Dealing with a world-wide challenge

As medical scheme increases are announced and implemented, healthcare has been firmly placed under the spotlight. This is not to say that healthcare has never been in the spotlight. There have been a number of reports in the industry during the year which at times has made the public question the sustainability of the industry and how the National Health Insurance scheme will fit into the picture.

A coupled industry

Many economists have pointed out in the past that the South African economy is a coupled economy. Despite unique challenges, challenges that exist globally will most likely have an impact on our own situation,

In its 2016 Annual Report, Professor Yosuf Veriava – Chairman of the Council for Medical Schemes – says that this is particularly evident in the healthcare industry.

“The funding of healthcare services has not been the greatest success story of our time, especially here in South Africa where we are all too aware of our shortcomings in this arena. We are however not alone in our quest to find a workable, cost-effective healthcare funding model. Healthcare funding systems worldwide have encountered several problems of their own. When studying the healthcare provision models of a number of countries throughout the world, it is abundantly clear that healthcare is in crisis at a global level,” says Professor Veriava.

Awareness is key 

Awareness and forbearance are two virtues that need to be exercised when assessing the South African healthcare system and where the NHI will fit into it. Professor Veriava points out that cognisance should be taken of international experiences when implementing our own universal healthcare system.

He adds that while these experiences do not always have relevance for local circumstances, they do highlight the possible challenges that may be faced when implementing different kinds of national health systems.

“The NHI is intended to ensure that all South Africans will benefit from healthcare financing on an equitable basis. The CMS believes that an initiative which seeks to ensure access to quality and affordable health services for all based on their health needs, irrespective of their socio-economic status, is critical to the very nature of our nation and should be supported by all South Africans,” says Professor Veriava adding that the CMS supports the Department of Health’s initiative to implement such a system.

This however does not answer the key question of how the NHI will fit into the current healthcare industry; a question that only the Department of Health can answer.

The cart and the horse

But are we not putting the cart before the horse? How can we even think about the role that the NHI will play while we cannot even get a handle on the uncontrollable costs that are inherent in the industry? How can we build a cost effective system in this environment?

“The vacuum that has been left because of the lack of pricing tariffs in the industry, where providers are charging above medical scheme rates for their services, places an onerous burden on the already hard pressed South African healthcare consumer. Hence, accessibility and affordability are more important than ever. For this industry to remain sustainable, we would have to pay more than lip service to the notion of affordability and accessibility,” says Professor Veriava.

These are strong words, but empty promises remain empty until there are visible signs that an effort is being made to resolve this impasse.

The managed care debate

There has been much conjecture in the market about the role of managed care and whether it has in fact made a difference. Professor Veriava says that he is convinced that without managed care, the healthcare industry would be in a much worse situation than it is today. He added that it has made a positive contribution to the financial sustainability of medical schemes and is evident in the data shared by medical schemes.

However, since its introduction within the private healthcare funding arena, there has been much debate about whether managed care is adding the value it is supposed to add, namely to reduce healthcare expenditure while improving patient outcomes.

“If managed care is indeed making a difference, schemes, administrators and managed care organisations will have to improve their systems to collect relevant information demonstrating managed care’s value proposition and ensuring that health outcomes for beneficiaries continuously improve,” concluded Professor Veriava. 

Editor’s Thoughts:
A lot of this is idealistic in nature. However, it all hinges off containing the rampant costs that currently ravage the healthcare industry from a consumer perspective. Yes, the NHI can play a vital role in improving the health of the nation provided costs are driven down. No successful industry has thrived without reducing costs. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.