The National Health Insurance (NHI) is intended to ensure that all South Africans are provided with essential healthcare, regardless of their employment status. Healthcare is a human right and written into our Constitution. Yet the NHI is not without objectors, from the pharmaceutical industry to medical aid schemes.
Feedback received from corporate business and members of the public for the draft White Paper on NHI was received, following a period for public comment. Of the 162 written comments received, some Provincial Treasuries, medical schemes, administrators, private hospital groups, medical specialists and think tanks were not supportive of the NHI Policy.
Worried about business – the pharmaceutical industry feels that direct delivery will increase the price of medicine and recommend that the price of medicines should increase for the survival of the industry.
Medical aid schemes and administrators believe that the NHI, as the sole purchaser will destroy the medical scheme environment. They ask to still have a supplementary and substitutive role to ensure the survival of the pharmaceutical industry.
Various think tanks including the Free Market Foundation, the Helen Suzman Foundation and the South African Institute of Race Relations are of the opinion that “governments must focus on challenges in the public health system and that the private sector is operating perfectly and is addressing a need that is determined by market forces,” (White Paper on National Health Insurance, released on 11 May 2017).
South Africa spends almost 8.6% of its gross domestic product (GDP) on health care, which is comparable to other middle-income countries. However, only 4.1% of health expenditure is spent on 84% of the uninsured population served in an over-burdened public health sector, while 4.4% is spent on 16% of the population covered by private medical schemes who access their health care services in a costly private sector.
Escalating costs of private medical schemes makes health care unaffordable for the majority of South Africans – “spending through medical schemes in South Africa is the highest in the world and six times higher than in any OECD country and represents more than 6 times the 2013 OECD average of 6.3%” (NHI White Paper, May 2017).
Benefits covered by medical schemes are usually not comprehensive, resulting in medical scheme members having to make substantial out of-pocket payments, for instance - where the medical scheme only covers part of the cost of services, a service is not covered at all by the medical scheme or scheme benefits have run out.
NHI aims to offer universal health coverage to assist the entire population especially vulnerable populations, while protecting households from financial risks and reducing user and out-of-pocket payments to create a unified health system.
It will transform the fragmented two-tiered health system, the public and private, into a unified health system, as envisaged by the 1997 White Paper on the Transformation of the Health System in South Africa. Taxes and other health care related revenues from social security funds such as the Road Accident Fund (RAF) and the Compensation for Occupational Injuries and Diseases Act (COIDA) will also be sources of revenue to finance the NHI. Attention will be given to those with special health care needs, such as the disabled and the elderly.
The NHI will focus on disease prevention and health promotion by using a primary health care (PHC) approach, and continue other services, rehabilitative, curative, and palliative to ensure sustainability. The plan is to implement the NHI over 14 years, in three phases. The first phase to strengthen health systems with initiatives has started and should conclude by the end of this year.
A Health Ombudsman has been appointed and municipal Ward-Based PHC Outreach Teams (WBPHCOTs), an integrated school health programme, District Clinical Specialist Teams and contracting-in of PHC providers such as general practitioners (GPs) are also included in this phase.
The second phase begins next year and will focus on finalising the legislation for NHI and establishing the NHI Fund. A legislative process must be implemented to establish the NHI Fund and other legislations such as the National Health Act, the RAF and COIDA will have to be amended.
Other changes that will take place include amendments to the Medical Schemes Act, as the role of medical schemes will evolve to provide complementary cover in an NHI environment, providers certified by the OHSC will have to be accredited and contracting with public hospitals will start with central hospitals and progressively move to other levels of care.
The third phase starts in 2021/22 and will introduce NHI-specific taxes from eligible taxpayers as determined by National Treasury and contracting with private providers at higher levels of care.
Only households earning above R70 000.00 will be required to pay NHI specific taxes at a rate of between 0.1% and 3.1% depending on the funding scenario used.
NHI certainly seems to be the measure needed to revitalise our stagnant health care system and help all to live healthier, more productive lives to benefit our economy.
Regenesys Business School is hosting a Health Care Forum on the NHI with government representatives, medical aid providers, the HWSETA and unions on Wednesday 27 September at 4 Pybus Street, Sandton from 8:30am. Free entry, RSVP to email@example.com
The advertorial above appeared in the Sunday Times Newspaper on 24 September 2017.