Expenditure on private hospitals annual inflation

Posted on 4 September 2012

The latest CMS (Council for Medical Schemes) annual report (2011/12) shows that medical scheme expenditure on private hospitals increased by 9,7%; from R30,8 billion in 2011 to R33,8 billion in 2012. Given the assertions made in this report about pricing in the private hospital sector, Mediclinic believes it is imperative to provide greater clarity on this issue.

There are three main components that drive expenditure in the medical scheme environment:

1. An increase in the number of medical scheme beneficiaries between 2010 and 2011,
2. An increase in private hospital tariffs (price)
3. An increase in the utilisation of private hospitals services (i.e. an increase in the admission rate and an increase in the average length of stay per admission)

Research has shown that an increase in utilisation is by far the greater driver of health care expenditure within the medical schemes environment. An increase in lifestyle diseases and the ageing profile of medical scheme beneficiaries has caused medical scheme members to make more frequent trips to private hospitals, and each time they are admitted, they are staying longer, according to figures compiled . The report found that hospital patient days per medical scheme beneficiary increased by 12.5 percent between 2006 and 2010.

In our article discussing the report, Mediclinic further analyses and responds to statements made by the CMS.

The information provided in this article was correct at the time of publishing. At Mediclinic we endeavour to provide our patients and readers with accurate and reliable information, which is why we continually review and update our content. However, due to the dynamic nature of clinical information and medicine, some information may from time to time become outdated prior to revision.