A head-in-sand approach to the healthcare crisis
Crisis! What crisis? This is how incoming health minister Aaron Motsoaledi responded to a raft of shocking media revelations that surfaced during the first weeks of his tenure. We understand the rather unfortunate legacy inherited from his predecessor, bu
Doctors dance their lunch hours away
After years of inadequate funding the incoming minister of health (and the people of South Africa) inherit a crumbling healthcare infrastructure, a bungling administration and thousands of overworked and underpaid healthcare professionals. There are more than 11 000 vacant doctors’ posts while staffing levels of nurses at the country’s 386 public hospitals are around 50%. Interns earn as little as R9 000 per month after completing a gruelling 7-year degree. According to a recent South African Medical Association (SAMA) study, junior doctors earn less than 50% of the salaries of similarly ranked public sector accountants. And specialists take home a fraction of what public sector engineers make. The recent Occupational Specific Dispensation (OSD) agreement reached with nurses hasn’t been extended to doctors.
The public healthcare service has deteriorated to such an extent that we hear about doctors ‘hiding’ crucial implements and drugs in case they need them on their rounds – babies being kept in boxes because incubators are in short supply – and baby formula running out because suppliers aren’t paid on time. No wonder doctors are crying “enough!” Apart from protesting outside hospitals during their lunch hours, doctors recently took to the streets in Pretoria to make their grievances known. Poor pay and working conditions can be attributed to Treasury’s declining per capita allocation to public health since 1996. They only returned to 1996 funding levels (in real terms) in 2006!
Poor financial management is compounding matters further. A recent series of articles in The Times followed public healthcare institution progress in securing baby formula for its patients. It took more than nine days to secure supplies following the resolution of the supplier payment dispute. Tender processes are openly abused at all levels of the purchasing chain – and despite many scandals reaching the public domain – few transgressors are ever brought to book. The latest scandal involves Patrick Maduna, chairman of the Gauteng health department’s acquisition council. He allegedly meddled with tender processes to ensure his preferred bidder secured the business. A tender to supply ultra-violet irradiation units to 12 Gauteng hospitals was awarded to the most expensive bidder with the lowest technical score. Government paid R33.6m over budget – and R31.2m more than the cheapest of the three short-listed suppliers. Similar abuses surface in the press at regular intervals.
The National Health Insurance smokescreen
Government’s solution to this mess boggles the mind. They think that by introducing NHI they will resolve the nation’s healthcare woes. They couldn’t be more wrong. There are three fatal flaws in the NHI proposal. The first is cost. The second is time. And the third goes to the motivation for it. The NHI is being driven by the ruling party in a bid to fulfil its promise of improved living standards for the poor rather than sound business principles.
It doesn’t matter which way you crunch the numbers, South Africa simply cannot afford a comprehensive NHI. The best proxy for costing an effective health system comes courtesy of South Africa’s medical schemes industry. The Council for Medical Schemes 2007/2008 Annual Report shows that each of the country’s 7.5m private medical scheme beneficiaries spent R641.60 on relevant healthcare expenses over that period. Experts tell us the NHI will achieve savings of at least 20% on this number. Assuming an average per beneficiary per month cost of R513.28 (R641.60 less 20%) it would cost in the region of R292bn to provide top quality healthcare to all of South Africa’s 48.5m citizens. Where will this money come from? We get R64.7bn if we use the money already contributed by medical schemes members. But you’re still short R227bn. To put this number in perspective, National Treasury only allocated R10bn to Health Services in the 2009/2010 budget!
We’ve made a number of assumptions to generate these rough numbers. We assume all contributions are pooled in a single fund, administration expenses are negligible, levels of healthcare service are similar to those experienced in the private healthcare model and prices are smoothed between public and private providers at 20% less than current private rates. Public healthcare facilities would have to charge patients as they would have to be self-sufficient and receive no further government funding. Can government expect taxpayers to chip in another R200bn? They’d have to double the tax rate to make it work, because the total revenue from personal income tax for the 2009/2010 year is R207bn.
A five year implementation – not very likely
A successful NHI requires comprehensive planning, buy-in from all stakeholders in both the public and private healthcare sectors, general acceptance from the public and adequate and functional healthcare resources. We know the ruling party is in possession of a 200-page draft proposal courtesy of its NHI task team, which indicates some basic planning has been undertaken. But that discussion hasn’t even entered the public domain. Little wonder the ruling party’s desire to implement NHI within five years (some even suggest a basic framework by April 2009) is attracting plenty of negative press.
The Mail & Guardian Online, in a piece titled A Legacy of Incoherence notes “It is in this context of system failure that the government is seeking, hastily and without public debate and scrutiny, to introduce a national health insurance scheme.” They ask how South Africa hopes to succeed when Britain and Scandinavia struggled despite having “functioning hospitals, efficient state bureaucracies and buy-in across the social spectrum when they introduced NHI.”
Editor’s thoughts:
The biggest fear among South Africa’s 7.5m medical schemes members is that an NHI implementation will threaten the standards of healthcare they currently benefit from. Government isn’t going to be able to raise enough funds to provide the desired service levels. Do you think government will ‘nationalise’ medical schemes’ solvency funds when it implements NHI? Add your comment below, or send it to gareth@fanews.co.za
