Yesterday I had such a good chuckle to myself while I was driving. Listening to the radio I heard an advert come on, and the CEO of Discovery Health Mr Adrian Gore was saying how easy it is for people to dismiss health insurance as an expensive cost they don’t actually need, when they are prepared to pay so much more for luxuries. He then hinted that Discovery has 2 million members, which I thought was quite a lot.
Just for my own amusement I then took out my calculator and multiplied half a million people by R1 600, which may be a reasonable monthly premium that the average Discovery member pays on their medical aid. Of course the real figure is much higher, but R1 600 was enough for my purpose. Guess what? My calculator returned this message “too large value entered”. Gees! Like, how much money IS this? Bringing out a more powerful calculator – which probably has more brain power than the idiot who captained the Titanic – I got a number back that read 800 000 000. Eight hundred million rand per month in revenues. At least. The company made R1.1 billion operating profit in its latest financial year, up 34% from the previous one.
Make what you will of these numbers, but that is a fair reflection of how much Discovery makes in monthly revenues. I have no clue how Discovery, or for that matter, any other medical aid scheme make their money. I assume they invest most of what we submit to them via debit orders every month, since only a small percentage of us claim back in hospital, sick, or operation fees etc. These schemes, interestingly referred to as such, basically “administer” money on your behalf, in case you need it. And you obviously can’t claim all of it back. The only time they can lose money is either through fraud or if they make very bad investment decisions, like putting your money through a pyramid scheme for example. It sounds to me like a financially awesome business to be in.
Here’s a quick suggestion for Discovery and other high-end medical aid providers. There are 47 million people living in Mzansi. Given that Discovery is the biggest of the lot, bigger than five or more of the next ones below it combined, you can do the sums and see how many don’t have medical aid. Like the Post Office Bank and the Mzansi initiative that were launched to bank the underbanked, medical aid schemes need to strive to give access to at least some of their essential services to those who really need them most; poor people. These folks need doctors’ fees, maternity support, medicines for their health, ARVs in some cases, etc. They are not asking “subsidised” gym membership or access to the latest movie showing at the cinema.
Imagine spreading just R20 million of R1.1 billion worth of health care among 30 million people, even 20 million individuals. Imagine that.
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