Motsoaledi: NHI may reduce medical costs

2011-08-12 13:40

Cape Town - The National Health Insurance (NHI) scheme, unveiled in a green paper on Friday, may be good news for those paying what the document describes as "exorbitant fees" for private health sector services.

"It will actually make the sector more sustainable by making it levy reasonable fees," Health Minister Aaron Motsoaledi said in a statement marking its release.

The green paper pulls no punches on the high cost of private healthcare.

"Over the past decade, private hospital costs have increased by 121% while over the same period, specialist costs have increased by 120%.

"This means that the private healthcare sector will have to accept that the charging of exorbitant fees completely out of proportion to the services provided has to be radically transformed," the document states.

Such overpricing had led to the collapse of many medical schemes over the past decade.

"A number of medical schemes have collapsed, been placed under curatorship, or merged. They have reduced from over 180 in the year 2001, to about 102 in 2009. This was mainly due to overpricing of healthcare."

In an effort to keep their heads above water, many schemes increased their premiums, often at rates higher than CPIX (consumer inflation).

"When this was not successful, the schemes resorted to decreasing members' benefits. This has led to an increasing number of members exhausting their benefits mid-year or towards the end of the year."

The extent of co-payments that scheme members were required to make "confirms that the current system does not provide full cover".

The green paper, accepted by cabinet on Wednesday this week, proposes a phase-in of the NHI over the next 14 years. Once in place, it will cover all South Africans and legal permanent residents.

"Membership to the NHI will be mandatory for all South Africans. Nevertheless, it will be up to the general public to continue with voluntary private medical scheme membership if they choose to.

"Accordingly, medical schemes will continue to exist alongside NHI. However, there will be no tax subsidies for those who choose to continue with medical scheme cover.

"The exact form of services that medical schemes will offer may evolve to include top-up insurance. However, no South African and legal permanent resident can opt out of contributing to NHI even if they retain their medical scheme membership."

Noting that the World Health Organisation (WHO) recommends that countries spend at least 5% of their gross domestic product (GDP) on healthcare, the green paper finds South Africa is not getting the sort of return on its health spending it should be.

It places most of the blame for this on "inequities" between the public and private health sectors.

"South Africa already spends 8.5% of its GDP on health, way above what the WHO recommends. Despite this high expenditure, the health outcomes remain poor when compared to middle-income countries."

According to the Council for Medical Schemes, the private health sector in South Africa covers just 16.2% of the population.

In his statement on Thursday, Motsoaledi said for the NHI scheme to succeed, service in public hospitals had to improve and the cost of private healthcare "tackled equally seriously".

"I cannot overemphasise this, but clearly, without these two, the NHI will not be viable," he said.

Funding of the NHI scheme would include an obligatory levy on salaries. The level of income above which NHI contributions would be compulsory still had to be determined by National Treasury. According to a table at the end of the green paper, the start of compulsory contributions appeared to be at least five years away, if not longer.

According to the document all NHI revenue collection will be done by the SA Revenue Service, including the mandatory contribution.

On the cost of setting up the NHI, it will require R125bn next year, rising to R255bn in 2025.

"Resource requirements... increase from R125bn in 2012, to R214bn in 2020, and R255bn in 2025, if implemented gradually over a 14-year period."

The current health medium-term expenditure framework budget is R101bn. This figure does not include health spending by departments such as defence and correctional services.

Spending on medical scheme contributions was R90bn in 2009, the most recent year for which figures are available.

According to the green paper, the NHI aims to offer benefits "of sufficient range and quality that South Africans have a real choice as to whether to continue medical scheme membership or simply draw on their NHI entitlements".

It says all members will be issued with an NHI card.

  • Wes - 2011-08-12 13:59

    The opposite will be true. There will be no competition in the medical industry leading to doctors inflating cost. The tax payers (i.e Me) will have to fork out to subsidize people who make children but don't work.

  • MetalCut - 2011-08-12 14:18

    Go shove your rubish NHI!! We are not paying for 40 million low income citizens to enjoy it for free. Oh and I think by 2025 this country will be worse off than Zimbabwe!

  • flatline_now - 2011-08-12 14:20

    I am sure they will just go elsewhere and destroy the private health care

  • DeonL - 2011-08-12 14:21

    These figures of Specialists and Private hospitals increases over 10 years should be compaired to the Inflation rates, which probably increased the same? Most people should get paid double after 10 years, unless it is in a prolonged recession / downturn.

  • Jonathan - 2011-08-12 14:27

    I can actually smell the BULLSH!T!

  • Viv - 2011-08-12 14:27

    You say that now Minister Aaron Motsoaledi but as we have all come to learn that you ANC fat cats make all these wonderful promises and when it comes time to deliver there is f-all and we just have to pay. And to add salt to the wound it is the hard working who will be paying for those majority who sit on their asses and do sweet stuff all. I dont care how much you earn - if you earn a wage you should pay towards NHI. Just because you are a cleaner doesnt exempt you from paying too. Or is it only going to be taxes for the so called 'wealthy whites'. But yet again promises are made by the thieving ANC and the workers just have to cough up more taxes for those new Merc's, R16 mill houses and designer clothes the ANC have become accustomed to. I can't wait to see the strikes when NHI is introduced.

  • Sky - 2011-08-12 14:28

    The Welfare State of South Africa.

  • Mark Fysh - 2011-08-12 14:34

    Really? So the Minister says we will all be paying less for medical costs. Well lets see... About R2000 for NHI + about R3000 for reduced medical aid.... You are talking rubbish Mr. Motsoaledi.

  • Gandalf - 2011-08-12 14:35

    And News24 will you please get your act together and start SHOWING the comments immediately instead of loading them half an hour later. Bloody irritating.

  • Njamme - 2011-08-12 14:40

    If the green paper says that then we need not to pay for medscheme etc. And we all go for the HNI cause it will cover our medical expenses because we cannot afford 2 medical aids at a time and the toll gates.

  • Tc - 2011-08-12 14:41

    Anybody that believes cost will come down probably also believe that the damn ANC are a good bunch of honest people and that there is really a Father Christmas1

  • GerryC - 2011-08-12 14:44

    Basically you want the current middle class to finance the medical costs of the poor because the government continues to plunder the coffers of the state for their own personal back pockets, surely you have to realise that the middle class of SA is slowly but surely crumbling and once we have fallen we will not be able to fund what you you are supposed to fund by collecting tax.

  • Nico - 2011-08-12 14:44

    So, another tax and more money taken from mr.average. One day is one day then everything will backfire. The people will revolt against all these "taxes". Why should this be compulsary??????? Obviously so they can have enough money in the kitty.......... paying for the 45 million non tax paying people.

  • schmerz - 2011-08-12 14:44

    Incompetence? "Over the past decade, private hospital costs have increased by 121% while over the same period, specialist costs have increased by 120%" What about the prices of everything else like food and water? When are you going to start billing us for breathing air? Or should we bill you since you are just wasting it all? Why not concentrate on improving the country and creating opportunity instead of dragging the already functional PRIVATE infrastructure down a hole? Why? Because you are inept and fail at taking care of even yourself, let alone the masses of poor who look up to you - so you take and take and take and take that which does not belong to you. What do you use our taxes for, EH??? EH!!!??!?!?! If you dig too deep you will lose your fingers, not because they have been worn out, but because they will be ripped from their sockets. Continue doing what you are doing and you will have trouble.

  • Antoinette - 2011-08-12 15:04

    Why give us a card? If EVERYBODY has to pay, then that is stupid. Just ask for our IDs.....all South African's and legal residence would have one.....

      keng - 2011-08-12 17:48

      Because they can charge for the cards. If you earn x you pay. If you earn less than x it's free. Maybe I'm wrong, and that all one has to do to get a free card is flash your ANC membership card.

  • Appietrader - 2011-08-12 15:06

    What is the minister going to do with the many LAZY,unprofessional and uncaring staff in state hospitals? These people are not trainable. Would not want to pay for the present useless services and attitude of the staff.

      em_oh! - 2011-08-12 21:04

      Never mind lazy and uncaring staff in state hospitals....that also applies to private hospitals. My husband passed away last year in a private hospital and the "care" he got was nothing short of disgusting. Whether you pay or not doesn't seem to make a difference.

  • Slingervel - 2011-08-12 15:08

    This scheme is still-born! It will never get off the ground. This government can't organise and manage a piss-up in a brewery - nevermind managing a scheme of this magnitude. Another plan and another failure!

  • CHIPPER_CHAP - 2011-08-12 15:11

    at least those paying more are still alive. And those going to government hospitals are more likely to die when going to the hospital.

  • Andre Viljoen - 2011-08-12 15:11

    Bottom line: 50 million South Africans and 7 million taxpayers. Must be nice to get free medical aid...

  • King Solomon - 2011-08-12 15:18

    He needs to have his head examined on NHI.

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