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NHI sparks mixed responses

Aug 14 2011 14:49

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DISCOVERY LIMITED [JSE:DSY]

Last traded 97.66
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Last Updated: 28/07/2014 at 11:55. Prices are delayed by 15 minutes. Source: McGregor BFA

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Cape Twon - South Africa's planned health policy overhaul through a multi-billion rand national insurance scheme has drawn mixed responses as the state attempts to tackle the ailing public hospitals.

The bold proposal, published Friday for public comment, aims to close the gap with expensive private care and provide universal health coverage at a cost of R255bn ($17bn) by 2025.

The 14-year National Health Insurance (NHI) vision is to improve shoddy public facilities used by 84% of South Africans, rope in accredited private providers and draw wealthier patients who are on medical schemes.

"We were worried initially... we didn't know what was coming," admitted Norman Mabasa, chairman of doctors body the South African Medical Association.

"We would have been concerned if we were told how it would be modelled, but we are happy if we are going to participate on how it is going to be modelled."

South Africa inherited 14 health systems from the apartheid era, and the merged system has limped along post-1994 to spark a parallel industry of private but pricey quality care, which the state argues is unfair and unsustainable.

The country's health spend accounts for 8.5% of GDP with state spending nearly matched by that of medical insurance schemes who cover just 17.6% of some 50 million people, with only one in 10 blacks as members.

Health economist Alex van den Heever of Wits University said South Africa had "appalling" health outcomes despite the amount it was spending and that the proposal lacked a specific blueprint for reform.

"What I can find is that there is a defensiveness about why we have a failing health system and then kind of a claim that we will, through extra money, turn this around," said Van den Heever.

"The problem with the public system goes way beyond money."

The government admits that beefing up services is key to the NHI's success, but Van den Heever was critical.

"I have seen nothing in those proposals that really address the fundamental core concerns that have become very evident in the public system," he told AFP.

"It's (the public system) largely designed to fail in that it essentially lacks a coherent governance and accountability framework and its actual institutional model is weak."

Huge price tag

The plan is costed at R125bn for next year, rising to R214bn in 2020, but the 59-page paper does not say how this will be bankrolled.

A possible mix of funding includes the fiscus, employers and individuals - with a mandatory contribution cited - but the exact details will only be known in the next six months ahead of a pilot phase in 10 areas next April.

The number of people likely to retain private schemes has not yet been quantified, said Cobus Venter, director of consultancy Econex.

"Therefore the assumption that only 6.2% of GDP will be spent on health is false as this only reflects the increased level of expenditure in the public sector, even incorporating some private providers."

Leading private scheme Discovery Health, which welcomed the "strongly positive and sound reform framework" as an "exciting and much needed opportunity" to improve healthcare, expects to retain members as the NHI is developed.

"Over time, we do envisage that a proportion of medical scheme members will opt to obtain their healthcare services from the NHI, and may choose different forms of medical scheme cover as a result," said Jonathan Broomberg, CEO.

The document was more coherent than earlier discussion papers and the state understood the extent of the problems, despite some oversimplifications, and accepted public services had to be shaped up as a prerequisite, said Venter.

"We look forward to the details that will emerge in the weeks, months and years to come and assume that the process will be a pragmatic one as this is possibly the most complex policy initiative that any country can embark on."

nhi  |  discovery health  |  healthcare
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