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Tough times ahead for the industry

30 November 2022 Myra Knoesen

Now that the pandemic seems to have settled, FAnews spoke to Charlton Murove, Head of Research at the Board of Healthcare Funders (BHF) about what the current trends in the healthcare industry are that brokers and advisers should be aware of when it comes to advising their clients, future pandemics and more

The current trends

Murove said that things are getting back to normal, with the utilisation of health services reaching levels similar to what was seen before the COVID-19 pandemic, and this trend may go on for a while.

“People are accessing health services again, going for procedures that might have been postponed because of the pandemic. There were concerns that people were not utilising health services as they should during the pandemic, such services forgone include screening tests and chronic disease care and medicines,” added Murove.

What this means, Murove said, is that the health system might now be inundated, following the underutilisation during the pandemic.

When looking at the growing prevalence of non-communicable diseases (NCDs) and what this means for the industry, Dr Rajesh Patel, Head of Health Systems Strengthening the BHF, said over the last two decades, the incidence and prevalence of non-communicable diseases has increased rapidly. The South African Demographic and Health Survey also shows an increase in the obesity burden in South Africa.

“For the medical scheme environment, when you start having exponential increases in non-communicable diseases, it implies an additional burden that the schemes must carry. This results in additional needs and resources that need to be met. That puts a lot of pressure on the health system; human resources are needed to treat and manage, and additional monetary resources are required as well. If we try to continue working with a curative mindset, we are going to find ourselves very short-changed,” said Patel.

Going into the future, Patel mentioned that it is critical that we start planning now for what is going to happen in the next 10 to 20 years. “We must think about prevention in our population right now. We also critically need to look at interventions for the social determinants of health and see to what extent we can address those, so that we can reduce the incidence of these non-communicable diseases. So, planning is not just about managing the increased burden that we will need to carry, but also to what extent we can actually prevent the onset of the new cases of non-communicable diseases.”

New diseases will drive healthcare inflation

Long-COVID, according to Patel, also adds to the burden, and “we shouldn't think of COVID-19 as just an acute episode. We also need to consider its subsequent effects on some people.”

“COVID-19 took prominence during those pandemic months. There were fewer people reporting influenza, but it never disappeared. I have heard anecdotes recently of patients who were tested for COVID-19, but also underwent other tests. A few of them were negative for COVID, but positive for influenza B. So, influenza is going to be with us for the long term. The most important thing, as we mentioned earlier, is prevention. We need to encourage the uptake of COVID-19, influenza and pneumococcal vaccines, particularly for people that are at high risk,” said Patel.

“We recently registered five cases of monkeypox in the country, which is something that we need to be conscious about. Some older folks have had smallpox vaccinations and may have some protection, but most of the population is not protected by vaccination, and that becomes an intervention consideration for the future. At this stage, there has been a slow increase in incidence of monkeypox worldwide, and it seems to have levelled off. But it is definitely not out of sight, out of mind. We need to be conscious about it, just as we need to be conscious of many other diseases that exist. For example, the outbreak of Ebola in the DRC, measles, etc.,” emphasised Patel.

“The bottom line is with new diseases and new types of infections. We will have to upscale our testing and we have to understand the disease burden that these viral agents have introduced. When there is a pandemic like COVID-19, additional resources are going to be needed. The important thing is planning. We were caught off guard by COVID-19 and that should be a lesson to resource up some of the government agencies like the NICD and to make sure that we are prepared for the future, and that all our contingency plans are in place and ready to be implemented. We need to make sure our information systems are updated and running, so that with notifications we can be ready to respond immediately. All this will certainly drive medical inflation, because at the end of the day health needs have to be met and resources need to be applied to address these additional needs,” continued Patel.

“In addition, on the economic front, there are higher rates of inflation globally and locally, which will impact on health services. So, the health sector will not be spared in terms of cost increases. This is likely to have a knock-on effect in relation to contribution increases, which may, in turn, present affordability challenges to members,” emphasised Murove.

It looks like there will be tough times ahead for the industry, according to Murove.

The future of the NHI

Murove mentioned that the National Health Insurance (NHI) Bill might be signed into law soon.

“It must be borne in mind that the NHI involves many reforms, that will require a lot of time to implement, with budget constraints and the depressed economic environment it may be difficult to see all the proposed changes taking place immediately. So, although it might be signed into law, it may not have an immediate impact on how the healthcare sector functions,” he commented.

If the healthcare environment remains on its current trajectory, Murove said we will see private healthcare becoming more and more expensive, with more pressure being placed on the public health facilities.

“Depending on how the NHI is implemented, we might see people unable to afford medical scheme membership as the medical tax credits, and state subsidies for medicals schemes is removed,” he added.

A collaborative approach

What worked during the COVID-19 era, according to Murove, was the collaboration of all the stakeholders from both private and public sectors.

“What became evident was the need to always have lines of communication open between all the role players in the healthcare industry. Collaboration and clear communication will sharpen our responses to any future pandemic. We do have to invest in technology and data collection systems in particular,” he said.

“However, we do not only have to focus on future pandemics, because we actually have many healthcare challenges at the moment, and a collaborative approach will help us deal with them better too,” concluded Murove.

The biggest challenges, according to Patel, are the dysfunctional regulatory gaps that are around at present.

“In addition to that, we recently heard about the Health Squared debacle, where the scheme wants to go into liquidation voluntarily and CMS, which could have intervened in the past but didn't, now wants to block it. This shows that the regulator is out of touch with its role and what's happening in the environment. It is important to avoid those type of adverse events in the future and, therefore, it is absolutely critical that risk-based reserving and risk-based capital need to be seriously considered. After the financial crisis of 2008, the entire financial industry around the world has embraced risk-based capital. In 2015, CMS published a document and asked for comment, but seven years later, it hasn’t seen the light of day. BHF is recommending to its membership that they incorporate risk-based capital adequacy as part of their management reporting,” said Patel.

“Another major challenge is that we cannot continue to have regulated Prescribed Minimum Benefits (PMB) without regulated prices that are suppose go along with them. It is important to provide certainty for people to be able to access health care without significant out of pocket payment. This will be aligned to the UHC agenda of government. The PMBs need to be reviewed. So, do the low-cost benefit options dispensation. These need to be addressed at once,” concluded Patel.

Writer’s Thoughts:

Like Murove said, what worked during the COVID-19 era was the collaboration of all the stakeholders from both private and public sectors. However, we do not only have to focus on future pandemics, because we have many healthcare challenges at the moment. The biggest challenges, according to Patel, are the dysfunctional regulatory gaps that are around at present. Do you agree? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za

Comments

Added by Lindi-lu Samuel, 12 Dec 2022
Our goverment can not even take care of the present available goverment hospitals. The ANC will be the fathers of the total downfall of public services and healthcare in South Africa. There is no way NHI can work here.
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Added by Paul, 30 Nov 2022
The only reason current government pushes the NHI is to ransack the funds that will become available.
This is what they do and what they will always do while in power.
Globally, National Health schemes require constant financial aid/top ups etc from their governments
UK and USA schemes for example are proven failures.
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