Monthly Archives: July 2017

The diagnosed and the undiagnosed

A friend was on holiday in a small town when her baby’s scheduled immunisation was due. After being directed to the local clinic who had the stock of the required vaccination, she duly fell in line with other patients to open a new clinic file. Although it seemed that many patients waiting in the queue could read, the clinic assistant in charge was adamant on reading the questions and completing the forms on their behalf.

“Do you have disabilities?” It would thunder through the room, and so forth. By the time it was my friend’s turn, she insisted on reading the questions herself. And to her surprise, the “disabilities” everybody was questioned about, turned out to be “diabetes”. None of those in front of her had disabilities, but should they have been questioned correctly, they could have confirmed their diabetic status.

Among the top five most prevalent chronic conditions

Diabetes is one of the world’s fastest growing lifestyle diseases. In 2015 South Africa had 2.28 million cases of diabetes according to the International Diabetes Federation (IDF). The problem is that for every diagnosed adult, there is an estimated one undiagnosed adult. The number of undiagnosed cases in South Africa is projected at around 1.39 million.

Both diabetes mellitus types 1 and 2 rank among the top five most prevalent chronic conditions under medical scheme members.

Although it is one of the most prevalent conditions and the coverage ratio for medical scheme members with Diabetes mellitus Type 2 is slowly increasing, the coverage still seems to be low.

The proportion of Diabetes mellitus type 2 patients claiming for chronic disease medicine was a mere 28.8{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b} in 2015, the Council of Medical Schemes Annual Report shows.

The coverage of monitoring tests, such as the creatinine test was 33{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b} in 2015 and coverage for the HbA1c test was 26.2{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b}. It was at similar levels the previous years.

This is despite Diabetes insipidus and Diabetes mellitus types 1 and 2 being covered as chronic conditions under prescribed minimum benefits (PMBs). This means that medical schemes must cover costs of all members who suffers from diabetes, regardless of their benefit option.

Use your medical scheme benefits

Schemes usually have screening benefits to diagnose diabetes as well as wellness and chronic illness treatment programmes for affected members.

Plans for chronic conditions typically involve consultations with doctors, blood tests, treatments and medication.

“Diabetes treatment programmes generally include two GP consultations, which are often used to renew prescriptions for the next six months; 2 specialist consultations; and blood tests,” says Deon Heydenrych of Stapleford Insurance Brokers.

Even though an illness is a PMB, medical schemes can have their own cost-effective measures, such as lists of medication and designated service provider consultations which are covered without any excess.

This is where confusion about cover often kicks in. It means that if the scheme member decides to use a different service provider or medicine, the cost will only be covered up to a limit and the member will be responsible for the rest.

Heydenrych says it is also crucial that members register their chronic illness with the scheme. Only if you are registered as a chronic illness sufferer you will be able to receive all the benefits.

“If you need more than the provided two consultations or blood tests, your doctor can motivate a request that the scheme will cover the costs of those.”

To ensure that you don’t end up paying unnecessarily, it is also important that doctors provide the correct ICD-10 codes and procedure codes on accounts. These codes indicate which health conditions have been treated. If these are incorrect the fund may refuse to pay and the member will have to cover the costs out of their day to day benefits or own pocket.

Furry news on the diabetes front

Enter Honey, the first officially certified Medical Alert Dog to be trained in South Africa.

Medic Alert Dogs for diabetics are specifically trained to alert diabetic handlers in advance of low or high blood sugar events, before a dangerous situation can occur. In fact, by using their incredible sense of smell, these dogs can sniff out any changes in their owner’s glucose level up to 30 minutes before a blood glucose monitor.

Honey belongs to twelve-year-old Duncan Smuts, who was diagnosed with Type 1 diabetes when he was 3 years old. She has already woken him up due to a drop in his sugar levels.

With more training, her ability to detect the smell of a hypoglycaemic episode will become stronger and more reliable, says her trainer, Lucy Breytenbach, a behaviour practitioner with a BSc (Hons) degree in Animal Science, Behaviour and Welfare.

Data burning a deeper hole in the pockets of South Africans

In the wake of the DataMustFall campaign, it seems that the data revolution might have a valid and legitimate plea. The campaign founders made a presentation before the Parliamentary Communications and Postal Committee on September 21 on the costs of data in the country. According to the soon-to-be launched findings of the FinScope South Africa 2016 consumer survey, the results show that the average South African spends about 9{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b} of their purse on airtime and data recharge, cellphone contracts, telephone lines and internet payments. The average person spends approximately R700 a month for communication-related expenses.

Parallel to the #DataMustFall campaign, which is gaining traction, is the #FeesMustFall (reloaded) campaign, which is also resurfacing in light of the announcement of an up to 8{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b} fee increase made by the Higher Education Minister Blade Nzimande. While university students would like to see a 0{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b} increase, universities are requesting increases to sustain operations and fund research.

Therefore, in light of these developments and expenses, how does the purse of the South African consumer fair? The preliminary results of the FinScope 2016 survey shows that South Africans spend R688 per month on average on education.

The FinScope findings further show that South Africa’s total personal monthly consumption (PMC) expenditure in 2016 is estimated at R220 billion (monthly). On a monthly basis, the average individual spent approximately R5 400 during the period of conducting the FinScope 2016 survey. The results show that the main components of expenditure are on food (21{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b}), transport (11{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b}), utilities (11{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b}) and communication, which amount to 9{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b} of the spending purse.

Overall, individuals’ spending on education is 6{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b} of their purse (estimated monthly spend of R12.2 billion). Further demographic analysis of the data per race showed that black communities still bear the greatest brunt of the education costs. For the average black South African, education expenses constitute 7{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b} of their purse – this is higher compared to other races for which the purse composition for coloured, Asian, Indian and whites are at an average of 4.3{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b} of their purse.

Furthermore, as one analyses the data further, it shows that nearly 12 million black South Africans spend more than 10{915f2fd5aca4c3a34c5cb69d7973bd97975047c315a8e3a00cfb3db88c0fb71b} of their purse on education-related expenses. This is further exacerbated when noting that the average income per month is R4 723, R6 294, R12 265 and R17 123 for black, coloured, Indian and white South Africans respectively. As such, the cost of education places a heavier burden on black South Africans.

Finance will be more competent than my white counterpart

Luthuli Capital was founded and structured as a Pan-African multi specialist company that offers a global approach to wealth management portfolios. The company offers investment advisory services to local and foreign individuals and multinationals, among others. I’m joined in the studio by one of the co-founders, Mduduzi Luthuli. Thank you so much for your time.

MDUDUZI LUTHULI:  Thank you for the invitation. Glad to be here.

NASTASSIA ARENDSE:  Let’s take it back to the beginning and start off with how Luthuli Capital came together.

MDUDUZI LUTHULI:  I think if you are going to start a company it’s always something that’s there. It’s just a matter of acquiring the skills for you to be confident to run the company and wait for the circumstances to be there.

I’ve been in the corporate sector now – from banking into the financial advisory industry – for about seven years. My previous employer gave me a great opportunity in management and it’s really there where I got to cut my teeth and get to the point where I realised I think it’s time for me to go out there and do this on my own.

We’ve got two offices here in Sandton and one in Durban. It really was the Durban office that was also the big motivator because we’ve got a project going on down there which involves the internship, and that also just got to that point where, if ever you are going to do this, this is the time.

NASTASSIA ARENDSE:  And I know that you work with Trudy as well. How did the two of you decide that it’s our synergies and both our characteristics and everything we’ve learned from our own sort of corporate size that can work together – and let’s do this?

MDUDUZI LUTHULI:  We both come from the same industry. So from a product knowledge side, services, the competency was there. I think really where the synergy comes from is they say I’m the driving force, I’m the bully, I’m the hard-core one. My real talent is bringing the clients into the business, going out there and selling the dream and convincing them that this is something you should back.

And Trudy, as head of client services, is the mother of the business, if I can put it that way. And really her strength is in client retention. You play a fine balance between finding new clients and also looking after your existing clients. And that’s really where we work with each other’s strengths and work very well together, because she heads up the client retention. I bring them and she looks after them.

NASTASSIA ARENDSE:  How competitive is the industry that you are in right now?

MDUDUZI LUTHULI:  It’s extremely competitive. I don’t think I have the words to truly describe how competitive an industry it is. One of the fantastic things and one of the shining lights about South Africa is that we have a very good financial system. Or let me say that the governance and the legislation here is very good and that really translates into the financial advisory system with the initiatives that the FSB puts out there – the financial planning institution, to make sure that as financial advisors or wealth managers we move away from a culture of just selling for the sake of selling, and seeing ourselves and conducting ourselves as professionals and as a professional field.

So now you are working in an industry where you have exceptional professionals, people giving advice. And really you have to convince the client as to say why you. And I would even say you have very established players, your Allan Gray, your Stanlibs of the world, your Old Mutual, your Liberty. So as a new company going after clients and acquiring big clients, there’s already someone existing there, giving them advice; there is really an existing relationship. Now you have to convince them to say: what am I bringing to the party that will convince them? It’s very competitive.

NASTASSIA ARENDSE:  Before we get to the internship programme – and we were talking about the financial industry – there is a lot of talk. You have Absa talking about it, you get a lot of industry professionals talking about transformation in the financial services industry. Some argue it from the point of we need more women to come on board and be fund managers, portfolio managers, etc. Others say we are all competing for the same pie, a little bit more, etc. What are your thoughts on transformation in the financial industry?

MDUDUZI LUTHULI:  It’s definitely something that needs to be looked at. I would challenge anyone to go to any investment seminar, whether it’s held by the FSB, the Financial Planning Institute or the big players, and the reality is the room will be dominated by white Afrikaans males over the age of 45.

The nice thing about going into our business is that it also allows you to do proper succession planning, estate planning. And all that means is if I start my company and I run it well, I now have the opportunity to pass it on to my children – to say, listen, I’ve started Luthuli Capital, it’s been going for 30 years. Don’t go and study law or art or whatever. Take over the company. So you have these established players and they are now bringing in the second, third generation.

The reality of the country is we might have political freedom, but we certainly don’t have economic freedom. If you look at the mass population, where is the money still sitting? So it’s a matter of me not just coming in and saying look, I’m competent, I know how to do this, but it’s how do you then infiltrate this private club. Or the other way to look at it is how we get money to flow out of a few hands to the mass population – and thus that gives me a new market to work with.