NHI will cost same as current healthcare

The latest research from the University of Cape Town’s health economics unit has found that spending on the national health insurance system (NHI) would roughly match what government currently spends on healthcare. This is according to the unit’s director, Di McIntyre.

The health economics unit is due to release the report in the next few weeks.
In recent months Econex director Nicola Theron has said the NHI would be unaffordable, at a minimum cost of R196-billion, and the South African Institute of Race Relations has warned that the NHI will threaten private healthcare.

But McIntyre said it was misleading to speak about how many billions of rands the national health insurance system would cost. “Yes, it will cost a lot of money, but what we’re talking about is something that is growing in line with GDP,” she said.

McIntyre said that even with the NHI and substantial increases in health-system utilisation, healthcare spending in the next 10 to 15 years would remain at roughly 8% of GDP. As it stands, South Africa spends just more than 8% of GDP on healthcare, more than any other country on the continent.

It is more than most upper middle-income countries and similar to some high-income countries. In real terms the healthcare budget for this year was R18-billion, and the budget for 2010-2011 will increase 16% to R21-billion. Yet, provincial health departments are chronically under-resourced and further hindered by poor management, fraud and inefficiency.

According to the public interest law firm, Section27, and the Rural Health Advocacy Project, which last week published leaked copies of the provincial assessment reports compiled during former health minister Barbara Hogan’s tenure, provincial health departments were R7.5-billion in debt as of April 2009. A 25-member ministerial advisory committee has been thrashing out ideas relating to the NHI since late last year.

Bevan Goqwana, the chair of the parliamentary portfolio committee on health said he expected the health department to report to Parliament on its progress within the next few weeks. Meanwhile, health sector stakeholders are showing a surprising degree of optimism regarding the NHI.

A snap poll at an NHI dialogue hosted by auditing firm KPMG in Parktown this week found that 47% of those in attendance thought the NHI would bring positive change.

Sven Byl, the global executive director for the healthcare sector at KPMG, warned stakeholders that they should make their voices heard in policy discussions because it would be difficult to change policy once it had been approved.

Byl said there was no right answer when it came to setting up an NHI system. Instead of copying what had been done in other countries, government should adapt elements that could work in the local context. The move towards universal health services is a growing trend around the world, though the financing models used to fund these systems differ from country to country.

Other global healthcare trends identified by Byl include the move towards electronic record-keeping and towards “alternative care settings”, such as clinics or the home. Byl said that in his native Canada, the state could deliver care for $1.60 a patient a day in the community, whereas it cost $3.50 in a hospital.

Byl singled out Singapore as the “future of how you develop a healthcare system”. The city-state spends 4.1% of GDP to insure all five million of its inhabitants. Government covers 80% of the total bill in acute care hospitals and patients pay the rest through a medical savings scheme.

In contrast, though 64% of South Africans rely exclusively on the public health sector, most of the money spent on healthcare is in the private sector.

Faranaaz Parker

Faranaaz Parker

Faranaaz Parker is a reporter for the Mail & Guardian. She writes on everything from pop science to public health, and believes South Africa needs carbon taxes and more raging feminists. When she isn't instagramming pictures of her toddler or obsessively checking her Twitter, she plays third-person shooters on Xbox Live. Read more from Faranaaz Parker

Client Media Releases

Durban team reaches Enactus World Cup semi-finals
IIE Rosebank College opens campus in Cape Town
Pharmacen makes strides in 3D research for a better life for all
UKZN neurosurgeon on a mission to treat movement disorders
Teraco achieves global top 3 data centre ranking
ContinuitySA's Willem Olivier scoops BCI award
MBDA to host first Eastern Cape Fashion and Design Council
Sanral puts out N2/N3 tenders worth billions
EPBCS lives up to expectations
The benefit of unpacking your payslip