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Is the NHI becoming a bridge to wide to cross?

02 April 2014 Jonathan Faurie

A reinvigorated and dramatically improved healthcare system is one of the areas which has been identified as a priority for the newly elected government which will be elected in May this year. The current resolution of the significant disparity between private and government healthcare has been labelled by the African National Congress as an area by which the progress of South Africa will be judged in the future.

In an effort to resolve this issue, government announced that the country would be implementing the National Health Insurance (NHI) programme which would mean that all South Africans could have equitable access to healthcare, no matter their income status in society.
But the specifics of the NHI have not been finalised. There is no clarity on what model the programme will be based on, there is no clarity on how the programme will be funded, and there is no clarity on how the programme will be administrated. Certain aspects will hopefully be cleared up when government releases its NHI White Paper, which is due this year.
Significant impact

One thing that is clear, is that government is sticking to its guns in implementing the system. Any doubts about this were clarified by Health Minister Aaron Motsoaledi in February when he was adament that the NHI is a reality.
Whatever form the NHI takes, there is no doubt that it will have a significant impact on the South African health system as well as the medical scheme industry. Metropolitan Health CEO, Blum Khan, says that the objective of the NHI, which is the provision of equitable health to all South Africans, is an arduous task.
"The first step that needs to be taken is to set out clearly on what the public should expect from the programme. The current expectations are essentially built around a hospi-centric model which is prevalent in the private sector. In some ways it has become aspirational for South Africans to belong to a medical scheme so that they can have easy access to private hospitals where the hotel-end of the offering is clearly different to what one experiences in the current public hospitals. This is changing when you look at facilities like the Albert Luthuli Hospital in Durban, the Khayelitsha Hospital and the Mitchell's Plain Hospital in the Western Cape," says Khan.
He adds that the challenge is to start refocusing healthcare services towards a prevention, primary care and chronic condition care planning and adherence model. This approach must find its presence through the re-engineering of primary care in South Africa, underpinned by health policy direction and a strong emphasis on the benefits of healthier living.
It is all about the costs

The cost of healthcare in South Africa is currently one of the significant contributors towards the current disparity in the industry. There has always been a significant difference in costs between private and government healthcare, but the current situation of having no tariffs to regulate costs in the industry is slowly creating an untenable situation that needs to be resolved.
What we also need to realise is that the South African economy is fragile at best, and government simply does not have the funds to maintain its current parastatal infrastructure. How then, will it fund a multi-billion rand healthcare system?

The most likely solution is that the consumer will have to bear the cost of the system, and this will most likely take the form of a new special tax. But many economists and tax experts feel that the consumer is already taxed to the limit. They cannot be taxed any more.
All of this is speculation until the appearance of the White Paper, which could be released just before the elections. However, we have to question whether it is economically viable to implement the NHI with our current economic situation.
"Today, the world is a much more challenging place economically than ten years ago. The reality of a lack of available funding will play a key role in determining the extent to which NHI roll-out will happen over the next five years. When your resources are limited and you want to do great things, then you draw on your creative skills and ability to innovate. At the same time, we must free up capacity by eliminating the waste and duplication we have across the healthcare value chain in South Africa," says Khan.
There was supposed to be some direction on how the NHI will be funded in this year's budget speech. This was however looked over while National Treasury and the Department of Health take a serious look at the cost of healthcare in the country and the challenges associated with it.
"There are many risks, including the negative impact on growth and employment that could result if you impose more taxation on the system. The White Paper will no doubt deal with this, or at the very least, provide a glimpse of how the funding model will be shaped," says Khan.
Will we see an integrated system?

The manner in which the NHI will be rolled out has been a serious concern ever since government first spoke about the system. The main concern that industry role players have is the role of private healthcare in the NHI and whether we will have a system that uses capacity from both government and private facilities.
"We must include resources in the private and the public sector in this consideration and a willingness to establish meaningful public private partnerships must be part of this conversation. We must also agree on the desired customer experience standards that we should operate according to. From this knowledge, we can determine how best to administer the system," says Khan.
Editor's Thoughts:
There is no doubt that the NHI will also be a benchmark for similar programmes in the African context provided that all of the challenges are resolved early and effectively. But what effect will the NHI have on the medical scheme industry? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

Comments

Added by Dawie Bornmann, 02 Apr 2014
Aaron Motsoaledi is on drugs. Obama Care and the NHS in the UK is on its knees. BBC reported earlier this week that the NHS will have to start charging the middle-class soon for services rendered to prevent a total collapse of the NHS. I don't think the ANC have the brain power available to make this one work
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Added by Ayanda, 02 Apr 2014
Pity they keep talking about National Health INSURANCE when it will have very little to do with insurance at all. The government intends to be the National Health PROVIDER through its state hospitals, clinics, etc. Witnessing the poor condition, deterioration and inefficiency of most of these installations is a salutary experience indeed. They simply will not cope - not now, not ever.
The government ought to be planning to become simply the INSURER which pays for the supply of medical services, not both the insurer AND the provider.
The most efficient use of state (i.e. tax-payer) money AND of scarce medicines & medical services can only be achieved in one way. That is for the state to be the insurer (i.e. the medical aid scheme) which regularly negotiates the best available prices, and for private suppliers to be the providers of all these medical services.
It already works extremely well with private medical aid schemes and private suppliers, why would it not work where one of the medical aid schemes happens to be run by government??? Would it mean too much of a perceived loss of "control" of people and assets by this government for their liking? It will certainly make things a whole lot cheaper for them and a whole lot better for patients who can then go to support the best medical installations and not be forced to use the services of inept, incompetent and couldn't-care-less state employees.

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Added by DerickSaaiman, 02 Apr 2014
Ever heard of Obamacare?If not well let me enlighten you;
t is not going well!!
It seems to be the funding and roll out thereof that has become a major stumbling block.
Fortunately in this country we dont have to spend much time on a finance plan.It gets taken from the
private and business section by means of nationalisation.
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Added by jo, 02 Apr 2014
So the 7m taxpayers will have to bear an even greater burden for the 45m that don't contribute?
That's just unsustainable and will push entrepreneurs and wealthy out the country.
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