Health care expert Paul Gross warns that Minister Nkosazana Zuma’s health insurance policy is fatally
HEALTH Minister Nkosazana Zuma’s national health insurance system should have reassured those who expected draconian solutions to problems of access and financing in health care.
But it remains flawed. I have looked at her committee of inquiry’s report, and judged their likely impact, based on health care reforms in other countries.
The committee proposed several core recommendations:
* Firstly, that a publicly funded primary health care system provide a comprehensive package of services, given and, to a large extent, determined by certain defined providers, who will serve a defined population. The package may change as time goes by and resources
The report rejected the type of cost-effectiveness analysis used in the 1993 World Bank report to define a minimum package of essential preventive and clinical services. Zuma’s committee argued that the absence of data in South Africa, as well as the “complex realities of health care provision at the clinical level”, and the public sector’s role in primary health as “health care provider of last resort”, militate against such definitions of a minimum (rather than comprehensive)
These arguments are misguided when the costs of “comprehensive” primary health care are calculated. The most likely outcome of this proposal would be a budget deficit of at least R3,5-billion, rising with time; queues at government primary health care facilities; exhausted primary health care drug budgets from day one; and cost-ineffective primary health care brought on by having to rely on the indefensible list of comprehensive services to be made available “free”.
A growing, competitive, high-quality, private medical sector would then be guaranteed, average prices of primary health care would rise, and, eventually, government intervention would be guaranteed as the public primary health care system finally admitted the reality of queues, gaps in service access and the growth of the private sector, which would threaten the public sector’s role.
* Secondly, primary health care nurses would be the front-line providers of clinical primary health care services within public facilities, with referrals to other health personnel as appropriate. The committee envisaged improvements to conditions of service for these nurses, which may include some combination of salary and capped fee-for-service type payment, or other reimbursement arrangements designed to maximise incentives for efficiency.
The most likely scenario, however, is that the required number of primary health care nurses will not be available on day one of the first year of implementation, private doctors or salaried doctors will not be willing to fill the gap, the average cost of all nursing services in the country will increase because of the stimulus of the increased salaries paid to primary health care nurses, and the consumer may not use public primary health care services as often as has been assumed, until they are sure that primary health care nurses offer care at least equivalent to that given by doctors.
* The third core recommendation is the creation of accredited private providers, envisaged as “… health care teams involving a range of personnel, including medical practitioners, primary health care nurses and allied health personnel”. The teams would be expected to provide a defined, comprehensive range of personal services to a registered patient group. The providers would need to be accredited and would then compete for contracts from the district health authorities. These services should ideally be under one roof, preferably as multi-disciplinary group practices. Solo general practitioners (or other health professionals) would not get accreditation because they would generally not be able to offer comprehensive services.
It is likely that private medical practitioners will react slowly to the challenge of accreditation and will not risk their own capital in the creation of dual facilities, as required by the report. Unused space and staff will remain inaccessible, and alternative structures will evolve in many geographical areas with funding from doctors, medical aid schemes and health insurance groups offering high quality primary health
* The fourth substantive recommendation is the creation of an essential drugs list, which will deal with 90 to 95 percent of the common and important medical conditions in the country.
The option of using cost-effectiveness analysis to select appropriate medicines (an option endorsed in Australia, Canada, the United Kingdom and other European Community nations) is rejected explicitly by the health department committee.
The essential drugs list medicines will be made available, at state tender costs, via retail pharmacies, which would add on a dispensing fee. Individuals choosing to use private practitioners for primary health care services would buy the essential drugs list medicines much cheaper than at present. Other drugs would be bought at the full retail price.
Dispensing doctors would only be able to sell essential drugs list medicines where there were no pharmacies nearby. This, the report estimates, would save R1,2- billion a year.
The committee’s consultant estimated that the pharmaceutical manufacturers would lose up to 12 percent of their R500-million turnover “if the national health insurance principle of free drugs was extended to the private sector”; and the 3 500 private pharmacies might lose R46-million (R13 000 per pharmacy) and the 4 000 plus dispensing doctors might lose R40-million (R10 000 per doctor), with both losses partially compensated for by a dispensing fee (R10 assumed by the consultant).
The most likely scenario with this proposal would be a steady decline in the average price of generic drugs, the unavailability of many effective brand-name medicines, and a steady deterioration in the quality of the nation’s drug supply if parallel importation of essential drugs list-type drugs is openly endorsed by the government.
* Fifthly, the costing model suggests that the average real (1995 price) cost per treatment falls from R72 in 1996/97 to R66 in 2000/2001 in one scenario, and from R77 to R69 in another. Assumed increases in use heavily outweigh the reduced real cost per treatment, and so total real costs per capita (1995 values) rise from R144 to R230 and from R153 to R240 in the respective
Apart from the implications of cost increases (which obviously caused particular problems for the committee, because it could not recommend a particular funding option), one critical estimate in the report is the shortfall in examination rooms. There is an apparent error in the spreadsheet model, which has led to the improbable results shown in one of the tables, where the model appears to predict a rapid increase in the deficit of examination rooms in 1998 and a decline in
My attempts to reproduce the results by the methodology shown in the relevant appendix gave different results for all years.
* Sixthly, all South Africans would have compulsory coverage for treatment in public hospitals.
Noting that many employed people use public hospitals without paying (even when they can afford to), the committee recommended that at least the costs of use of public hospitals might be covered by indemnity insurance, with the possibility of a specified maximum limit per beneficiary per year.
The committee’s costing of this package would mean an average payroll tax of 0,66 percent might be required. This is unrealistic.
In addition to the core package, employees could opt for broader coverage in a discretionary (supplementary) hospital benefits package
This funding proposal would raise an estimated R1,3- billion a year in hospital user charges, with the funds retained by the institutions. The committee believes that hospital governance would thus improve, and competition would evolve between public and private hospitals. Mandatory coverage would “prevent loss of low-risk and higher-income members, at least with respect to the core package, and would thus stabilise the (insurance) market permanently”.
This proposal for a basic public hospital insurance scheme emulates one lamentable feature of Australia’s current Medicare scheme, now under stress because of excessive government regulation of what must be covered in the “basic” or core hospital benefits package.
If the R1,3-billion tax necessary to fund it is a tax that cannot be avoided (because it is mandatory), and if the core table cannot be used by individuals to pay part of the costs of a similarly-priced level of care in private hospitals (the tax allows access to public hospitals only), then many South Africans will pay for their health care through six channels if they want to maintain their access to private medical and hospital
(1) the yet to be revealed (tax) funding for the new primary health care scheme (which, I assume, will be unavoidable); (2) the tax for the core public hospital benefits (unavoidable); (3) user charges for essential drugs list primary health care medicines and at public hospitals if they use such services; (4) out-of-pocket payments for private medical and hospital services (unless such services waive co-payments or deductibles); (5) private health insurance or medical aid scheme premiums; and (6) the substantial tax burden already contributed to general revenue.
* Potential losers include doctors, health insurance and medical aid schemes, employers, private hospitals and pharmaceutical manufacturers. The artificially unreal deadline of August 18 for comments should be relaxed if dialogue is to occur between government and the affected stakeholders.
The threats to employers — and future employment levels — are not easily ignored. The costs to employers of health care for their employees will not decline under the committee’s proposals. Employees would be able to argue about the need for employers to cover benefits above the basic hospital insurance package, and the current tax subsidy of employees for health coverage would disappear.
There is at least one offsetting positive message for employers: they could apply for funding to set up primary health care clinics, offering care to their employees and local residents, and collect at least the revenue from the primary health care drug co-payments.
In summary, the report recommends a mix of government policies which will change the economic incentives faced by employers and employees, and the economic behaviour of doctors, pharmacists, private and public hospitals, and drug costs.
There remains one fatal flaw: the report’s endorsement of an under-costed, all too generous, comprehensive primary health care scheme that may not improve health outcomes or contain total costs.
Gross is an Australian health care consultant who travels regularly to this country. He has been a professor of administration at the University of Saskatchewan in Canada and a member of the National Hospital and Health Services Commission in Australia. He is currently a director of Australia’s first National Health Technology Advisory Panel
Democracy and the rule of law
LAST week’s Mail & Guardian contained an article on Gauteng’s taxi warfare with the headline: “Jessie Duarte is ready to defy the Constitution”. In the article itself, Duarte is quoted as saying “By appealing to the Attorney General not to grant bail to people involved in the taxi war, I am going against the
We should be alarmed to hear members of the government making such comments. The statement attributed to Duarte not only misrepresents the Constitution, but it also sets it up as an obstacle to the achievement of law and order.
First, the Constitution does not require arrested people to be released on bail. The relevant provision states that such a person has the right to be released from detention “unless the interests of justice require otherwise”. Certainly, this puts the onus on the state to show that release would be contrary to the interests of justice. And this is entirely proper. No reputable court system can suffer people to be detained on the mere say-so of law-enforcement officers.
A court in a system which upholds the rule of law rather than the dictates of the executive cannot simply take the police’s word for it that any particular accused will commit further offences if he or she is released on bail. There must be some reasonable ground for believing this and, given such grounds, the Constitution does permit bail to be withheld. So much for the misrepresentation.
My second objection to the remarks quoted is more serious. The April 1994 elections established South Africa’s first democratically elected government, including a commitment to government by law under a supreme constitution. This commitment means that every state official — from the president to municipal workers — is subject to the values of lawful government contained in the Constitution.
But it does not mean that the Constitution is a hindrance to state action or prevents the government from responding to difficult problems. The Constitution sets up a framework in terms of which power can both be channelled and checked, so that no part of the government, and no individual, can deny anyone his or her basic human rights. This recognises the immense power vested in the modern state and reflects what we have learnt from massive abuse of power in the recent
The Constitution is a manifesto for this country which asserts that we have turned our backs on the lawlessness of the past. The Constitution, which expresses a commitment to human rights and a peaceful society, in fact gives the government the legitimacy to challenge lawless behaviour. If the Constitution is rejected as the source of authority, government action too easily becomes indistinguishable from the lawlessness that it attempts to stop. — Christina Murray, professor in the Department of Public Law, UCT
A Chinese puzzle for SA diplomacy
I WISH to respond to Chris Louw’s article “Beijing ready to breathe fire” (M&G June 30 to July 6). Firstly, it seems rather brazen of People’s Republic of China’s (PRC) Deputy Foreign Minister Wang to assume that diplomatic ties with PRC would be in South Africa’s interests. Surely this is a matter for South Africa to decide.
Secondly, it is debatable whether PRC gave the African National Congress any meaningful support during the apartheid years. The Soviet Union was the ANC’s benefactor. It seems, therefore, somewhat presumptuous of PRC to expect recognition for non-existent favours.
Thirdly, to state that President Mandela is being manipulated by members of his Cabinet is an affront to such an illustrious leader. Instead, he should be commended for not becoming embroiled in a matter that only the PRC and Republic of China (ROC) can resolve.
Fourthly, South Africa’s priorities are “investment, investment, investment; trade, trade, trade” — to quote South Africa’s ambassador to Germany, Lindiwe Mabuza. In this regard, ROC is streets ahead of PRC. South Africa’s trade with ROC still exceeds that with PRC, even if trade through Hong Kong is included. Moreover, ROC’s bilateral trade has consistently been in our favour.
In recent years, ROC nationals have invested over R1- billion locally, while its government has furnished R700-million in grants and loans to the Government of National Unity. Much more is in the offing — provided South Africa does not succumb to pressure from PRC. — V Chang, Former Chairman, WP Chinese Association,
The great Telkom swindle
THE report by Leon Perlman, “Telkom’s sheltered days are numbered” (M&G July 21 to 27) implies that while capitalists want to privatise Telkom, the South African Communist Party wants it to remain intact. I feel, however, that there is one point on which both should be fully informed in their own interest, namely the degree to which we are being exploited by this sheltered monopoly. To a large extent, the table below (figures in millions of rands) speaks for itself:
What one is inclined to overlook is that, in this instance, not only the profit after tax accrues to the shareholder (the government), but also the tax itself, as well as VAT, thereby giving a return which must surely be unique in the field of public rip-offs.
Normally, a business with a very high turnover operating in a stable environment can at best hope for a return on turnover of under three percent. In the case of Pick ‘n Pay, the figure is 1,43 percent and for Shoprite Checkers it is 1,56 percent. And, notwithstanding Telkom’s obscene profits, it charges a new subscriber R266 to be connected, which compares very poorly with Eskom’s charge of R35, including a readyboard and prepaid metering system. And, if its advertising expenditure of R75-million per annum is directed at gaining new subscribers (and what else might a monopoly advertise for?), each of these subscribers is costing it R406.
So it can easily afford to skip the advertising as well as the installation charge and come out ahead, while simultaneously making a contribution to the RDP far beyond anything it has done up until now. So, I say to your readers, whether you are communist or capitalist, be aware that you are being ripped off. Are you going to continue taking it lying down? — Paul Malherbe, Chairman, Telephone Action Group, Constantia
Don’t defame us witches
WITH reference to Eddie Koch’s report on a commission of inquiry into “witchcraft” killings in the Northern Province (M&G July 14 to 20), it is my wish that what I write will be used constructively in order to eradicate the superstitious fabrication of lies that has and is being propagated against the craft of witches.
The Concise Oxford Dictionary defines the word Pagan as “heathen; unenlightened or irreligious (person)”. On the contrary, Paganism as a religion can be traced to Proto-Neolithic times (c7500-5500 BC) in all cultures. Paganism has its roots firmly planted in the reverence for the magical and spiritual sanctity of planet Earth and its worship as the Great Mother Goddess.
Witchcraft, or wicca, as our Craft is now known, is a religion of pagan origin and tradition.
As a witch, I am beholden to the earth goddess and the wisdom of the elements of nature through choice and initiation. I am not sworn to serve demon or devil, for the devil of monotheistic religion does not exist in pagan philosophy. Evil is merely an imbalance which needs correction and not an independent force or
In 30 years as a witch, I have never once had the slightest inclination to sacrifice either animal or human. The thought is contrary to my understanding of the intimate relationship between the goddess and nature, for every individual part of nature possesses a spark of both the wisdom and power of the goddess and is therefore sacred.
The given definition of witch as one who, “through sheer malignancy, either consciously or unconsciously, employs magical means to encompass all manner of evil to the detriment of their fellow creatures”, is mendacious and defamatory.
To know the wind, one must stand in the wind, and not heed the rumours of the fish who knows only the ocean. To know the true nature of witchcraft, one must learn of the craft from a witch. Ignorant speculation may bring great harm. — Ariel Damon, Joubert Park
YOUR Man Friday Fanus Serfontein (M&G July 21 to 27), may be “the man to fix your heart” as Janet Wilhelm says, but some surgeons may also want your heart before you are really ready to part with it, and they are sure to find some colleagues to announce that you are “brain-dead”. After all, as Chris Barnard said in 1969: “A person is dead when the doctor says he is dead.”
Let’s face it, this suited Barnard admirably, but it sure scares me — and now more than ever.
In Australia, mistakes made in hospitals, mainly by medical practitioners and nurses, but also to a small extent by management, result in 14 000 deaths and 30 000 disablements annually (New Scientist, June 11 1995). I bet wrong “brain-death” announcements were not included in those figures.
Have we not all been more than a little brain-dead to believe Hippocratic perversions of reason for so long? On the other hand, it is not easy to undo these when one reads and hears about medical heroism almost daily, while mistakes are meticulously covered up or brushed aside as a reflection of a society that has access to “sophisticated, high-tech health care”.
“High-tech”? “Sophisticated”? “My voet in ‘n visblik!” is the only suitable expression I can think of in reply to that fine piece of twisted logic. — Mary Fanner, trained nurse, Pretoria
THE article “Let’s steal the Springbok from Verwoerd” (M&G July 28 to August 3) by Minister of Water Affairs and Forestry Professor Kader Asmal, shows a lack of political astuteness on the part of the minister.
The minister and those of his ilk must stop betraying the struggle. When the people of this country fought for freedom and self-determination, they were also fighting against symbols which today the minister so
These symbols remind us about the atrocities which were committed by the apartheid regime on the indigenous people of this country; they remind us of forced removals; they remind us of Sharpeville day; they are symbols of oppression.
Let me also advise the minister that instead of advocating the retention of these symbols, we must inform the comrades in the corridors of power to release those freedom fighters (both MK and Apla) who are still languishing in the jails of this country.
The minister reminds me about a saying which goes thus: “If you chain a dog for a long period, the day you unchain it, it will never move away from the chain.” Let the minister move away from the chain. Move away from Verwoerd’s symbols. — Gija Sipho Siwela, Pan Africanist Congress, Lowveld Region