National Health Insurance: finding a model to suit South Africa

01 October 2008 Heidi Kruger, Board of Healthcare Funders

Although the concept of universal coverage enjoys the support of most people, finding a model which will suit the South African environment will not be an easy task.

At the recent Board of Healthcare Funders' conference, Dr Zweli Mkhize said that it is not a matter of 'if', but rather "when" there will be a NHI in South Africa. There are a number of critical aspects which must be considered when reflecting on such a system.

Benefit package

In designing a benefit package, the main aim must be to provide the most benefits for the most people, given the pool of funds available. In an ideal world the NHI package would cover a comprehensive package of primary and preventative benefits as well as referred and hospital care equally for every member of the population, with no rationing. But even in the most sophisticated health systems in the most developed countries in the world, this benefit packages are often is not fully comprehensive. The queues in the UK and the need for top-up cover in France, are just some cases in point.

Costing issues

Costing this package will be challenging for a number of reasons. On the one hand, using public sector data will be difficult because of the rationing policies in the public sector and because ICD 10 coding (diagnosis codes) are not routinely used and collected, and the tariff schedule used - the UPFS (Unified Patient Fee Structure) - is not reflective of the actual costs of providing the benefit. In the private sector, the collection of ICD 10 codes is mandatory, so costing of the PMB package should be possible, but it is difficult to know whether the utilisation patterns in this sector are accurate, given the examples of procedures such as deliveries where 75% are performed by C-Section when the international average is in the region of 21%.

Revenue collection

Assuming that the costing had been accurately done, and that a reasonably comprehensive benefit package was affordable, an earmarked tax from payroll seems the most logical manner in which to collect these funds. Critical to this process will be buy-in from labour and employers alike.

Single or multiple funds

Another key consideration is whether purchasing should be left to a single fund or multiple funds. The issue of choice under the NHI system may well be one which will affect consumers the most.

Providers of Service

Ideally, charging for the NHI package will fall under a regulatory framework which will ensure fair and transparent fees for providers of service. This, together with the increase in volumes for providers will hopefully prevent further migration of skills and may entice back those providers who had left the country to work in other National Health environments.

The upliftment of the public sector to be the vehicle for the provision of the NHI package is critical and there may well be an opportunity for funders to contribute to this process. Creating incentives for healthcare professionals to return to the public sector must also be explored and implemented to ensure high quality and good outcomes.

Top-up cover

Top-up cover is common in most countries offering NHI. The question will be whether medical schemes compete with insurance companies or whether the current principles of social solidarity will remain, offering some protection to schemes.

Whatever the ultimate model, the progressive realisation of universal coverage will accelerate a much needed reorganization of the current healthcare system into one which is hopefully more affordable, equitable and accessible than the current one.

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