Moonstone Monitor: Hefty health bill to reduce?
Mamma Manto’s involvement (or should that be interference) in the private healthcare provision again came to mind after I recently attended a presentation on the current state of the economy hosted by Back Office Fund Solutions.
Discovery did a presentation on the healthcare sector which contained some very interesting facts:
The SA private health care sector featured 6th in the world In terms of performance. While only 19% of the population, or 9 million people belonged to a medical scheme, or were self funding, they contribute 58% of the money spent on health.
In real money terms, the private sector spends R77 billion as opposed to the public spend of R56 billion.
This leads to substantially more resources like doctors and specialists being available to the private sector, obviously causing a vacuum in the public sector.
Last week Health Minister Manto Tshabalala-Msimang presented her department’s new policy on national health insurance (NHI) to the cabinet.
The government hopes to resolve the myriad problems facing both the public and private healthcare sectors in SA by introducing a new health system that will provide basic medical care to all citizens, with the rich subsidising the poor and the healthy subsidising the sick. Although it would be financed by a mixture of government funds and mandatory contributions from employees, Tshabalala-Msimang could not provide financial details of the NHI policy, as it still had to be costed.
She had a lot more dope on private healthcare though.
Speaking at the annual Board of Healthcare Funders (BHF) conference, she said NHI was intended to make quality healthcare affordable to more South Africans, and to address rising costs. She said the private health sector had faced an “uncontrollable” cost spiral since the 1980s and was unsustainable in its current form. The most important cost drivers were private hospitals, specialists and administrative costs.
“Annual expenditure on private hospitals was R803 per medical scheme beneficiary in 1997, which increased to R2230 in 2005. Medical scheme contributions too have been increasing from (an average of) R3423 per beneficiary in 1998 to R7807 in 2005 (and) have become increasingly unaffordable”, she said.
According to Discovery the main drivers of healthcare inflation are:
Ø An ageing population
Ø Increased prevalence of chronic diseases and HIV
Ø New medical technologies and medications
Ø Earlier and more aggressive treatment of disease
Ø Supply shortages
It would appear that addressing disparity in the country is a much wider concern than that of healthcare alone. We know that there are massive plans afoot in terms of retirement provision too. The question that arises though is whether it is all bad.
A colleague that I spoke to felt that the leveling of the playing fields was not only bad news. A major private hospital group is currently building their umpteenth new hospital in Switzerland. His question to me was:
“Where does that money come from? From the exorbitant fees you and I pay thanks to our ability to afford medical aid.”
This could be an interesting debate, and I cannot wait to hear your views.
