National Health Insurance (NHI) – a tale of two systems

During a recent doctor-meeting in East London, an older Xhosa man walked into the room, looked at the screen that read “National Health Insurance: opportunity or threat?” and asked: “should I be scared?” But before you rush off and start packing your bags, or go out and buy some additional health cover, read on, make up your own mind and participate in the processes of debate and discussion which are unfolding.

The inequities in South African society are well-known and acknowledged by most. These inequities have prompted many reforms. Till today these inequities underpin discussions on public transportation, education, housing and healthcare. Our Constitution recognises these rights and requires of government to take steps to address healthcare, education and housing in a progressive manner.

It is also well-known that just over 7 million South Africans are covered by medical schemes to which they contribute monthly premiums. Another 9.8 million people use private health services, such as GPs and pharmacies by paying out of pocket. This group do not benefit from pooling their money into funds, and therefore have limited buying power. Many doctors provide services to this group of people at a discounted rate. It is estimated that some 30 million South Africans rely mostly on the public sector for health services.

It is reported that the state will, in 2009/10 spend on average about R2 000 per year on each patient that it sees (bearing in mind that not all people visit health facilities in a year). This figure will increase when the new salary dispensation for healthcare professionals is implemented and as more upgrades are undertaken to enhance the quality of facilities and care. These quality upgrades are mentioned in all NHI discussions and has been publicly acknowledged by both the Minister of Health and the President as pre-conditions for a successful NHI.

In contrast, medical schemes spend about R9500 per year on each patient that is seen through that system. It is therefore understandable that people compare these two amounts, and point to the difference. In both cases, people ask: where does the money come from for the R1300, and for the R9500? They also ask whether the R9500 actually buys better care than the R1300, and whether we know if patients are better off or not, in both the two systems? All of these questions are valid, and a critical attitude to these issues has to be welcomed.

So what does the NHI plans seem to propose? Although we are still waiting for a Green Paper on NHI (i.e. a discussion document up for comments by the public), indications are that the NHI is envisaged to look at follows:

· There will be a national NHI Fund, where monies will be pooled in order to secure greater buying power.

· The Fund will be administered by an NHI Agency (NHIA), with a CEO reporting to the Minister of Health.

· The NHIA will buy all healthcare services and products on behalf of the total South African population.

· Both the public and private sectors will deliver care to NHI patients at a uniform level. Patients will be expected to register at a private practice, so that that practice could be paid a per head amount for that practice seeing the patient.

· All employees who earn more than about R5000 per month (the approximate current tax threshold) would have to pay a payroll tax to the NHIF. Employers would have to pay the same amount into the Fund. It is not clear what that amount would be.

· Medical schemes will continue to exist, but it is likely that some medical scheme members will find paying both NHI contributions and medical scheme premiums, too much.

Concerns have been raised about the package of services that will be delivered, and whether the NHI would have sufficient funds to realise the expectations of the South African population. Preliminary calculations have been done and it is estimated that one could effect savings in the current system through, for example, doctors and hospitals charging less than their current fees and through decreased administration costs. On the other hand, increasing quality of care, improving facilities, the establishment of a national NHI office and regional offices and addressing staff shortages (even if through imported healthcare professionals) are bound to increase the money required for an NHI.

In terms of policy and legal development, South Africa is only now starting the process. This means that there is still ample opportunity for stakeholders to look into alternative models, variations on the proposals, and to do their own costing on the impact and look at the implications of the system as proposed by the ANC. The ANC proposals are current being discussed in the relevant government departments, and a proposal will be discussed in cabinet. The proposal will affect not only the Minister of Health, but also the Ministers of -Finance, - Labour, - Trade and Industry, - Economic Development and - National Planning. After adoption of the policy by cabinet, a Green Paper (i.e. a discussion document) will be issued for public comment.

The Minister of Health announced, on 18 September 2009, that he will be appointing an NHI Committee to advise him on policy development and public consultation, develop draft legislation, and also to develop a comprehensive NHI implementation plan by June 2010. It is envisaged that the parliamentary processes, including the intimate involvement of the National Council of Provinces (health services being a provincial competence) may result in the Bill taking up more time in Parliament. The fact that the Bill will be imposing a payroll tax could mean that not only the Health Portfolio Committee, but also that the Portfolio Committees on Finance and Labour, may get involved.

In the end, the NHI proposals have to measure up to constitutional scrutiny, i.e. it has to assist in the realisation of quality healthcare for more people. The right to equality, as well as property rights, may also be at stake. Stakeholders, including patient groups, employers and healthcare providers and suppliers are now eagerly awaiting the publication of the Green Paper, which will contain more details, including costing studies.