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DISCOVERY LIMITED - Voluntary announcement: Discoverys view on the NHI Bill and the future role of medical schemes

Release Date: 16/08/2019 07:30
Code(s): DSY DSBP DSY03 DSY01 DSY02 DSY04     PDF:  
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Voluntary announcement: Discovery’s view on the NHI Bill and the future role of medical schemes

Discovery Limited
(Registration number 1999/007789/06)
(Incorporated in the Republic of South Africa)
JSE share code: DSY, DSBP
DSY ISIN: ZAE000022331
DSBP ISIN: ZAE000158564
JSE bond code: DSYI

Voluntary announcement: Discovery’s view on the NHI Bill and the future role of medical schemes

The National Health Insurance Bill (“the NHI Bill”) was published on 8 August 2019 and is available on
the website of South Africa’s National Department of Health. Discovery believes that the publication
of the NHI Bill creates a very important opportunity for active collaboration between the Department
of Health and the private healthcare sector, to ensure that the assets, skills and experience available
in the private healthcare system are maximally leveraged to ensure the success of the NHI roll out.

Discovery supports the drive towards ensuring that all South Africans have access to quality health
services based on need rather than affordability. Our position on NHI is unequivocal: we are
supportive of an NHI that assists in strengthening and improving the healthcare system for all South
Africans – little is more important. We are committed to assisting where we can in building it, and
making it workable and sustainable.

Our view is that substantially limiting the role of medical schemes would be counterproductive to the
NHI because there are simply insufficient resources to meet the needs of all South Africans - this is an
unavoidable reality. Crucially, by preventing those who can afford it from using their medical scheme
cover, the burden on the NHI will be increased and will drain the very resources that must be used for
people in most need. This would be detrimental to all South Africans, and would undermine the
objectives of the NHI as we understand it.

While this is our view, we are seeking clarity on the potential impact of the NHI Bill on the future role
of private healthcare and medical schemes – and what it means for medical schemes to
provide “complementary cover ” to the NHI. The NHI Bill makes the point that this “complementary
role” for medical schemes will only apply once the NHI is “fully implemented” and that it defines
“referral pathways” to which it will apply, indicating that where patients choose not to follow the
referral pathways, the NHI will not reimburse their care, and that they can then claim from private
health insurance. These elements of the NHI Bill all speak to a continued and important role for
medical schemes, and we will engage actively and constructively to make these points and to ensure
an ongoing critical role for medical schemes and for private healthcare providers as the process goes

We will actively engage in the forthcoming discussions on the NHI Bill, and we will do this directly, as
well as through the Health Funders Association and Business Unity South Africa. We intend to make
submissions on a wide range of issues raised by the NHI Bill, in the hope of making a constructive
contribution to improving the NHI Bill before it is finally promulgated into law. A key focus area for us
is the future role of medical schemes.

Importantly, we do not envisage any material impact on the medical scheme administration business
of Discovery Health for the foreseeable future. The roll out of the NHI is expected to take place over
an extended period, and will be constrained by the current fiscal position. In addition, as noted above,
the Bill remains open to interpretation regarding its impact on medical schemes, and we expect
medical schemes to continue operating alongside the NHI. We also think that once fully emerged, the
NHI will create additional opportunities for medical schemes to innovate in their products and for the
development of new health insurance products outside of the medical scheme environment.

16 August 2019

RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 16/08/2019 07:30:00
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