The private sector
Since the green paper on the introduction of a National Health Insurance (NHI) scheme first appeared, there has been much discussion and a burst of activity among health professionals, academics, pressure groups, institutions in the private and public sectors and public servants.
The national planning commission has held extensive discussion with the public and a range of individuals, groups and government personnel in various ministries on the subject. The views expressed here are fully explored in the commission’s documents available at npconline.co.za.
Central to any debate on the insurance scheme is clarity about what is intended by the state. It could be argued that the use of the term “NHI” has provoked a reaction from the private sector that could have been avoided by employing the much more acceptable words “universal coverage”. It is, after all, a key goal of the insurance scheme, as emphasised by the department of health. In fact, “universal coverage of healthcare” has been defined by the World Health Organisation to mean more than straightforward access. The term covers the “aim for affordable universal coverage and access for all citizens on the basis of equity and solidarity”.
A recent publication from three African countries, including South Africa, adds the following to the aims of universal coverage: to “provide all people with access to needed health services (including prevention, promotion, treatment and rehabilitation) of sufficient quality to be effective” and “to ensure that the use of these services does not expose the user to financial hardship”.
The inclusion of “affordability” and “access” with “equity” and “solidarity” elevates the implications of the words to include some key goals of the commisssion.
Disparities
“Equity”, in the context of the huge disparities between rich and poor, especially blacks, in South Africa, is an irreducible target of many of the programmes identified by the commission.
Building “solidarity”, forging social compacts and gradually creating the bonds of social cohesion in a nation fractured by race, colour, class, gender, location and separate histories underpins the priorities of the national plan.
The plan identifies the social determinants of health as the greatest priority. These include social gradient, stress, early life, social exclusion, work, unemployment, social support, addiction, food and transport. The plan repeats the need to strengthen the health services and optimise the management and prevention of major causes of mortality, morbidity and disability. In addition, the plan also focuses on other social determinants linked to health, such as crumbling infrastructure, a resource-intensive economy, corruption, education, spatial divides, a poor public service and a high disease burden.
There are, in fact, four “colliding epidemics” described in detail in recent publications that undermine the health of the population, namely deaths from maternal, newborn and child disorders, HIV/Aids and tuberculosis, violence and injury, and noncommunicable diseases such as diabetes, cardiovascular disorders and cancers.
Why is an NHI necessary? In addition to the destructive effects of the social and economic factors already mentioned on the health system, there are a number of inequities that should be emphasised. The Constitution has outlawed any form of racial discrimination and guarantees the principles of socioeconomic rights, including the right to health. Large numbers of the financial and specialised personnel for health are located in the private health sector, which serves a minority of the population.
Underresourced
Medical schemes are the major purchasers of services in the private sector, which covers just more than 16% of the population. The public sector is underresourced relative to the size of the population that it serves and the burden of disease it bears. The public sector has disproportionately less human resources than the private sector, yet it has to manage significantly higher patient numbers.
There are striking inequities to make the case for an NHI compelling. Although the public and private sectors contribute equal proportions (43% and 44% respectively) to the total financing of healthcare, the private sector covers only 16% of the population and the public sector 68%.
Over a 10-year period from 1996 to 2006, the healthcare expenditure per capita was many times higher in the private sector. These trends are narrowing. Health services favour the rich and the top quintile, which has the least need for healthcare, obtains the greatest benefits, whereas the lowest 20% with the greatest need gets the least benefits. Those with the lowest incomes pay more than 14% of their incomes towards medical schemes, whereas those with the highest incomes pay about 5.5% for such contributions.
Medical scheme contributions between 1981 and 2010 outstripped increases in consumer price index inflation, which suggests large costs in private medicine. Most of the expenditure in the private sector goes towards private hospitals, specialist charges, medicines and laboratory tests.
The green paper draws some broad outlines of the insurance scheme, which includes a revamping of primary healthcare in terms of district management teams, specialist support teams, district hospitals, community health centres, private healthcare clinics and community-based clinics.
Sin taxes
There has been much disagreement about the cost of the scheme. The health department estimates it will rise to between R255-billion and R375-billion by 2025. A recent report from advisory firm KPMG estimates a cost of R10.4-billion a year, to be raised from a 1.1% increase in income tax, a 0.8% increase in VAT and “sin taxes”.
The objectives of the insurance are mainly to improve access and the quality of health services, strengthen the public sector, reduce risk through the efficient mobilisation and control of key financial resources, and procure services on behalf of the entire population.
There are a number of shortcomings in the green paper, including the need for more research, human resource availability and the incorporation of private doctors into the public service. A major shift from the current dysfunctional system to an effective and efficient system of universal coverage funded through an insurance system requires a massive investment in policy and resources.