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A new collaborative road towards universal coverage

01 October 2009 Andre Jacobs, Aon South Africa

The healthcare delivery landscape must change to ensure access to quality universal coverage for all citizens.

This objective will require intellectual integrity, solution seeking and honest commitment. Social solidarity is not enough. We need to move to a compassionate society with universal coverage as the tenet of our healthcare reform.

Is this possible?

Most definitely, yes. Consider that the private healthcare industry as a national asset is ideally positioned to positively contribute towards implementing a universal healthcare delivery model. The public sector is equally well positioned to understand the needs of the majority of the population, which has made use of their services over the last 14 years. The polarised public and private healthcare debates need to be replaced by a collaborative approach that has not been seen to date.

This new collaborative road towards universal coverage must, however, not distract private medical schemes from their fiduciary obligations towards their members. Trustees of medical schemes will have to ask some serious questions. For example, can we justify the fact that administration expenditure is double or treble in the open market when compared to the restricted market? Equally, is it acceptable that the trustee remuneration for one of the smallest medical schemes is more than three times the trustee remuneration of the largest medical scheme in the country? Is it acceptable that some medical scheme options with lower benefits are subsidising the underwriting losses of higher-priced options?

Revisiting reimbursement models

The current reimbursement model should also be reconsidered. If medical scheme members can benefit more from a 5% reduction in general healthcare cost than from a 15% reduction in administration expenses, then why is the current reimbursement model retained instead of implementing performance-based remuneration of providers? Is it morally acceptable for medical schemes to fund benefits such as specialised dentistry, which borders on cosmetic treatment, whilst not adequately addressing the real burden of disease in medical schemes?

Medical schemes are not-for-profit organisations, however, they rely on 'for profit organisations' to manage the risk or administer the medical scheme without adequate risk sharing. Trustees of medical schemes cannot allow this to continue.

The task at hand

Looking at comparative healthcare spend, public sector spend equates well to the healthcare spend in South Africa's peer countries. However, our infant mortality rate is substantially higher than that of peer countries. Our healthcare outcomes for curative tuberculosis treatment, for example, are also totally erratic when compared across different health districts. The alignment of strategy with budget allocation, capacity-build and health execution therefore needs serious attention.

Equally, to improve health outcomes at state facilites, properly empowered hospital managers that are accountable for the health outcomes of their healthcare facilities need to be in place.

It is clear both sectors face serious challenges. Preserving the status quo is no longer good enough. However, criticising the one sector, while motivating the status quo in the other, or motivating a change based on the inefficiencies of one sector when compared to the other, cannot be morally and intellectually justified. As a compassionate society, determined to solve a key developmental dilemma, we now all need to act rationally, reasonably, and systematically with a diligent application of proper fiscal discipline.

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