NHI ‘compromise’ option for South Africa
An alternative to the National Health Insurance (NHI) scheme presented by the Hospital Association of South Africa (HASA) has reportedly drawn support from President Cyril Ramaphosa’s allies.
However, the unwavering proponents of the NHI in government – including Health Minister Aaron Motsoaledi and the head of the NHI in the Department of Health, Nicholas Crisp – are not budging.
According to the City Press, these new revelations emerged this week as HASA brought the proposal forward and various stakeholders reacted.
HASA outlined the proposal on Monday (2 September), which broadly boils down to mandatory healthcare insurance for all formally employed workers in South Africa.
By making this mandatory, medical scheme coverage would eventually reach 27.5 million people, allowing the government to increase its spending on the remaining population without having to adjust the health budget.
The proposal was put forward by Netcare Chief Executive Officer Dr Richard Friedland, who said that there is widespread concern that the National Health Insurance Fund is unaffordable and will take too long to implement, necessitating the exploration of alternatives.
The compromise
Speaking at the HASA Conference in Sandton, he stated that private hospitals wish to work with the government to find solutions to our country’s healthcare problems.
He pointed to mandatory medical cover for the formally employed as a potential solution that has been well-researched over two decades and is a “workable solution that, if implemented, will be quick to roll out and in a very short time provide enhanced healthcare to all South Africans.”
Friedland pointed out that the African National Congress’ own 1994 Health Plan recommended mandatory cover for the formally employed, and the National Department of Health Social Health Insurance Working Group in 1997 recommended that mandatory cover for formal sector employees should be confined to those above the income tax threshold, due to affordability concerns.
What this all offers, explained Friedland, is a middle-ground or ‘compromise’ option.
If the government mandates those South Africans who are formally employed together with their families to be covered by some form of health insurance or medical aid, “this will enable public health sector resources to be dedicated to the informally employed, unemployed and indigent.”
“With a formally employed population of 11.5 million, together with the estimated number of dependants, based on a 2.4 beneficiary ratio, this could result in up to 27.5 million of our population that could potentially over time become covered, leaving the remaining 35.5 million (56% of the population) people dependent on public health resources,” Friedland said.
Government public health per capita spend, he said, could increase over time by 52% without any additional funding of the public sector budget.
“In simple terms, if one considered the entire population in South Africa, the government’s responsibility would reduce from the current 85% of the population covered by public health to 56%,” he said.
The latest per capita public expenditure based on a consolidated health budget of R271 billion works out to R5,054, when considering the population and excluding medical scheme users.
With formal employment coverage, that per capita public expenditure on public health users would increase 52% to R7,659, research shows.
Friedland also told the audience that getting the scheme off the ground could be done in three phases.
Phase 1 would involve including the formally employed and their dependents who are above the tax threshold. This would grow the medical scheme coverage from 9,2 to 15,4 million. The completion of Phase 1 would also expand public per capita spend by 12.9% at present day levels.
Phase 2 would include those formally employed and dependents who are below the tax threshold. This would push medical scheme coverage to 27.5 million and expand public per capita spend to 52%.
Phase 3, Friedland explained, will allow for the expansion of the economy through recovery and an increase in employment.
This will have further benefits to South Africa’s health care system with research showing that for every one million formal jobs created, the public health system would benefit with a reduction of approximately 2.4 million people it will no longer have to serve.
Additionally, this will add a 7% increase from Phase 2 on per capita public health spend, he said.
“The health system stands to benefit in more immediate and visceral ways. The reduced load on the public sector will result in a reduced burdens on doctors, nurses and other healthcare workers, will reduce overcrowding, shorten queues and free up funding to fix infrastructure, fund unfunded medical posts, and grow our medical skills training capacity – remember, we have a shortage of 27,000 nurses in South Africa, and this is expected to grow to 70,000 by 2030.
Not only is the idea not new, says Friedland, but similar approaches are adopted elsewhere.
In Africa 61% of countries have contributory mandatory programmes for civil servants and 50% of them programmes for sector employees.
NHI fans unconvinced
According to the City Press, this plan has received a positive response from some allies close to president Cyril Ramaphosa who view it as an acceptable compromise that could quell growing opposition to the NHI and possibly stop incoming costly litigation against the scheme.
However, those tasked with enforcing the NHI and making it a reality – including the destruction of medical aid schemes – are not keen.
Health Minister Motsoaledi has proven to be particularly unyielding, using several opportunities since his appointment under the seventh administration to double down on the NHI and its most controversial policies, as well as paint any critical or dissenting voices as “hooliganism”, anti-poor or “propaganda”.
The business sector has expressed its disappointment that none of the promised formal discussions around the NHI have yet taken place, while the minister has made it clear that any discussions he has will be wasted effort if they do not include reform for healthcare financing (e.g., medical aids).
While the minister has expressed a willingness to listen to anyone who has ideas or proposals for healthcare reform, he said he would not entertain discussions around “foundational” policies in the NHI, saying it would be “a waste of time”.
Foundational policies of the NHI include severely diminishing the role of private healthcare financing through medical aids, which will not be allowed to govern any services covered by the NHI.
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