Prevention is better than cure

The answer is yes in the case of both healthy
and chronically ill policyholders, Emile Stipp, a fellow of the UK
Institute of Actuaries told delegates to the Actuarial Professions
Health and Care Conference held in Glasgow in May.

Stipp based his conclusion on data from more
than 900,000 members of South African insurer Discovery’s Vitality
Wellness Programme, a pioneer in the concept of programmes and the
largest wellness programme of its kind in the world.

The study revealed:

• Fitter people engaged in the programme had
9.6 percent fewer hospital admissions and stayed in hospital 0.57
days less than inactive patients; and

• Medical costs once hospitalised were
ZAR5,052 ($670) lower for highly active patients than inactive
patients.

Stipp noted that a UK study of 200,000 members
of the PruHealth Vitality Wellness Programme reflected similarly
positive results. PruHealth is a joint venture between Discovery
and UK insurer Prudential.

The extent of savings achieved depends to a
significant degree on the extent to which policyholders are
prepared to adopt lifestyle and health improvement practices
advised by the insurer. Stipp referred to this as the level of
policyholder engagement.

“Using similar risk adjustment techniques as
for South African studies, we have seen in-hospital private medical
insurance costs [in the UK] are lower by between 30 percent and 45
percent, depending on engagement,” said Stipp. “Out of hospital
costs are lower by between 2 per cent and 40 per cent, depending on
engagement.”

In essence the Discovery and PruHealth
Vitality programme encourage policyholders to improve their
lifestyles by, for example, quitting smoking, loosing weight or
joining a gym. Encouragement is provided to policyholders by way of
a points-based scheme that rewards them based on the extent to
which they strive to achieve a healthier lifestyle. The higher the
number of points earned, the bigger the discount offered on health
insurance premiums.

Discovery reinforces its reward scheme by
offering members of its Vitality Wellness programme discounts and
special offers on a wide range of products and services including
health foods, travel, hotel accommodation and Discovery-branded
credit cards.