FANews
FANews
RELATED CATEGORIES
SUB CATEGORIES Featured Story |  Straight Talk |  The Stage | 

Trying to achieve balance could be difficult

09 October 2019 Myra Knoesen
Michael Settas

Michael Settas

There are mixed feelings towards National Health Insurance (NHI). Some say it will come at a cost to those in the private sector, while others believe trying to achieve a balance between a private system and the NHI system will be difficult.

Perhaps, clarity is the issue here. The Bill does contain a lot of details; however, numerous details still need to be finalised. 

Michael Settas, Independent Strategic & Technical Healthcare Advisor recently wrote an article on how the NHI will impact the private health sector. 

The regulatory framework

“A short trip down memory lane tells us that when the first draft of the Demarcation Regulations (DRs) was published in 2012, it effectively banned Gap Cover products outright – even though Gap Cover products had already been in existence for around two decades. National Treasury was overwhelmed – several hundred public submissions were received from a wide array of affected stakeholders criticising the draft,” said Settas. 

“Three more iterations of the draft regulations ensued over the following four years, and finally, the DRs were passed in 2016, not only allowing Gap Cover but giving it quite a manageable and reasonable regulatory framework,” continued Settas. 

So, what does this have to do with NHI? According to Settas, quite a bit it would seem! 

He said, “rarely has any piece of proposed legislation brought about such frenzied commentary, espousing as vast an array of diverse views as the NHI Bill released on August 8 this year.” 

There is much uncertainty

“One frequent critique of this Bill is that there is much uncertainty about the various role players in this future NHI world and vagueness on how much of what it is promising will be implemented. The Minister of Health established the NHI Advisory Committee ten years ago and the dearth of technical policy work since then, especially on a proposal of such magnitude, should be deeply concerning to all citizens,” said Settas. 

“It is likely that government is going to have its hands full in trying to get this NHI Bill passed in its current form. Civil society groups, medical schemes and the medical fraternity are deeply concerned on the damaging parts of the Bill and appear resolute in lobbying government to amend the Bill. Some lawyers are warning of legal action if amendments are not made,” added Settas. 

“No right-minded person would disagree that to attain full scale universal health coverage (UHC) is laudable. But it is obvious that the greatest divergence on policy amongst stakeholders is not on attaining UHC, but rather on ‘how’ UHC should be achieved and what is the best method for SA Inc,” emphasised Settas. 

“It is an irony that South Africa already does have UHC. Sadly though, endemic corruption has all but robbed the public healthcare sector of its ability to deliver on government’s constitutional obligation under section 27 of enabling the progressive realisation of access to healthcare. Comments last year, by both the Auditor General and the Health Ombudsman, have painted a bleak picture of the public health department, describing them as ‘in a crisis’ and ‘collapsing’,” continued Settas. 

According to Settas, some unknown aspects of NHI are not so much unanswered, as they are unanswerable. As an example, he said everyone is guessing on what the NHI price tag is going to be. “What benefits will it cover? How many possible structures were examined that could achieve UHC? The policy process has been silent on these vital matters,” he said. 

NHI on the private healthcare sector

“So, let us look at the impact of NHI on the private healthcare sector – given what we know thus far,” added Settas. 

Settas said there is no doubt that the private sector in South Africa has a long track record, is well entrenched and offers world class medical care. Where it does fall short, Settas said, is that it is an expensive and sometimes wasteful system. And this is where government is taking the moral high ground in arguing that NHI should be a complementary system, i.e. “We, the government, need to rescue the private sector from its own vices. Hence, we will take over the provision of healthcare for all South African citizens, including those who currently pay for their own private care”

“It is somewhat aggrieving though that these private sector vices were largely imposed by government – the Health Market Inquiry recently confirmed this. The cost increases that have afflicted the private health sector over the past two decades have been orchestrated to a greater degree by the unbalanced regulatory framework that was imposed upon it in 1998. The burden of the social solidarity principles of open enrolment, community rating, Prescribed Minimum Benefits (PMBs) and regulation eight – in the absence of mandatory participation - have no doubt had a profound impact on costs,” said Settas. 

“So, the big question distressing the private sector is, will NHI definitely be a complementary system? Or are we seeing what has become a common trend of policy contradictions in government proposals. Clause eight of the Bill states that patients can bypass the clinical referral pathways of NHI and then make use of their own providers and claim such bills from their medical scheme insurance. Clause 33 simultaneously states that once NHI has been implemented, medical schemes will only be allowed to cover services not covered by NHI, i.e. a complementary system. And this is further complicated by a clause in the Medical Schemes Amendment Bill, published in June 2018, stating that the Registrar may restrict medical schemes to only cover non-NHI services,” emphasised Settas. 

In the absence of clarification from government on the above, any proffered answers remain conjecture. 

One universal truth

So, let’s have a look at the attributes of countries that have attained UHC. Out of 193 countries comprising the United Nations, Settas highlights that 58 have built systems delivering UHC. But importantly for this analysis, many varied and differing systems were built in achieving the same desired outcome of UHC. 

“No developing economy has ever built a single-payer complementary NHI equivalent covering the entire population, let alone one that delivers a comprehensive set of medical services. Additionally, no other country has built comprehensive UHC that is 100% free at the point-of-service. User co-payments are necessary and common place in all national healthcare systems in order to manage consumer demand. But in SA Inc populism abounds - NHI promises not only comprehensive care but it is also 100% free at the point-of-service. So, what does all of this tell us? It tells us one universal truth about government policies the world over. Economic performance controls governments - not the other way around,” Settas emphasised. 

“Given where South Africa is right now economically, there is little chance that the NHI will be able to receive significant government funding. GDP growth is at 0.6%, tax collections are down, the budget deficit at 6.3% with government debt at 60% of GDP – and mounting faster than National Treasury can count the number of SOE bailouts it has provided. Even if the remote chance of additional taxes on a narrow and stressed tax base comes about, the extra funds will almost certainly be deployed to more urgent fiscal needs in order to save the country from the possibility of an IMF bailout – something which government wants to avoid virtually all costs,” added Settas. 

“None of this points to South Africa being in a position anytime soon to build NHI. Once economic realities come to the fore, it will be realised that a willing and able, voluntarily financed private healthcare sector, covering nine million citizens, is a national asset contributing to, rather than impeding, attainment of UHC. Once one looks past the rhetoric of government’s NHI promises, the only conclusion possible is that the private healthcare sector is not going to disappear or change materially anytime soon,” concluded Settas. 

Editor’s Thoughts:
As Settas pointed out, no developing economy has ever built a single-payer complementary NHI equivalent covering the entire population, let alone one that delivers a comprehensive set of medical services. Given where South Africa is right now economically, is South Africa in a position to build NHI? If you have any questions please comment below, interact with us on Twitter at @fanews_online or email me - myra@fanews.co.za

Comments

Added by Myra, 09 Oct 2019
Hi Kenny,

Yes, he was referring to Japan.

He listed Japan as an example.

"Japan implemented NHI more than 50 years ago. At that point it was a few years after the Second World War. Japan was almost in ruins. They were in a worse situation than the SA economy is in now. Now Japan boasts the longest life expectancy for citizens," he said.
Report Abuse
Added by Kenny Williamson, 09 Oct 2019
Thanks for this. Then what country is that monister of health referring to that has done this?? i think he said Japan??
Report Abuse

Comment on this post

Name*
Email Address*
Comment
Security Check *
   
Quick Polls

QUESTION

No developing economy has ever built a single-payer complementary NHI equivalent covering the entire population. NHI promises comprehensive care but it is also 100% free at the point-of-service. Is this practical?

ANSWER

It is doable but collaboration is key
South Africa is not in a position to build NHI
The only conclusion possible is that the private healthcare sector is not going to disappear or change
There is little chance that the NHI will be able to receive significant government funding
A E fanews magazine
FAnews August 2019 Get the latest issue of FAnews

This month's headlines

Create designer policies through AI
Are advisers in a precarious position?
A claim, COIDA and a dog bite
Non-disclosure never an innocent fraud
Prescribed assets: The threat to pensions
Cannabis and the issue of trust
Getting the most from disability claims
Subscribe now