Discovery Limited · JSE:DSY
Discovery — Discovery Health Medical Scheme — Shareholder Meeting (June 2015)
109 slides from Discovery's shareholder meeting presentation, June 2015
Slide 1: 2015 Annual General Meeting
2015 Annual General Meeting June 2015 For the benefit of our members
Slide 2: Agenda
Agenda 1. Welcome and quorum 2. Minutes of the 2014 Annual General Meeting – for approval 3. 2014 Annual Financial Statements and Trustee Report 3.1 Financial performance of the Discovery Health Medical Scheme for the year ended 31 December 2014 3.2 Discovery Health (Pty) Ltd strategic focus areas 3
Slide 3: Agenda
Agenda 1. Welcome and quorum 2. Minutes of the 2014 Annual General Meeting – for approval 3. 2014 Annual Financial Statements and Trustee Report 3.1 Financial performance of the Discovery Health Medical Scheme for the year ended 31 December 2014 3.2 Discovery Health (Pty) Ltd strategic focus areas 3
Slide 4: Agenda
Agenda 1. Welcome and quorum 2. Minutes of the 2014 Annual General Meeting – for approval 3. 2014 Annual Financial Statements and Trustee Report 3.1 Financial performance of the Discovery Health Medical Scheme for the year ended 31 December 2014 3.2 Discovery Health (Pty) Ltd strategic focus areas 3
Slide 5: 2015 Annual General Meeting
2015 Annual General Meeting June 2015 Milton Streak, Principal Officer For the benefit of our members
Slide 6: Agenda
AGENDA 1 Continued sustainable growth 2 Financial strength and sustainability 3 Managing the cost of care 4 Operating and service performance 5 Governance
Slide 7: Discovery Health Medical Scheme Key Measures
Discovery Health Medical Scheme Key Measures Measure 2013 2014 % change Gross Contribution Income (R’000) 40 463 701 44 905 716 10.9% Number of members at year end 1 191 987 1 231 116 3.3% Number of lives at year end 2 564 313 2 634 819 2.7% Open scheme market share 52.3% 52.8% 0.96% Surplus (R’000)
Slide 8: Financial performance: Statement of Comprehensive Income
Financial performance: Statement of Comprehensive Income 2013 2014 Change (R’000) (R’000) Gross contribution income 40 463 701 44 905 716 7.2% Less savings contribution income (7 953 882) (8 794 716) Net contribution income 32 509 819 36 111 000 7.3% Relevant healthcare expenditure (26 230 531) (29
Slide 9: Agenda
AGENDA 1 Continued sustainable growth 2 Financial strength and sustainability 3 Managing the cost of care 4 Operating and service performance 5 Governance
Slide 10: DHMS continues to maintain strong membership growth
DHMS continues to maintain strong membership growth DHMS lives covered Dec 2014 May 2015 70 506 lives added to DHMS in 2014 2.63m lives 2.65m lives 1993 1994 1995 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 May-15 Source: DHMS data
Slide 11: Continued ability to attract relatively young members impacts positively on age profile
Continued ability to attract relatively young members impacts positively on age profile New lives present a healthy demographic profile DHMS remains younger than the industry 33.6 35.9 36.0 35.4 25.5 33.6 33.3 32.8 32.9 Average age of existing lives Average age of new lives 2011 2012 2013 2014 DHMS
Slide 12: Consistent pattern of stable plan distribution
Consistent pattern of stable plan distribution Stability in plan movements Downgrade Upgrade 2.1% 3.8% Downgrade Upgrade 2.1% 3.5% 2011 Downgrade Upgrade 3.2% 3.3% 2012 Downgrade Upgrade 3.2% 2.21% 2013 No change 94.1% 2014 No change 94.4% No change 93.6% No change Source: DHMS data 94.6%
Slide 13: Agenda
AGENDA 1 Continued sustainable growth 2 Financial strength and sustainability 3 Managing the cost of care 4 Operating and service performance 5 Governance
Slide 14: DHMS achieved regulatory solvency requirement in 2014
DHMS achieved regulatory solvency requirement in 2014, one year ahead of proposed solvency plan Reserves and solvency level 25.8% 24.3% 1.5 11.6 9.8 0.3 8.2 7.3 6.8 6.1 5.3 4.2 3.1 3.0 3.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014: 2014: Movements Reserves Net surplus (1.5) Other reserv
Slide 15: DHMS is well ahead of the solvency plan
DHMS is well ahead of the solvency plan and will maintain statutory 25% solvency requirement at the end of 2015 Solvency plan 27% 26% 26.4% 25.4% 24.25.7 3% 25% 25.8% 25.4% 24% 24.3% 24.3% 23.8% 23% 23.4% 23.4% 23.0% 22% 22.3% 21% 20% 31 Dec 2012 31 Dec 2013 31 Dec 2014 31 Dec 2015 Actual Target Pro
Slide 16: Continuous decrease in administration and managed care fees as a percentage of GCI
Continuous decrease in administration and managed care fees as a percentage of GCI since 2008 Administration and Managed Care as a percentage of gross contribution income 13.40% 13.10% 12.70% 12.01% 11.77% Other open 11.58% 24.3% 24.3% medical schemes 23.4% 10.98% DHMS 10.66% 10.60% 2008 2009 2010 2
Slide 17: Financial comparison of open medical scheme competitors - 2014
Financial comparison of open medical scheme competitors - 2014 Accumulated funds Net Healthcare Result Open Medical Scheme Net Growth (lives) per Regulation 29 Solvency % (R’000) (R’000) DHMS 70 506 753 191 11 566 971 25.8% Bestmed 8 104 (26 865) 1 044 959 27.0% Medihelp 2 421 (196 991) 1 043 825 27
Slide 18: DHMS offers members unparalleled benefit security
DHMS offers members unparalleled benefit security DHMS reserves remain higher than most other DHMS maintains AA+ credit rating open schemes combined GCR rating Open Medical Schemes Accumulated funds (per Regulation 29) AA+ Discovery Health Medical Scheme (R billion) 11.57 AA Medihelp | Fedhealth | M
Slide 19: Agenda
AGENDA 1 Continued sustainable growth 2 Financial strength and sustainability 3 Managing the cost of care 4 Operating and service performance 5 Governance
Slide 20: DHMS risk claims expenditure of R29.5 billion
DHMS risk claims expenditure of R29.5 billion Medicine – R3.4 bn 11% 552,000 lives registered for 31% chronic medication 49% 47% Hospitals – R13.8 bn 684,000 hospital 31% admissions pa 42% Professionals – R12.3 bn 6.7 million GP visits pa 5.1 million specialist visits pa
Slide 21: Significant value for members with complex and emergency healthcare needs
Significant value for members with complex and emergency healthcare needs Individual member claims paid in 2014 R 6.97m Age 4, Haemophilia R 5.7m Age 64, Malignant neoplasm treatment R 5.7m Age 44, Ear nose and throat disease R 2 489 R 5.3m Age 67, Respiratory failure risk contribution pampm R 4.4m
Slide 22: DHMS annual contribution increases consistently lower than other open schemes
DHMS annual contribution increases consistently lower than other open schemes since 2008 % annualised contribution increases relative to CPI (2008 – 2015) 6% 5.5% 5.5% 5% Average excl. DHMS: 4.4% 4.5% 4.1% 4.1% 4.1% 4.3% 3.9% 4% 3.5% 3.2% 3% 2% 1% 0% Medihelp DHMS Liberty Momentum Bonitas Sizwe Fedh
Slide 23: DHMS contributions are on average 14% lower
DHMS contributions are on average 14% lower Average contribution differential per principal member 24% 4,446 12% 3,374 14% 12% 8% 2,167 2,072 1,904 1,786 1,321 1,432 982 1,122 DHMS Next 9 largest DHMS Next 9 largest DHMS Next 9 largest DHMS Next 9 largest DHMS Next 9 largest open schemes open scheme
Slide 24: DHMS benefits focus on comprehensive cover for critical care
DHMS benefits focus on comprehensive cover for critical care In-hospital claims payout ratios (including medical specialists) Executive Classic Essential Coastal KeyCare 1% 2% 5% 7% 4% 99% 98% 95% 93% 96% Claims payout ratio Uncovered claims Source: DHMS data
Slide 25: Agenda
AGENDA 1 Continued sustainable growth 2 Financial strength and sustainability 3 Managing the cost of care 4 Operating and service performance 5 Governance
Slide 26: Scale of Discovery Health Medical Scheme operations
Scale of Discovery Health Medical Scheme operations In every working day* 158 2 760 Babies born Hospital admissions 192 000 R148 million Claims processed Paid out in claims 50 000 1 284 Calls handled New lives join the scheme *Assuming 249 working days in a year and 8 hours in a working day
Slide 27: Continuous measurement of service performance
8.4 8.6 8.7 8.8 8.9 9 9.1 8.5 Jul Aug Source: DH data Sep 2010 Oct Nov Dec Jan Feb Mar Apr May Jun 2011 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2012 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2013 Jul Member service perception Aug Increasing member perception Sep Oct Nov Dec Jan Feb Con
Slide 28: Increasing quality of service
Increasing quality of service Decreasing defects per million opportunities (DPMO) Discovery Health (Overall) DPMO 8000 7000 6000 5000 4000 3000 2000 1000 0 Dec Dec Dec Sep Dec Sep Sep Sep May Oct Mar May Feb Mar May Jan Oct Mar May Jan Oct Jan Oct Feb Apr Feb Apr Apr Aug Aug Aug Aug Nov Nov Nov Nov
Slide 29: Agenda
AGENDA 1 Continued sustainable growth 2 Financial strength and sustainability 3 Managing the cost of care 4 Operating and service performance 5 Governance
Slide 30: Governance structure
Governance structure DHMS Board of Trustees Clinical Risk Stakeholder Governance Remuniration Product Committee relations Committee Committee Committee Committee Disputes Audit Investment Nominations Non-healthcare Committee Committee Committee Committee expenses Committee Scheme office
Slide 31: Discovery Health Medical Scheme Board of Trustees
Discovery Health Medical Scheme Board of Trustees Mr Michael du Plessis van Ms Daisy Naidoo Dr Nozipho der Nest (SC) Trustee Sangweni Chairman Occupation: Chartered Accountant Independent co- CA(SA), Masters of Accounting (Taxation) Occupation: Senior Counsel opted member BA (Law) LLB - University o
Slide 32: DHMS impact on Stakeholders
Increased focus on stakeholder engagement plans A strong focus on members as stakeholders is reducing council complaints Board of Trustees Competitors Employees 10 Administrator Healthcare Providers Members 9 Suppliers Regulator Manage closely 8 Media DHMS impact on Stakeholders 7 Department of Keep
Slide 33: A strong focus on members is reducing council complaints
A strong focus on members is reducing council complaints Complaints per thousand beneficiaries for DHMS CMS complaints per 1000 beneficiaries for DHMS Ten open schemes with highest number of 0.6 valid complaints per 1 000 beneficiaries 0.55 2013 0.5 Resolution Health Medical 3.5 Scheme 0.4 0.38 Desp
Slide 34: Best Practice Governance in Outsourced Business Models
Best Practice Governance in Outsourced Business Models Governance model Relational Governance Discovery Health Discovery Health Medical Scheme (Pty) Ltd Integrated operating model Transactional Governance
Slide 35: Long-term Vested Outsourcing Business Model
Long-term Vested Outsourcing Business Model The model promotes five basic tenets 03 02 Clearly defined and 04 Contracts focus measurable Pricing model on what to outcomes ensures optimal achieve trade-offs 01 05 Relationship Governance focused on Member value structures provide outcomes effective ov
Slide 36: Strategic Priorities for 2015
Strategic Priorities for 2015 The Scheme will focus on the following key strategic objectives during 2015 01 02 03 Evaluate and Ensure best enhance the Scheme’s To maintain the practice outsourcing business Clinical Governance Scheme’s industry Risk Committee governance and Committee model based on
Slide 37: 2015 Annual General Meeting
2015 Annual General Meeting June 2015 Milton Streak, Principal Officer For the benefit of our members
Slide 38: Agenda
Agenda 1. Welcome and quorum 2. Minutes of the 2014 Annual General Meeting – for approval 3. 2014 Annual Financial Statements and Trustee Report 3.1 Financial performance of the Discovery Health Medical Scheme for the year ended 31 December 2014 3.2 Discovery Health (Pty) Ltd strategic focus areas 3
Slide 39: Discovery Health presentation to DHMS AGM
Discovery Health presentation to DHMS AGM Dr Jonathan Broomberg – CEO Discovery Health 25th June 2015
Slide 40: To make people healthier and enhance and protect their lives
To make people healthier and enhance and protect their lives
Slide 41: Agenda
AGENDA 1. MACRO FORCES IMPACTING HEALTH SYSTEMS 2. DISCOVERY HEALTH STRATEGIC FOCUS FOR DHMS 3. INVESTING IN A WORLD-LEADING HEALTHCARE SYSTEM
Slide 42: Cost of Healthcare: costs continue to increase faster than CPI
1. COST OF HEALTHCARE | Healthcare costs continue to increase faster than CPI 5 year average annualised inflation rates (2010-2014) 10.6% 1.6% 2.9% 0.7% 5.3% CPI Tariffs Demand side utilisation Supply side utilisation Medical inflation 1 Tariffs 2 Demand-side drivers : 3 Supply-side drivers: Hospita
Slide 43: Technology: advancements create new opportunities and challenges
2. TECHNOLOGY | Technological advancements create new opportunities and challenges Disruptive service enablers Wearable health and fitness devices Proliferation of devices, and increased connectivity
Slide 44: Technology: Growing Impact of High Cost Medicines
2. TECHNOLOGY | Growing Impact of High Cost Medicines High cost medicines entering the Increasing incidence of ultra high-cost medicine market in large numbers claimants 10X Increase in ultra high-cost claimants since 2008 Effective New treatment for treatment for Hepatitis C Malignant Melanoma 69 m
Slide 45: Quality of Care: opportunity to improve the healthcare system
3. QUALITY OF CARE | Opportunity to improve the healthcare system for the benefit of patients DHMS experience (2012/13) Significant variations in cost of end of life care by region End of life cost PLPM per region in last 6 months 59% Children with Upper Respiratory Viral illness before death on ant
Slide 46: Regulatory Environment
4. REGULATORY ENVIRONMENT National Health Insurance • Still awaiting NHI White Paper • Mixed results from pilot districts • Significant fiscal pressure on funding the NHI Competition commission’s market inquiry into private healthcare • Received 68 stakeholder submissions • Industry responding with
Slide 47: Agenda
AGENDA 1. MACRO FORCES IMPACTING HEALTH SYSTEMS 2. DISCOVERY HEALTH STRATEGIC FOCUS FOR DHMS 3. INVESTING IN A WORLD-LEADING HEALTHCARE SYSTEM
Slide 48: 2014 Key facts and figures
DISCOVERY HEALTH MEDICAL SCHEME 2014 Key facts and figures: a year of outstanding scheme performance 3.3% 33.58 2 634 819 increase membership 4.5% average age of lives covered lapse rate 1 284 beneficiaries new lives per day AA+ R R R R11.7 billion 52.8% in reserves AA+ 96.9% Open medical scheme cre
Slide 49: Key Strategic Focus Areas for DHMS
Discovery Health Key Strategic Focus Areas for DHMS – Develop a Value Driven Healthcare System BETTER HEALTHCARE Access to extensive care, support and the latest medical technologies when members need it most BETTER HEALTH Comprehensive, integrated wellness offerings that help members understand and
Slide 50: Key Strategic Focus Areas for DHMS
Discovery Health Key Strategic Focus Areas for DHMS – Develop a Value Driven Healthcare System BETTER HEALTHCARE Access to extensive care, support and the latest medical technologies when members need it most BETTER HEALTH Comprehensive, integrated wellness offerings that help members understand and
Slide 51: Strategic Approach to Delivering Better Healthcare
Discovery Health’s Strategic Approach to Delivering Better Healthcare Member segmentation by clinical severity enables appropriate and effective interventions 2% Complex Care condition coordination 8% HIV Cardiac failure Managed Care Renal failure Oncology Significant chronic condition Programmes Di
Slide 52: Care Co-ordination Programme impacting quality and cost of care
Discovery Health Care Co-ordination Programme impacting on quality and cost of care Improved quality Lower cost per event Decreased hospital admissions Cost 33% 67% index % admissions 50% 16% Normal Patient 15% 1.5 1.51 14% 12% 12% 1.3 10% 10% 34% 8% 1.10 6% 1.1 6% CCP Patient 1.00 4% 1.00 Mobility
Slide 53: Personal Health Programmes - Partnering with GPs
Personal Health Programmes - Partnering with GPs to Improve the Management of Chronic Disease Access to online Additional risk Access to Earns additional lifestyle benefits from DHMS comprehensive Vitality points programme with dashboard to relevant alerts monitor progress Member Track and View heal
Slide 54: Discovery HomeCare Offers High Quality Home-based Care
Discovery HomeCare Offers High Quality Home-based Care Patients receiving care per month Unique, home-based healthcare service Key Services Offered Highest enrolment: IV Treatment Post- natal care Wound Palliative Care care IV Treatment Respite Home IV Respite Care infusions End-of-Life Wound Care P
Slide 55: Key Strategic Focus Areas for DHMS
Discovery Health Key Strategic Focus Areas for DHMS – Develop a Value Driven Healthcare System BETTER HEALTHCARE Access to extensive care, support and the latest medical technologies when members need it most BETTER HEALTH Comprehensive, integrated wellness offerings that help members understand and
Slide 56: Vitality impacts very positively on health engagement levels
Vitality impacts very positively on overall health engagement levels 1 1,225 members completed a 70,000 gym workouts 32,000 HealthyFood health check every day every day baskets purchased every day
Slide 57: Vitality Engagement Improves Health Outcomes
Vitality Engagement Improves Health Outcomes 1 Lower admission rates 2 Shorter hospital stays 3 Lower healthcare costs Not registered Not registered 100% 100% 105% Not registered 100% 90% 95% 95% 90% 80% 90% 85% 70% 85% 80% 60% 80% Inactive Low Medium High Inactive Low Medium High Inactive Low Mediu
Slide 58: Vitality Engagement and Development of Lifestyle Diseases
Correlation Between Vitality Engagement and Development of Lifestyle Diseases Engaged Vitality members are less likely to develop a chronic disease Lifestyle Chronic Incidence by Earned Status Lifestyle Chronic Incidence by Earned Status Male Female 8.00% 6.00% 6.00% 4.00% 4.00% 2.00% 2.00% 0.00% 0.
Slide 59: Positive Impact of Vitality on DHMS and on Members
Positive Impact of Vitality on Discovery Health Medical Scheme and on Members Member: Classic Saver Scheme Annual savings to DHMS due to Vitality (R million) R 185 R 400 969 R 400 822 715 730 R 300 R 2,172 42% effective reduction in 391 monthly health plan R 1,257 264 premium Classic Saver Vitality
Slide 60: Key Strategic Focus Areas for DHMS
Discovery Health Key Strategic Focus Areas for DHMS – Develop a Value Driven Healthcare System BETTER HEALTHCARE Access to extensive care, support and the latest medical technologies when members need it most BETTER HEALTH Comprehensive, integrated wellness offerings that help members understand and
Slide 61: Lower Cost Inflation than all Other Open Medical Schemes
Lower Cost Inflation than all Other Open Medical Schemes Open Schemes excluding Discovery Health Medical Scheme (% growth in pabpm costs – 2008 baseline) Discovery Health Medical Scheme (% growth in pabpm costs – 2008 baseline) Weighted average Weighted average 2013 = 27.0% 2013 = 40.3% Pathologists
Slide 62: Significant increase in fraud recoveries and savings
Significant increase in fraud recoveries and savings 19% increase in fraud and forensic savings in 2014 (R’million) 19% 323 13% 270 87% 238 128 2011 2012 2013 2014
Slide 63: Members obtaining value from exclusive Discovery Health partnerships
DHMS members obtaining significant value from exclusive discovery health partnerships Discovery members saved ~R95m in 2014 through discounts from Discovery Health partners HEALTHYCARE STEM CELL OPTOMETRY CRYOGENICS 10% 20% 25% back on HealthyCare items on frames and lenses through our on umbilical
Slide 64: Integrated into the medicine value chain
Discovery Health has integrated into the medicine value chain to benefit DHMS members Southern Rx creates further opportunities to save costs for DHMS SEP negotiation MedXpress Southern Rx 27% reduction in members with Southern Rx co-payments Home Work Holiday Current cost: Current cost: R400 000 pe
Slide 65: Cost and quality improvement projects using bundled payments
Several cost and quality improvement projects with specialist groups using bundled payments SASCI Project Doctor Guided Funding Model for Coronary Artery Disease ~40 participating Increased awareness 30% increase in CTCA cardiologists (of & changing behaviour rate eligible 150) or incentives 16% Ane
Slide 66: Key Strategic Focus Areas for DHMS
Discovery Health Key Strategic Focus Areas for DHMS – Develop a Value Driven Healthcare System BETTER HEALTHCARE Access to extensive care, support and the latest medical technologies when members need it most BETTER HEALTH Comprehensive, integrated wellness offerings that help members understand and
Slide 67: Continuous Measurement of Operational Performance
Continuous Measurement of Operational Performance Member Perception Quality of Service (Service rating out of 10) (Defects per Million Opportunities) 9.1 8000 9.0 7000 6000 8.9 5000 8.8 4000 8.7 3000 8.6 2000 8.5 1000 8.4 0 Feb Apr Feb Apr Feb Apr Feb Apr Feb Apr Jul Jun Jun Jun Jun Sep Oct Nov Jul
Slide 68: Service Innovation: Voice Biometrics
Service Innovation: Voice Biometrics The FIRST in our industry in South Africa Voice biometric technology analyses the customer’s voice and compares it to a voiceprint on file Clients no longer need to answer security verification questions Increased level of security 80% Faster authentication 99% A
Slide 69: Agenda
AGENDA 1. MACRO FORCES IMPACTING HEALTH SYSTEMS 2. DISCOVERY HEALTH STRATEGIC FOCUS FOR DHMS 3. INVESTING IN A WORLD-LEADING HEALTHCARE SYSTEM
Slide 70: Deloitte global medical scheme benchmarking exercise
Deloitte conducted a global medical scheme benchmarking exercise DKV (Ergo) Achmea Central (Generali) VGZ Allianz Menzis Debeka Benchmark categories CZ AXA Statutory solvency requirement Operating surplus Market share Growth in market share Growth in members Average claim increases Average
Slide 71: South Africa Well Positioned with High Income Country Counter-parts
On a Country Level, South Africa is Well Positioned with High Income Country Counter-parts 28 Germany 32 31 Australia 30 25 USA 28 25 2009 South Africa 28 2013 - Netherlands 27 22 India 24 25 Brazil 21 * Included the top 20 medical schemes globally and the next 5 in South Africa that did not make th
Slide 72: DHMS Ranking as One of the Top 3 Schemes Globally
DHMS has Consistently Performed Well, Ranking as One of the Top 3 Schemes Globally 1st Comparative ranking 2nd of the top 20 3rd DHMS 4th schemes globally, and 5th the aggregated next 6th 5 in South Africa, 7th over the period 2006- 8th 2013 9th 10th 11th Next 5 SA 12th schemes 13th 14th 15th 16th 1
Slide 73: DHMS Ranked in the Top 3 Across the Twenty Best Global Schemes
DHMS was Ranked in the Top 3 Across the Twenty Best Global Schemes Comparative ranking DKV (Ergo) 35 of the top 20 Central (Generali) 34 DHMS schemes globally, and 33 Allianz 33 the aggregated next United Healthcare Group 32 5 in South Africa, in Debeka 31 2013 AXA 30 HCF 30 MPL (Medibank) 30 Achmea
Slide 74: Investing in a World-leading Healthcare System
Investing in a World-leading Healthcare System for the Benefit of DHMS Members Building Healthier 214 Personal Health Communities innovations Programmes HomeCare 1. Investing in people since 2004 Voice Biometrics Discovery External medical items My Doctor Foundation 162 Discovery Health Preferred On
Slide 75: Delivering Personalised Healthcare and Service Journeys
Delivering Personalised Healthcare and Service Journeys Personalised Medicine Improved healthcare World leading outcomes genomics screening for members Doctor tools
Slide 76: Delivering Personalised Healthcare and Service Journeys
Delivering Personalised Healthcare and Service Journeys Personalised Healthcare Journeys Personalised Service Journeys My Doctor Online Virtual consultations Claims Summary through the member app Search functionality Paid from day-to-day benefits Claims breakdown Book your family doctor appointment
Slide 77: Considerable Investment in state-of-the-art systems
Considerable Investment in state-of-the-art systems for DHMS Ongoing investment in resources and Example: Benefit Management System infrastructure • Scalable, flexible architecture built for speed: • > 150,000 claims per day • < 3.5 seconds for Pharmacy (real-time) claims • >R500m per annum in techn
Slide 78: Ensuring the Financial Security of DHMS
Ensuring the Financial Security of DHMS on an Ongoing, Sustainable Basis Member Reserve Build-up Absolute Growth (R billion) 26.4% 2,662,208 AA+ 25.7% Credit Rating 13.3 24.3% 11.6 9.8 8.2 7.3 6.8 6.1 5.3 4.2 3.0 May-15 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2006
Slide 79: Giving Members the Opportunity to Join DHMS Through Channel of Choice
Giving Members the Opportunity to Join DHMS Through the Channel of Their Choice DHMS continues to maintain an excellent Direct marketing channel demographic profile Volume of applications processed through the New joiners present DHMS remains younger direct channel: younger demographic than industry
Slide 80: Delivering a World-leading Healthcare System at the Lowest Cost
Delivering a World-leading Healthcare System at the Lowest Cost to Members of the Discovery Health Medical Scheme Savings to members as a result of DHMS’s DHMS Premium Inflation Differential lower contribution increases 6.0% 5,000 Increases relative to CPI Next 10 4,500 5.0% Next 10 14% 4,000 4.0% D
Slide 81: Cost of Delivering World-leading Healthcare System Reduces in Real Terms
Cost of Delivering World-leading Healthcare System Reduces in Real Terms over Time Administration and managed care fees as a Reduction in administration and managed care percentage of gross contribution income fees pabpm in real terms 13.40% 154 13.00% 120 Open schemes 105 excl. DHMS 11.80% 11.00% 1
Slide 82: Delivering a World-leading Healthcare System for DHMS
Delivering a World-leading Healthcare System for DHMS Significant system development and Personalised Healthcare Journeys Personalised Service Journeys technology investment >R500m per annum Savings to members as a result of Administration and managed care fees Investing in the broader healthcare DH
Slide 83: Agenda
AGENDA 1. MACRO FORCES IMPACTING HEALTH SYSTEMS 2. DISCOVERY HEALTH STRATEGIC FOCUS FOR DHMS 3. INVESTING IN A WORLD-LEADING HEALTHCARE SYSTEM
Slide 84: Discovery Health presentation to DHMS AGM
Discovery Health presentation to DHMS AGM Dr Jonathan Broomberg – CEO Discovery Health June 2015
Slide 85: Agenda
Agenda 1. Welcome and quorum 2. Minutes of the 2014 Annual General Meeting – for approval 3. 2014 Annual Financial Statements and Trustee Report 3.1 Financial performance of the Discovery Health Medical Scheme for the year ended 31 December 2014 3.2 Discovery Health (Pty) Ltd strategic focus areas 3
Slide 86: Agenda
Agenda 1. Welcome and quorum 2. Minutes of the 2014 Annual General Meeting – for approval 3. 2014 Annual Financial Statements and Trustee Report 3.1 Financial performance of the Discovery Health Medical Scheme for the year ended 31 December 2014 3.2 Discovery Health (Pty) Ltd strategic focus areas 3
Slide 87: Discovery Health Medical Scheme Remuneration Policy
Discovery Health Medical Scheme Remuneration Policy Noel Graves SC – Member of the Remuneration Committee 25 June 2015 For the benefit of our members
Slide 88: Agenda
Agenda 1 Remuneration governance 2 Trustee Remuneration Policy • Remuneration of the Board of Trustees • Remuneration methodology • Market benchmarking 3 Proposed 2015 Trustee remuneration • Trustee • Chairpersons
Slide 89: Agenda
Agenda 1 Remuneration governance 2 Trustee Remuneration Policy • Remuneration of the Board of Trustees • Remuneration methodology • Market benchmarking 3 Proposed 2015 Trustee remuneration • Trustee • Chairpersons
Slide 90: Remuneration Governance
Remuneration Governance The Board of Trustees is responsible for the development and implementation of a Remuneration Policy for Scheme employees as well as the Board of Trustees and Board Committee members. The Board of Trustees has delegated the responsibility of Scheme remuneration oversight
Slide 91: Remuneration Governance
Remuneration Governance Adoption and Approval of Remuneration Trustees remuneration - presented at this AGM for majority vote by members after the approval thereof by the Board of Trustees on recommendation of the REMCO. REMCO makes use of independent expert consultants and independent market be
Slide 92: Agenda
Agenda 1 Remuneration governance 2 Trustee Remuneration Policy • Remuneration of the Board of Trustees • Remuneration methodology • Market benchmarking 3 Proposed 2015 Trustee remuneration • Trustee • Chairpersons
Slide 93: Remuneration of the Board of Trustees
Remuneration of the Board of Trustees Annual Trustee fees are split into: Annual base fee paid quarterly in arrears; Meeting fee; In the event of non-attendance of a meeting the meeting fee is not paid. Trustee training Trustees are NOT paid for attending training or conferences over and
Slide 94: Remuneration Methodology
Remuneration Methodology CMS issued Circular 41 of 2014 providing guidelines to Medical Schemes on Trustee remuneration. The DHMS REMCO engaged PwC’s Remuneration Practice to assist in developing a new remuneration methodology and benchmark applicable to Trustees, taking into account that DHMS i
Slide 95: Remuneration Benchmarking
Remuneration Benchmarking Circular 41 of 2015 – Schemes were advised not to use the remuneration benchmarking of non- executive directors of listed companies. DHMS’ new market benchmarking methodology (developed by PwC) Professional fees/rates for professionals in the fields of law, actuarial
Slide 96: Agenda
Agenda 1 Remuneration governance 2 Trustee Remuneration Policy • Remuneration of the Board of Trustees • Remuneration methodology • Market benchmarking 3 Proposed 2015 Trustee remuneration • Trustee • Chairpersons
Slide 97: Remuneration Implementation: Multi Year Correction
Remuneration Implementation: Multi Year Correction based on New Methodology 2015 Professional fee (hourly rate) benchmark R4000 less 40% 2016 Professional fee benchmark Fee less 35% 2017 Professional fee benchmark Fee less 30% 2018 onwards – annual fee benchmark Fee less 30% The tota
Slide 98: Professional Fee Build-Up for 2015 - Trustees
Professional Fee Build-Up for 2015 - Trustees The table below provides an overview of the 2015 proposed Trustee remuneration and is based on the methodology as discussed in the Remuneration Policy. Proposed fee build up for the remuneration of Trustees Preparation for Board meetings 8 Attendance at
Slide 99: Professional Fee Build-Up for 2015 – Chair of a Board Committee
Professional Fee Build-Up for 2015 – Chair of a Board Committee The table below provides an example of the 2015 proposed remuneration calculation for a Chair of a Board Committee* and is based on the methodology as discussed in the Remuneration Policy. Proposed fee build up for the remuneration of a
Slide 100: Professional Fee Build-Up for 2015 – Board Chairman
Professional Fee Build-Up for 2015 – Board Chairman The table below provides an overview of the 2015 Proposed Chairman’s remuneration and is based on the methodology as discussed in the Remuneration Policy. Proposed fee build up for the remuneration of the Chairman of the Board of Trustees Additiona
Slide 101: Discovery Health Medical Scheme Remuneration Policy
Discovery Health Medical Scheme Remuneration Policy Noel Graves SC – Member of the Remuneration Committee 25 June 2015 For the benefit of our members
Slide 102: Agenda
Agenda 1. Welcome and quorum 2. Minutes of the 2014 Annual General Meeting – for approval 3. 2014 Annual Financial Statements and Trustee Report 3.1 Financial performance of the Discovery Health Medical Scheme for the year ended 31 December 2014 3.2 Discovery Health (Pty) Ltd strategic focus areas 3
Slide 103: Agenda
Agenda 1. Welcome and quorum 2. Minutes of the 2014 Annual General Meeting – for approval 3. 2014 Annual Financial Statements and Trustee Report 3.1 Financial performance of the Discovery Health Medical Scheme for the year ended 31 December 2014 3.2 Discovery Health (Pty) Ltd strategic focus areas 3
Slide 104: Appointment of Chairman
Discovery Health Medical Scheme Appointment of Chairman Advocate Michael Van Der Nest SC Qualification: BA (Law), LLB (Stellenbosch) Experience: 29 years in private practice 15 years as Senior Counsel and occasional Acting Judge of the High Court of South Africa Mr Van Der Nest, SC, has been in priv
Slide 105: Agenda
Agenda 1. Welcome and quorum 2. Minutes of the 2014 Annual General Meeting – for approval 3. 2014 Annual Financial Statements and Trustee Report 3.1 Financial performance of the Discovery Health Medical Scheme for the year ended 31 December 2014 3.2 Discovery Health (Pty) Ltd strategic focus areas 3
Slide 106: Motion 1
Motion 1 In view of the Chairman of the Council for Medical Schemes having found voting via proxies garnered from interested and associated parties of the administrator an “undesireable“ practice and some members of the Board of Trustees having been elected due to such practices, the members call up
Slide 107: Agenda
Agenda 1. Welcome and quorum 2. Minutes of the 2014 Annual General Meeting – for approval 3. 2014 Annual Financial Statements and Trustee Report 3.1 Financial performance of the Discovery Health Medical Scheme for the year ended 31 December 2014 3.2 Discovery Health (Pty) Ltd strategic focus areas 3
Slide 108: Agenda
Agenda 1. Welcome and quorum 2. Minutes of the 2014 Annual General Meeting – for approval 3. 2014 Annual Financial Statements and Trustee Report 3.1 Financial performance of the Discovery Health Medical Scheme for the year ended 31 December 2014 3.2 Discovery Health (Pty) Ltd strategic focus areas 3
Slide 109: For the benefit of our members
2015 Annual General Meeting June 2015 For the benefit of our members
Discovery Health Medical Scheme — Shareholder Meeting (June 2015) on 6ix