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National Health Insurance Bill

26 August 2019 The South African Medical Association (SAMA)

The South African Medical Association (SAMA) hereby offers further comment on the new National Health Insurance (NHI) Bill introduced by the Minister of Health, Dr Zweli Mkhize, in Parliament on 8 August, particularly in relation to areas it believes need additional consideration.

The stated purpose of the NHI Bill is the establishment of the NHI as the single purchaser and payer of health services, while also ensuring the sustainability of funding of healthcare services within the country. Pooling of funds, and strategic purchasing of healthcare services, medicines, health goods, and health related products, are also key purposes of the Bill.

NHI Fund

SAMA is concerned about the governance of the NHI Fund, which is established as a single purchaser of healthcare. In the Draft Bill, the Board of the NHIF was accountable to Parliament. The new Bill seeks to put even more power in the hands of the Minister, who now appoints most of the executive-level staff and structures, and in most instances has power to disband these.

SAMA is satisfied that the Ministerial Committees in the revised Bill do not include a dictated constitution, and that the Fund Board may also appoint committees. The 2018 Bill neglected to include health practitioners in all of the proposed committees, even the Benefits Advisory Committee, which will doubtless require expert clinical inputs.

SAMA trusts that these committees will be properly constituted with the correct skills in the future, and that any decisions by the committees are subjected to administratively just processes.

The NHI Fund, as a single purchaser of healthcare, raises concerns that it may potentially be exposed to financial mismanagement. These concerns are dealt with in that the Fund will be protected against corruption through measures included in the Presidential Health Compact and that the Fund will be part of the Anti-Corruption Health Sector Forum together with Corruption Watch, Section 27, the Special Investigation Unit (SIU), National Prosecuting Authority (NPA), Financial Intelligence Centre (FIC), and the national and provincial Departments of Health.

However, the Bill makes several references to price recommendations or negotiations for the Fund to obtain services at ‘lowest possible price’. Such a large purchaser is likely to hold tremendous power in the negotiations, and the NHI must ensure that their pursuit of low prices does not endanger the sustainability of service providers, or the quality of care provided to patients.

SAMA notes that the contracting and payment models to be established through NHI are extremely complex and unprecedented. This raises questions on the capacity of the system established in terms of the Bill to manage the efficient processing of claims and reimbursement.

Contracting and Quality Care

The Bill proposes amendments to the National Health Act, which will establish District Heath Management Offices, which it appears will be largely responsible for most operational aspects including establishing contracting units, coordinating all healthcare delivered in a district, facilitating the integration of public and private health services, and reporting on a monthly basis.

The intention to ‘contract both public and private’ must not end as lip service. Strategic purchasing must be impartial and must draw on the full capability of the private sector. The private sector has the capability to bring competition and improve quality of care especially if reimbursement mechanisms emphasise and reward performance. Involvement of the private sector will assist the government progressively realise the right to healthcare.

There is no plain assurance that the intended right to broadened access refers to access to high quality care. It is imperative that we define the quality of care and put in place mechanisms to measure quality. In most countries the quality standards are developed by an independent entity and the measures not only include structural measures but processes and outcome measures.

SAMA strongly maintains that NHI implementation should not result in lower quality of care to anyone, including current members of private medical schemes. SAMA is pleased that the first imperative in Phase I of NHI is to continue with health system strengthening initiatives, including alignment of human resources with what will be required by the Fund.

The emphasis on “gatekeeping” where Family Practitioners will play a pivotal coordinating role and adherence to “referral pathways” and “protocols, guidelines and formularies” as the basis for accessing NHI reimbursement must not unduly restrict higher levels of care for patients who genuinely need secondary, tertiary and quaternary services. Whilst the Draft Bill expressively allowed a bypass of the system in case of an emergency, this Bill is silent on who can legitimately be allowed to bypass the system.

Discussions on tariffs must be reasonable and consistent with realistic costs of service provision and intended outcomes. SAMA supports the establishment of a tariff negotiation mechanism that will balance power between the purchaser and medical doctors, providers and suppliers of healthcare, and healthcare products. The Health Market Inquiry report to be released at the end of September should shed more light on this subject.

Complementary medical scheme cover will only be fair if the NHIF purchases healthcare in the public and private sector, and consistently provides good quality of care. At the moment, the State has not proven that it can provide good quality of care and there is no certainty that the NHIF will be able to contract services with private providers. This may necessitate duplicative medical scheme cover to avoid violation of rights to healthcare.

A completely new addition to the Bill has been the intention to establish an office of Health Products Procurement, located within the Fund. This office will develop a national list of health products, select health products to be procured, and coordinate supply chain management. This office it seems will take over the publication of single exit prices (SEPs), which will now be the price at which medicines and scheduled substances are sold to the NHI Fund or any other person.

SAMA continues to engage with the Bill to identify potential challenges and opportunities to be explored with regards to proposed NHI structures in a bid to ensure that any proposals positively affect the delivery of healthcare and the environment for patients and practitioners alike.

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