Rather the devil you know... South Africa is not ready for this grand design!

Gareth Stokes, FAnews Online Editor

National Health Insurance (NHI) is coming. Despite serious concerns over infrastructure, human resources and affordability, government is pushing ahead with a “financing system that will make sure that all citizens of South Africa (and legal long-term res

Few question the need for a comprehensive and inclusive national health system, but each and every citizen should grill government on whether NHI is indeed a “cure-all” for the abysmal state of public health! We were hoping that the long-awaited government “Green Paper” on NHI, published in the Government Gazette, 12 August 2011, would provide answers. But after scrutinising this document – and spending a few minutes reading the NHI Q&A posted on the Department of Health (DoH) website – we were once again left with a sense of social engineering for the sake of it. That government wants to push ahead regardless of the many warning signs – suggesting that the motivation for NHI might be about more than simply “helping the poor”. Why are we so cynical?

Sounds like a medical aid to me...

Our first concern is that the arguments for NHI are often distorted. Principle among these is the claim that the current dismal state of public healthcare services is somehow linked to the selfishness of medical scheme members and the greed of private healthcare providers. In addition, government contends: “In spite of the fact that [we] have tried, since 1994, to ensure that everyone in this country has equitable access to necessary healthcare services… large numbers of our people continue to die prematurely and to suffer unnecessarily from poor health.” But they haven’t been trying. In fact, despite burning through a hefty slice of GDP each year the public healthcare sector has gone downhill over the past two decades. And it has failed due to pathetic administration, poor attitudes among healthcare workers and a total lack of political will – a lack of “trying” by all stakeholders if you prefer – rather than for lack of funds.

Our second concern is that government is addressing the inequities in the healthcare system – which they say are largely caused by the medical aid schemes and private suppliers – by introducing a new healthcare system comprising a massive medical aid scheme (the NHI Fund) that will largely purchase services from private suppliers. Government will simply take over from medical schemes as the administrator of the same poisonous “solution” they oppose so vehemently. The new system erodes individual choice too, in that the cost of belonging to the mandatory NHI – yet to be fully disclosed – will probably force existing private medical scheme members to opt out of their preferred healthcare option. Basically the Green Paper calls for a state-administered NHI Fund which will be difficult to discern from today’s Discovery Health Medical Scheme or GEMS… The ominous warning signs are already there: co-payments, exclusions, risk pooling, rising contributions – with healthcare inflation making the system less affordable each year.

“The state is committed to offering as wide a range of services as possible,” they begin… But already the list of exclusions is extensive. Examples of what the NHI package will exclude are: cosmetic surgery that is not necessary or medically indicated, expensive dental procedures performed for aesthetic purposes, expensive eye-care devices like trendy spectacle frames, medicines not included in the National Essential Drug List (except in circumstances where the complementary list has been approved by the Minister of Health) and diagnostic procedures outside the approved guidelines and protocols… Sound familiar?

Costing an arm and a leg

An existing private medical scheme member pays a monthly medical aid contribution, a contribution to the public healthcare system via taxation, and co-payments for treatment shortfalls. Under NHI this individual will end up paying a fourth tithe (an additional tax most likely deducted from payroll). We still don’t know how much we will have to contribute. However, UK taxpayers pay as much as 12% of their gross salary from very “average” salary bands. And they have a much larger contribution base than we have in South Africa!

What about the private sector – hospitals, clinics and medical schemes? Government claims the NHI will not destroy the private sector, but rather make it more sustainable by making it levy reasonable fees… Huh? They’re simply reverting to the old argument that government can procure cheaper services by buying in bulk. Thing is – if Private Hospital A is running at capacity and getting R10k per procedure – how will they be better off when government tells them they’re only getting R2k from today forward? We were rather surprised when various private medical schemes came out in support of government’s NHI framework. According to Fin24.co.za, Discovery Health CEO Jonathan Broomberg said his company strongly supported the NHI framework in the policy paper and was committed to helping government to achieve the objective of quality healthcare for all.

Back in September 2009 we attended one of his presentations where he said the NHI was a first world “ideal” model that ignored some of the realities of our country.  At the time he questioned the affordability of the system. He observed that it would cost around R249bn to roll out a comprehensive benefit package to all South Africans, while a package equivalent to that offered by private medical schemes would require nearer R325bn! To raise this kind of money would put massive stresses on the country’s tax base.

But by far the biggest concern was with the shortage of healthcare workers... Back in 2009 Discovery reckoned it would take 70 000 additional hospital beds, 140 000 new general practitioners and 410 000 extra nurses to extend private healthcare benefits to all South Africans. Is there a quick fix for these shortages? It seems government has found a way to manufacture the scarce resources this system so desperately needs to succeed – one of the classic phrases in this paper is the promised “increase in production of nurses / doctors / specialists” which will happen between 2012 and 2014…

Another major concern was the offer of benefits to all long-term residents. A recent “spot check” at the Zimbabwe border, conducted December 2010, flagged 3,000 Zimbabweans with fraudulently obtained South African Identity Documents. Would this qualify them for NHI healthcare benefits? The assumption must be yes – because they currently enjoy every other welfare service on offer. To date not one of the above issues has been addressed!

Another Road Accident Fund in the making

There are plenty of scary assumptions in the latest document too. Government says: “The intention is that the NHI benefits, to which all South Africans will be entitled, will be of sufficient range and quality that South Africans have a real choice as to whether to continue medical schemes membership or simply draw on their NHI entitlements.” Maybe so – but that’s the same great “service” the RAF promised road accident victims. The NHI is already looking a bit like a grandiose employment project that will cost billions each year in salaries and administration expenses. We’re going to get an NHI Fund complete with CEO and management team, probably drawing at least Transnet-equivalent packages… We will also have to establish and pay for employees in the Office of Health Standards Compliance to inspect and ratify all healthcare facilities. And of course these guys will need shiny offices to operate from. And then there’s the promise of an NHI Information System – which will certainly have the connected IT firms queuing up to bid!

South Africa is third world and we really don’t need this complex system – especially when most of the NHI functions are already carried out by the private sector. How is the average high school student NHI employee going to handle terms such as “risk adjusted capitation system for reimbursement of primary care level, public hospital global budgets and a case mix or grouper system for inpatient reimbursement…”

The time frames are crazy too. The system has yet to be agreed and there are plans to train 5, 000 Municipal Ward-based Primary Health Care (PHC) Agents – who will then each set up a PHC team – beginning December this year. It’s not clear where these skilled individuals will be sourced from, unless the DoH really believes it can train up a PHC agent in the three months between December 2011 and March 2012 as claimed. There are also plans to appoint school-based nurses, from the nursing surplus South Africa apparently suffers form.

Editor’s thoughts: What should South Africa do to address its healthcare concerns? I’m not convinced NHI is the answer. But if it has to happen the 14-year implementation must be pushed back at least five years, to give government an opportunity to address the four critical success factors they identify in their latest document. I get a feeling we’re looking at between 3% and 6% of gross salary as an initial NHI contribution – can you afford it? Please add your comment below, or send it to gareth@fanews.co.za