Professional services firm PwC has conducted a deep dive into how Covid-19 impacted South Africa’s healthcare industry and how the incoming National Healthcare Insurance (NHI) will change its landscape.
The objective of the NHI is to provide universal access to quality health care for all South Africans as enshrined in the constitution.
PwC said its healthcare consulting team assessed the state and future prospects of South Africa’s healthcare industry while it underwent this period of immense transformation. The group said it surveyed 31 C-suite leaders of South African healthcare public, private and donor organisations by conducting in-depth interviews and online digital surveys.
The assessment was aimed at understanding the biggest risks, threats and opportunities facing healthcare organisations, identifying the biggest industry innovations and disruptions expected in the next five years, and Covid-19’s impact.
Five key insights emerged from this survey:
- National Health Insurance (NHI) will revolutionise South Africa’s healthcare landscape and create opportunities for public-private collaboration and innovation.
- The Covid-19 pandemic has rapidly transformed the outlook of healthcare organisations in terms of their preparedness and resilience measures.
- The future of healthcare is brighter than ever with innovation and technical disruption progressing in leaps and bounds.
- The healthcare industry needs an increased focus on Environmental, Social, Governance (ESG) initiatives and measurements.
- Cybersecurity is critical for all organisations and is becoming an increased threat as data volumes increase.
Will NHI improve health outcomes?
The National Health Insurance (NHI) is a healthcare financing system designed to pool funds to provide universal access to quality, affordable healthcare services for all South Africans and long-term residents.
More than half of the respondents thought that the NHI would likely not improve South Africa’s health outcomes in its early phases. Similarly, half felt that it will achieve or partially achieve its objectives, PwC said.
However, public trust in the healthcare system and the NHI governance has to be achieved first and considerable change management across the public and private sectors will be required.
Respondents also felt that unless stakeholder relationships are managed carefully and well before the rollout, there may be hesitation from all stakeholders due to a lack of transparency and communication.
“The right mix of skills and people will also be critical to the success of the NHI, including healthcare workers and personnel at all levels. Collaboration and dialogue with healthcare workers are critical to preventing the loss of key talent from South Africa, as healthcare workers and their buy-in into the NHI will form the backbone of the healthcare delivery,” said PwC.
The South African Medical Association (SAMA) said in June that the government is setting up the country’s healthcare sector to fail by not hiring or training enough doctors or nurses and other healthcare professionals.
Health minister Joe Phaahla that the country currently has a doctor-to-patient ratio of only 1 doctor per 3,198 people, describing it as a ‘shocking state of affairs’.
Responding to this, SAMA chairperson Dr Mvuyisi Mzukwa said that the figure lays bare South Africa’s healthcare problem – where the sector is understaffed, overworked, and money meant for equipment or patient care is funnelled elsewhere.
Question: To what extent do you believe NHI will improve health outcomes across the public and private sectors?
Is South Africa ready for NHI?
All survey participants support the model and intent of NHI, with half the respondents believing NHI will guarantee or partially guarantee equal access to healthcare.
However, concerns expressed about NHI included the need for clarity around the coverage and range of benefits, governance structures, the risk of corruption, healthcare workers’ capacity, and the impact of these factors on the ability of the NHI to deliver universal healthcare.
Shirley Machaba, PwC South Africa chief executive officer, said: “In a time when the global pandemic has highlighted the need for equitable, quality healthcare for all South Africans, it is imperative that we join hands to collaborate on building a healthcare system that benefits society as a whole.”
Question: Which three of these risks and threats are currently impacting your business most?
The role of medical aids
Healthcare stakeholders raised concerns around the future of private healthcare and medical aids in South Africa under the proposed NHI scheme in a report published in June.
The report, published by Section 27 and the Concentric Alliance considered the opinions of 33 major stakeholders in the health sector. It found that the health system reform efforts in South Africa appear to have stagnated.
“Following over a decade of discussion and debate, stakeholders are weary and do not trust each other’s motives and opinions.
“The private health sector contributes significantly to the South African economy, is a large employer and many respondents in both the public and the private sector believe it could be an important role player in health reform, having significant excess capacity and resources available,” the report found.
It found that the major disagreement is around Section 33 of the NHI Bill, which states that medical schemes may only provide cover that “constitutes complementary or top-up cover and that does not overlap with the personal health care service benefits purchased by the National Health Insurance Fund on behalf of users”.
Gap or top-up cover is designed to cover the difference between what your medical specialist charges for in-hospital treatment and your medical aid tariff.
The report said that this ultimately meant that “private medical schemes that are not gap cover, will cease to operate, with members covered by those schemes being required to use the NHI.”
Covid-19 accelerated change in healthcare
Covid-19 presented both opportunities and challenges to the healthcare industry, said PwC, noting that 50% of survey respondents said the pandemic accelerated their organisation’s journey to reach its goals.
21% of respondents said there were no setbacks for the organisation due to the pandemic.
Etienne Dreyer, PwC South Africa Healthcare consulting leader, said: “The sense of urgency in our collective response to Covid-19 rallied stakeholders around a common purpose.
“As a result, healthcare organisations are largely witnessing an accelerated digital transformation, not just in data and analytics, but across the entire healthcare ecosystem allowing them to progress towards their long intended goals.”
The survey’s respondents believe that the greatest level of disruption in the healthcare industry will come from reimbursements, followed by population demographics and research and development (R&D).
NHI will bring about fundamental changes in the healthcare reimbursement landscape, they said.
However, other factors like South Africa’s ageing population, obesity and the rise of non-communicable diseases are also adding pressure.
Shirley Machaba, PwC South Africa CEO, said: “The healthcare industry has always embraced the social pillar of ESG efforts due to their focus on developing medicines, vaccines and devices.
“However, our research shows that many healthcare leaders are demonstrating a higher focus on social aspects such as improving access to medicine, particularly cost-effective medicines and investments in generics.”
No going back
The Covid-19 pandemic has transformed the healthcare landscape, which means that going back to the same old way of doing business is no longer an option, PwC said.
“Healthcare organisations have the opportunity to build on the lessons they learned in 2020 and 2021 by establishing a stronger footing on the balance between in-person and virtual care, embracing digital technologies and analytics to improve operations, investing in local manufacturing, building resilient supply chains, and increasing their focus on ESG – all while protecting themselves from threats such as cyberattacks,” said Dreyer .