for Pathfinder

Medical Scheme, Pharos Medical Plan and Selfmed Medical Scheme

The price by age remains close to the expected for most age bands with slight

variance within the age bands between 19 – 49 and 54 – 85+, which is due to the

fluctuations in total CDL conditions, which are reported at 78% of the expected in

June increasing to 80% in December. Multiple CDL conditions peaks in June at

114% of the expected, decreasing to 94% in December (Figure 86 above).


Figure 87: Other Administrators; community rate ana lysis

OTHER ADMINISTRATORS Community Rate Analysis

26.73 30.12 29.12 32.7127.99

42.1737.10 34.89

27.46

39.52 40.38 41.31

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -1.49 -0.46 0.64 -2.15 -7.85 0.05 3.21 1.39 -7.39 -2.24 -1.81 -2.29




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

26.73 30.12 29.12 32.7127.99

42.1737.10 34.89

27.46

39.52 40.38 41.31

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -1.49 -0.46 0.64 -2.15 -7.85 0.05 3.21 1.39 -7.39 -2.24 -1.81 -2.29




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

The schemes administered in this group have a community rate that fluctuates

between R7.85 pbpm lower than expected and R3.21 pbpm higher than expected

due to their reported maternity rates. Chronic diseases were reported at between

R24.37 and R13.65 pbpm lower than expected. The older age profile of this group

leads to the community rate being between R58.89 and R52.08 higher than

expected.

1.19 Other Small Administrators

Figure 88: Price by age; Other Small Administrators (2007)

Quarter EndREF CurvesOther small administrators

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th



The administrators for the schemes in the category Other Small Administrators

include Prosperity Health Managers and Thebe Ya Bophelo Healthcare.

The price by age curve for this group of schemes remain close to the expected in

most age bands for most quarters, with slight drop below the expected in the

reproductive age bands due to the lower than expected maternity and total CDL rates

for these age bands. The price by age curves in the age bands above 64 years are

slightly above the expected due to the rise in CDLs for those age bands (Figure 88).

The price by age curve for June rises to above the expected for the ages above 34

years, which is attributed to the following:

• Multiple CDL conditions reported at 234% of the expected in June to 135% in December.

• Ulcerative Colitis reported at 1834% of the expected in June to 6% in December.

• Chronic Renal Failure reported at 162% of the expected in June to 124% in December.

The schemes administered by these administrators were categorised as follows:

• Humanity Medical Scheme – category 9 • Renaissance Health Medical Scheme – category 3 • Thebemed – category 3 L for quarters 1, 2, 3, and category 9 for quarter 4.

Figure 89: Other Small Administrators; community ra te analysis

Other small administrators Community Rate Analysis

-36.63-34.05 -32.05 -29.96 -28.57

-3.53

-25.65-29.30 -29.23

-25.51-29.64 -29.69

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -1.52 -0.85 -3.63 -0.39 -1.50 -2.13 -3.58 -7.98 -8.07 -5.13 -8.28 -6.39

Due to Chronic Disease -7.94 -7.09 -3.64 -5.74 -3.97 20.88 -0.14 0.27 -0.01 0.57 -0.93 -2.80



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

-36.63-34.05 -32.05 -29.96 -28.57

-3.53

-25.65-29.30 -29.23

-25.51-29.64 -29.69

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity -1.52 -0.85 -3.63 -0.39 -1.50 -2.13 -3.58 -7.98 -8.07 -5.13 -8.28 -6.39

Due to Chronic Disease -7.94 -7.09 -3.64 -5.74 -3.97 20.88 -0.14 0.27 -0.01 0.57 -0.93 -2.80



Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

The schemes administered in the group “Other Small Administrators” has a

community rate that fluctuates between R8.28 and R0.39 pbpm higher than expected

due to maternity rates; chronic diseases were reported at R7.94 pbpm lower than


expected for January with an unusual spike in June to R20.88 higher than expected

dropping down to R2.80 lower than expected for December. The younger age profile

of this group leads to a community rate of between R27.18 and R2043 pbpm lower

than expected.

1.20 Self-administered schemes

Figure 90: Price by age; Self-Administered (2007)

Quarter EndREF CurvesSELF-ADMINISTERED

0

100

200

300

400

500

600

700

800

900

1,000

1,100

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Und

er 1

1-4

5-9

10-1

4

15-1

9

20-2

4

25-2

9

30-3

4

35-3

9

40-4

4

45-4

9

50-5

4

55-5

9

60-6

4

65-6

9

70-7

4

75-7

9

80-8

4

85+

Pric

e pe

r be

nefic

iary

per

mon

th


The schemes in the category Self-Administered include:

Bestmed Medical Scheme, Cape Medical Plan, De Beers Benefit Society, Genesis

Medical Scheme, Impala Medical Plan, Mascom, Medicover, Medihelp, Naspers

Medical Fund, Platinum Health, Rand Water Medical Scheme, Samwumed, Sedmed,

Telemed, Umvuzo Health Medical Scheme and Witbank Coalfields Medical Aid

Scheme.

The price by age curve for the schemes in this group remains close to the expected

for the age bands up to 64 years, with slight variation in the age bands 19 – 29 due to

higher maternity rates (Figure 90 above). The price by age then moves to above the

expected for the age bands above 65 years, which can be explained by the following:

• Bipolar Mood Disorder reported at 235% of the expected in March to 284% in December.

• Dysrhythmias reported at 168% of the expected in March to 182% in December.

• Hyperlipidaemia reported at 123% of the expected in March to 118% in December.


• Hypertension reported at 117% of the expected in March to 116% in December.

• Coronary Artery Disease reported at 120% of the expected in March to 115% in December.

• Maternity reported at 119% of the expected in March to 110% in December. • Multiple CDL conditions reported at 130% of the expected in March to 108%

in December. • Total CDL conditions reported at 130% of the expected in March to 133% in

December.

Figure 91: Self-Administered; community rate analys is

SELF-ADMINISTERED Community Rate Analysis

36.61 37.28 38.84 40.59 42.26 40.80

34.3237.21 37.44 39.15 39.14 38.19

0.005.00

10.0015.0020.0025.0030.0035.0040.0045.00

Jan-

2007

Feb

-200

7

Mar

-200

7

Apr

-200

7

May

-200

7

Jun-

2007

Jul-2

007

Aug

-200

7

Sep

-200

7

Oct

-200

7

Nov

-200

7

Dec

-200

7

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 4.07 1.48 3.00 0.40 3.47 1.42 0.98 2.91 0.23 2.38 2.84 1.52




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

36.61 37.28 38.84 40.59 42.26 40.80

34.3237.21 37.44 39.15 39.14 38.19

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

Jan-

07

Feb

-07

Mar

-07

Apr

-07

May

-07

Jun-

07

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Diff

eren

ce in

Pric

e pb

pm


Due to Maternity 4.07 1.48 3.00 0.40 3.47 1.42 0.98 2.91 0.23 2.38 2.84 1.52




Jan-2007

Feb-2007

Mar-2007

Apr-2007

May-2007

Jun-2007

Jul-2007

Aug-2007

Sep-2007

Oct-2007

Nov-2007

Dec-2007

The schemes in the group of Self-Administered schemes have a community rate that

fluctuates between a higher than expected rate between R4.07 and R0.40 pbpm due

to maternity rates; chronic diseases were reported at between R7.08 and R0.53

pbpm higher than expected and the schemes age profile contributes to a community

rate of between R33.25 and R31.76 pbpm higher than expected.

Annexures to the report on the analysis of REF shadow ... Equalisation Fund/Anne… · separate...

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