Craig Comrie
CEO of Profmed, Craig Comrie, unpacks the inception of the medical scheme environment and how it fairs in a modern setting.
Healthcare has always been a key indicator of success / strength for just about every society through every ages. Our inclination for learning, longevity and healing, led us to establish a healthcare sector geared towards the shared wellness of our fellow man.
As South Africa moved into a new democracy in 1994, the healthcare system became stretched thin, revealing the need to increase access and funding – thus the sick funds and medical societies which resembled co-operative societies evolved and a more regulated medical scheme environment was born.
As we allow the past guide our decisions, the journey of medical schemes in South Africa offers valuable insights into our nation’s healthcare landscape. By tracing the history to the present day, we glean lessons that inform future strategies for addressing current healthcare challenges. But first, let’s go back to the beginning.
Where it all began
The inception of various interest groups focussed on accessing health in South Africa dates to the 1960s, rooted in the establishment of what was known as friendly societies. These cooperative entities were designed to manage health insurance risks collectively, laying the foundation for what would become a robust private healthcare sector. These societies exemplified not for profit community-driven initiatives aimed at financial protection against health-related expenses.
The transformative period for medical schemes came in the 1990s with the political shift and the dawn of a new government. The primary objective was to alleviate the burden on public healthcare facilities by encouraging those who could afford it to seek healthcare services in the private sector. This era saw the introduction of the Medical Schemes Act in 1998, which promoted pre-funding of healthcare risks and structured the private healthcare market to provide a mechanism for those who can afford payment to contribute to their own healthcare while funding relief to the public sector.
It works, but only for a few
Despite the best intentions driving regulatory reforms, the private healthcare sector has historically only ever catered to 15% segment of the population, a figure that has remained relatively stable over the decades and is similar to the levels of private healthcare coverage in other developed countries who have universal healthcare systems.
But times are changing. The rising cost of healthcare, unfortunate levels of inflation, and the increasing burden of diseases, pose a significant challenge. With healthcare costs in South Africa escalating at a rate of CPI +4%, the financial strain on both the private and public sectors is immense.
The public sector faces similar cost escalations along with the additional pressures due to population growth and poor economic growth. While the National Department of Health’s budget has seen modest increases which are less than typical public sector salary and wage increases. This gap has resulted in limiting access to services and growing waiting list and queues for basic and critical services. This only exacerbates our equitable healthcare challenges, which have become increasingly elusive in the face of systemic and financial constraints.
Current state and policy implications
Today, our healthcare system stands at a critical juncture. The proposed National Health Insurance (NHI) Act aims to transform the landscape by striving for universal healthcare coverage (UHC). However, the implementation of the NHI faces significant hurdles, including funding shortfalls and potential disruptions to the existing healthcare providers. The threat of reduced consumer choice and the quality of healthcare services under the NHI framework raises concerns about its viability.
Historically, South Africa has performed relatively well in certain World Health Organisation UHC indicators, particularly in reducing out-of-pocket expenses for healthcare services. This achievement is partly attributable to the structured approach of medical schemes and successful treatment programmes for conditions such as HIV. Nonetheless, the pace of inclusive growth within the medical schemes sector has been slow, hampered by regulatory inertia and missed opportunities to expand coverage to low-income populations.
Lessons from the Past
The history of medical schemes teaches us that effective healthcare reforms require inclusive stakeholder engagement and robust policy direction which must be flexible and responsive to the changing needs of the healthcare consumer.
The current lack of policy review and implementation, particularly regarding low-income medical schemes, highlights the need for regulatory due diligence and proactive governance which can promote affordability and the growth of medical schemes.
Direction for the future
To navigate the future of healthcare in this country, we need to adopt a multifaceted approach. Strengthening co-operation, leadership and management within both public and private sectors can drive improvements in healthcare delivery. Enhancing regulatory frameworks to support affordable healthcare options and expanding coverage through inclusive policies will be critical.
Investing in healthcare infrastructure, particularly in underserved areas, and promoting collaboration between private and public sectors can mitigate resource limitations and improve access to quality care. Recognising and leveraging centres of excellence, such as public facilities such as Groote Schuur Hospital for specialised treatments, can serve as a model for public centres of excellence where medical scheme members my bring added funding to these facilities when they obtain services in thservices where.
Ultimately, the sustainability of medical schemes and the broader healthcare system will depend on a responsive regulatory environment which support the objectives of affordability and value . By learning from past successes and shortcomings, South Africa can forge a path towards a more inclusive and resilient healthcare future.
Get the latest issue of FAnews