The dawn of National Health Insurance

Government’s long-awaited NHI (National Health Insurance) Green Paper was recently published for comment. At this early stage the private healthcare industry is left with more questions than answers. What form will the eventual NHI solution take?

“The green paper is a discussion document which aims to stimulate debate over government’s intention to ensure that all citizens in South Africa have access to quality health care,” says Andre Jacobs, Business Unit Head, Healthcare National
Operations, of Aon South Africa. “It describes a broad way forward for public healthcare, but it does not give finite details on policies or actions at this stage.” The NHI system is still in the planning stages. Once all of the healthcare stakeholders agree on the solution it will be implemented in various phases over a number of years. And we’ll have to wait until 2026 for the final pieces of the puzzle to fall into place.

The result 14 years from today could be vastly different from that currently proposed. For example, 14 years ago Zambia was nearly bankrupt due to a declining copper price. Today, the table has completely turned and their copper mines again add value to the economy. And in South Africa we are battling the severe consequences copper theft has on our economy – who would have predicted the problem 14 years ago? We shouldn’t fixate on the details right now, but rather on the big picture, the need to provide quality healthcare for all South Africans.

Affordability issues

One of the critical components of a successful NHI is funding – some of which will have to come from taxpayers. The media suggests that South Africa has a narrow tax base and that ordinary citizens will not be able to afford to fund the NHI in addition to their current expenses.

“This position is factually incorrect as in most countries, where NHI is implemented, every person pays towards it, usually by way of a payroll tax,” says Jacobs. “Those that cannot afford to pay, such as the unemployed, apply to the NHI fund for exemption and their contribution is paid for by the state.” The state’s payment comes from a general fiscal allocation, so the payment “net” for NHI will be broad rather than narrow.

Affordability issues aside, concerns have been raised by members of the country’s private medical schemes as to how they will fit into the new system. “For the immediate future it will be business as usual for medical schemes and their members,” reckons Jacobs. But he warns of the danger of getting “trapped” in the private medical structures out of fear that the poor public health system is not suitable for our needs.

He explains: “If the quality of the public health system is greatly improved we will then be able choose more appropriately if we want to buy into a medical scheme or be part of the NHI. This changes the consumer’s perception of paying for medical insurance from a fear based paradigm to a value-added array of medical services. Medical schemes should start focussing on the value added benefits that they can offer over the NHI system.”

Patching up the hospitals

There are many who question government’s ability to implement NHI on the back of a creaking public healthcare infrastructure. Our public hospitals are in a sad state. And the problem goes beyond infrastructure issues to governance and accountability. “A range of commissions of inquiry have made a number of suggestions, which should be implemented as soon as possible,” says Jacobs. “Government recently announced plans to build six mega hospitals that will go a long way toward establishing quality health facilities while other healthcare facilities are being improved.”

He says accountability concerns should be addressed too – to ensure efficient administration and delegation of authority.

Staffing a major challenge

The issue of staffing is more difficult to tackle. A recent show on M-Net’s Carte Blanche alleged that there weren’t enough doctors and nurses for the country’s existing healthcare facilities – let alone the new mega structures. And although the Green Paper makes mention of “production of doctors, medical specialists and nurses” this remains a major challenge.

Jacobs reckons the solution could be to shift from a curative to a preventative healthcare system. “The number of qualifying doctors and nurses is really lagging behind – but the problem is more complex than this – and centres on how we practice medicine.” One example is that of circumcision. Male circumcision reduces the probability of HIV transmission, so it is more cost effective (and requires less staff) to circumcise an individual today than to treat additional HIV patients two decades later.

Pay as you use

There are many South Africans who feel they could end up paying for something they never use. “I am not convinced that this concern is fair,” says Jacobs. “We all pay taxes and decide on what services we wish to use and what not to use. Provided the public health system offers quality care then people will pay towards it and will make use of those services.”

He says the contribution to NHI is about social responsibility: “As privileged South Africans, we should contribute towards an NHI system so that others who cannot afford healthcare have access to that level of service. I believe that it is a moral imperative to fund those that cannot afford basic healthcare. And I am not convinced that people will object to contributing more towards the NHI.”

His only disclaimer is that contributors need to know that the money they pay towards NHI is being used prudently.

The positive side

Jacobs concludes: “The Green Paper is full of positives. Firstly, the fact that there is a collective understanding that the public sector needs to be overhauled is a major step in the right direction."

"Secondly, private medical schemes will continue to exist alongside the NHI during its
formative years. And finally, government has committed to an ambitious but realistic time frame, including a pilot testing phase and subsequent phased implementation. The quest for sustainable healthcare solutions does not lie in bargain shopping for cheaper medical care or a mere price and benefit comparison. In seeking sustainable solutions the minister of health, civil society and the business sector will find value in implementing plans that improve general health and medical efficiency by eliminating disparities in healthcare and seeking more collaborative approaches."