I have in recent posts referred to my concerns related to the National Health Insurance (NHI) draft bill and it is only reasonable to ask, “So if you are concerned what alternatives would you recommend or consider? It is easy to criticise but if it is accepted that the current status quo for the majority of South Africans is unacceptable, rather than carping on the sidelines offer alternatives!” So much has been written in the last few years on this topic that I am hesitant that I can add anything of value to the debate but for what is worth here are my views!
Since 1994 the divide between those who have the ability to afford private healthcare and those dependent on the State for the provision of healthcare has grown. As a health professional who trained and worked first as a medical student, intern then trainee paediatrician and finally as a paediatrician in hospitals and clinics of the South African public health services from 1968 until 1995 and thereafter as a senior manager of public provincial health services until my retirement in 1995, I do have a particular perspective of the evolution of health care during that time that I have outlined in large measure in my book, Walking the Road of Healthcare in South Africa.1.
It is ironic to note that the private health sector has become stronger and more entrenched since the democratic transition in this country in 1994. Segregated along racial lines until the early 1990’s nevertheless many South Africans of all races and socioeconomic status utilised public health services, while in the last two decades in general only those unable to afford private health care, largely black, will resort to using public healthcare. This has lead to a “two-tier” health system based on socioeconomic status, but with racial overtones.
Healthcare is expensive whether provided by the State or the private sector and has become increasingly so with advances in medical science. Health expenditure constitutes at different times in the lives of citizens, particularly as they age, a significant expenditure in either sector.
In various countries the model of healthcare provision differs with the healthcare in the United States, largely provided by the private sector, and in the United Kingdom where the majority of the population are dependent on the State funded National Health System. Across the world there are various models and the model proposed for South Africa is deemed to be modelled on the health systems in countries such as Thailand, South Korea, Mexico, Vietnam and Columbia amongst others. In reality, whatever the country, whatever the state of the economy and whatever system is adopted, the need for healthcare will outstrip the available resources.
It is useful to reflect in broad terms on the various models that exist in industrialised countries. In countries such as Germany, France, Japan and the Netherlands an insurance system is financed jointly by employers and employees through a payroll deduction, however, the insurance industry may not make a profit and must provide cover to all citizens. This scenario is based on high levels of employment unlike the current reality in South Africa. In the United Kingdom, Spain and New Zealand health care is provided for all citizens by the government health system funded through tax income. In South Africa the challenge is the very narrow tax base, despite Value Added Tax (VAT) on most goods sold, in contrast to a much higher proportion of the population that contributes to the national tax income in the countries listed above. In the United States, similar to the private sector in South Africa, health services are provided by private providers funded by the insurance industry (comparable with South African medical aids although in South Africa these are to an extent regulated by government) that is based on a profit motive in line with the free-market principles of their society. National Health Insurance in South Africa, as proposed, would be funded by tax paid by all citizens through a government-run national “insurance plan” i.e. the National Health Insurance Fund as proposed in the NHI Draft Bill, which then relies on the contributions of citizens through both indirect and direct taxes.
The philosophy of Universal Health Coverage (UHC) defined in the Sustainable Development Goals (SDG) to be achieved by 2030 2 as access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all with “financial risk protection”. However, to achieve this goal by 2030 with the resources available is an unlikely challenge for South Africa and even more so for many other countries on the African continent and elsewhere.
While I would support, in principle, the goals of UHC and indeed the introduction of any system that provides for a more equitable distribution of healthcare resources, I am not in favour of the centralised top-down system as envisaged in the NHI Bill. I would rather propose a more decentralised model that continues to engage the provinces in support of a more “federal” approach to the delivery of health services. Similarly, I would propose a funding model that does not centralise funding into a single public entity at a national level such as the National Insurance Fund functioning as a quasi independent public entity with a board appointed by the National Minister of Health. My preference would be for a designated budget line in the National Treasury set aside for the purpose of funding healthcare to be disbursed directly to the provincial health departments. This should include funds from the removal of the current tax deductions allowed to tax payers for contributions to medical aids made by their members. Clearly the totality of this funding would be dependent on the ability of the National Treasury through funds raised by taxation to allocate funding to healthcare after consideration of other priorities in government. The National Health Insurance fund would thus be set up within the National Treasury and not established as a separate public entity.
If the proposed purchaser provider relationship, which is envisaged in the NHI Draft Bill, is maintained then the decision on the package of health care services to be provided would be determined based on the burden of disease by the National Department of Health as advised by the Medical Research Council. I can see no benefit in creating a costly bureaucracy within a new public entity to make the decisions when this could be as effectively done by a similar entity located within the National Department of Health.
Thereafter, it would seem logical that the provinces become the purchaser and where appropriate the provider of health services which is a more devolved model that what has been proposed. In this model there is an ability for both current public and private sector to be contracted based on value for money for the provision of healthcare according to the package determined nationally. This, in my view, would promote the development of greater efficiency and effective in both sectors.
As a precondition to the transition to a new dispensation the woeful shortcomings currently prevalent in many public sector provincial health departments and their facilities related to management, staff establishments, logistics, infrastructure and equipment (a long list indeed!) must be addressed. Effective management without undue political interference is key to the success of any health system that is to be successful. To think that simply by implementing National Health Insurance as envisaged that these challenges will disappear is wishful thinking and holds the risk of collapsing an already fragile public and private South African health sector. The so-called “NHI pilots” have in large measure achieved very little meaningful change in the state of public sector healthcare across the country and this must be addressed by appointing people with the appropriate capacity and skills with the strict application of consequence management. It would be necessary to provide the National Health Department with greater powers to intervene when standards are not met without the necessity to invoke Section 100 of the South African Constitution to do so, as is currently the case. To achieve this would require legislative reform but not as drastic and with the potential constitutional challenges that may face the enactment of the NHI Bill in its current form.
I would leave the private health sector to function independently but with as mentioned the withdrawal of State tax subsidies through deductions allowed for of medical aid contributions. This would increase the financial incentive for those citizens with disposable income to consider utilising an improved public sector health or continue to make direct payment or contribute to medical insurance of whatever form. The private sector should become a partner in the provision of healthcare and in a competitive environment engage with the State as a provider through an open supply chain process. The proposal in the current NHI Bill that provides for accredited providers as certified by the Office of Health Standards Compliance (OHSC) but this must be a fully funded and capable accrediting agency as a precondition for all parties wishing to tender for contracts to provide health services. In time with the strengthening of the current public sector with financial incentives for its utilisation and a greater involvement of the private sector in provision of health services to the current public sector patients, the current sharp divide between the two could be reduced. My argument for the retention for the private sector, rather than what is envisaged in the NHI Bill is a need for significant risk mitigation against a collapse of the health system in South Africa as a result of a potential exodus of skilled personnel and flight of capital from the health sector overall. I would however envisage a greater degree of regulation of the private sector, again through amended legislation, as regards fees than what is currently in place through the Council for Medical Schemes.
In conclusion, and I would like to be proved wrong, it is my view that the implementation of what I consider to be an ideologically driven National Health Insurance scheme as envisaged in the NHI Bill, the consequences of which I frankly believe are poorly understood by many of the policy makers, is an action with extremely high risk and with no measures present to ameliorate the possible disastrous negative consequences. The key to moving closer to the ideal of Universal Health Coverage in South Africa is addressing the shortcomings of the current public sector on which I have reflected in depth over the last year and not in implementing a system that in the current circumstances holds the greater risk of making the access to healthcare worse and not better.
