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Copying healthcare models may damage NHI ambitions

18 February 2014 Jonathan Faurie

There has been an international trend over the past few years for countries to relook at their existing healthcare systems in order to develop systems that would ensure high quality healthcare is accessible to the highest possible sector of the population.

South Africa is no different. The National Health Insurance programme – once finalised – promises to be one of the most ambitious projects undertaken by Government since the establishment of the new constitution in 1994. With the enormity of the task palpable, there is the temptation to copy existing models of national healthcare for implementation purposes.

 

However, auditing giant KPMG warns that copying existing healthcare systems may not be recommended in the South African context. KPMG points out that copying these models is high cost and high risk. A report by the company points out that only a self-developed system will deliver long-term sustainability.

 

Coming to terms with unique challenges

 

The report adds that emerging health economies face major long-term financial problems if they try to replicate hospital-based western models.

 

One of the major challenges facing developing markets is significant underlying financial weaknesses in the health systems of a number of developing countries. Instead of looking at established ways of working, emerging health systems need to seize the opportunity to develop new, flexible, community-focused solutions.

 

"Around the world, developing nations are struggling to adapt to the changing needs and expectations of a new, emerging middle class,” says report co-author Mark Britnell, Chairman, KPMG Global Healthcare Practice and Partner, KPMG in the UK.

 

"The last decade has seen a huge explosion in the number of people moving from poverty to financial independence. Over a billion people, with a combined wealth of $ 33 trillion, are now thought to belong to this new population bracket. Such a major demographic shift is placing massive pressure on health systems. We don’t believe that they can respond to these challenges by copying what is already out there. To be sustainable they need to find innovative new ways to respond to these changing demand patterns and escalating costs.”

 

Looking in the wrong direction

 

Compiled with input from over 70 KPMG member firm clients and health leaders, the report argues that in trying to meet rising middle class aspirations, a number of countries are looking to western-style healthcare models built around high-tech, secondary care interventions.

 

But it concludes that the volatile nature of rapidly developing economies means that many of these systems are failing to translate this high cost, hospital-based approach into real value. Instead, countries and systems that are taking a whole systems approach, using community care models and payment regimes that focus on population health improvement, are the ones most likely to be delivering affordable, sustainable, high quality care.

 

Sven Byl, KPMG’s Head of Healthcare for the Africa region and Partner, KPMG in South Africa, says, "as economic momentum increases, governments are investing more to deliver the improved healthcare that newly enfranchised citizens demand. And while each country will follow a unique path to healthcare development, it is evident they are facing many similar challenges, delivering higher quality and broader access for sustainable costs.”

 

Cost containment a key consideration

 

Cost containment is a major concern within the South African context, as there are major uncertainties as to how the NHI programme will actually be funded. The KPMG report highlights six key areas that emerging health systems should focus on in order to keep costs down without compromising on quality.

 

Redesigning roles, processes and training to ensure staff are operating at the full extent of their licence and training is the first key area that would improve any system. Separating complex and routine work, identifying bottlenecks and moving away from ‘batching’ treatments is another improvement that can be made.

 

One of the key challenges facing a system is a number of different approaches to solve a problem. Standardisation remains a key factor that would demonstrate strong commercial discipline to get the most out of drug and equipment purchasing.

 

The environment in which the system operates is also a key consideration. An environment which focuses on the use of flexible, future-proof, energy-efficient buildings is the optimal environment to operate in.

 

In today’s day and age, using the right technology is probably the most important consideration of all. Using technology such as smartphones, point of care testing and portable diagnostics to bring services and decision-making closer to patients must be used.

 

Finally, good governance needs to be implemented if the system is going to be run in an effective manner. Particularly in South Africa where poor service and governance levels are unfortunately common practice. Creating management structures that empower frontline staff and encourage experimentation will ensure that this will not be an issue.

 

Editor’s Thoughts:
Before South Africa can take any of this into consideration, it needs to establish an effective funding model for the NHI. Is it going to be funded through raising tax levels, or has government got a secret ace up its sleeve when it comes to funding. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

Comments

Added by Thomas, 18 Feb 2014
A practical look at costs associated with a proposed NHI (National health)system.
South Africa has a total population of +_ 52.98 million people.
This figure change daily as the rest of Africa also makes this their home legally or illegally. Of the total population 5,6 million are aged 4 , 4.8 mil =aged 5-9 and 4.6 mil aged 10-14.Then there are 24 % unemployed (if you can believe Sa GOVT stats).Fact is that the aim of NHI would be to provide a medical care system of sorts for many many people who cannot afford it. As always the bottom line is : who will fund this.
To get to a very approximate figure of how many working stiffs their are in SA that could possibly fund the NHI I have deducted the young (to age 14) and this leave us with 37.98 million people.Of these 24% are unemployed wich leave us with 28.86 million people. Furthermore:By the end of March 2012, 13,7m people were registered for tax with Sars.It was also found that of the 10,3m registered taxpayers in that year, only 4,6m (44,6%) actually filed personal income tax returns and paid in tax. Of these 4,6m, a further 1,3m (those earning R1 to R90000/year) contributed only 1% of the total personal income tax . That leaves 3,3m taxpayers who were responsible for 99% of all personal income tax revenue in 2011/2012.
This 3.3 mil are then the people who will fund the NHI for 48.70 million people.Let us assume that contradictory to private medical aid schemes we could care for a person (medically spoken ) for an amount of R250-00 per month!. R250-00 x 48.70 = R12175 000 000-00 would be the amount needed.This will cost every taxpayer a additional R3689-39 per month!.
Is this possible? Is it do-able? Am I totally wrong?

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Added by Kenny Williamson, 18 Feb 2014
I await more information from the government on this with anticipation.
Technology should definitely be used and perhaps a good idea would be to involve people from outside the healthcare industry involved in tech to get an outside opinion.
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