ANC explains National Health Insurance

by Aug 16, 2009All Articles

Ray Hartley
22 June 2009,
This explanation appeared on the ANC’s website:
In the State of the Nation address, President Jacob Zuma clearly stated that: “We will introduce a National Health Insurance Scheme (NHI) in a phased and incremental manner. In order to initiate the NHI, the urgent rehabilitation of public hospitals will be undertaken through Public-Private Partnerships”. This is all in line with the ANC 52nd National Conference 2007 Polokwane resolution that: “reaffirmed the implementation of the National Health Insurance System by further strengthening the public health care system and ensuring adequate provision of funding.” The voters have given the ruling party a clear mandate, and therefore to the current government to implement NHI. It must be said however that the debate in the media came ahead of the release of details.

In order to translate the policy statements on NHI into reality, as a transitional arrangement, a Task Team on NHI was established to prepare the necessary background materials that will form the basis of a plan for NHI to be handed to the Minister of Health. The chair of the Task Team led a team that comprised of individuals from inside and outside government with expertise from health economics, finance, tax collection, health planning, human rights, social security, labour issues, private hospital industry, medical aid and politics. These individuals came from Departments of Health, Social Development, Treasury, South African Revenue Service, science councils, universities, private hospitals, health care funders, private medical groups, labour movement-COSATU, SACP and ruling party, the ANC. The role of the committee is to make evidenced based proposals on both the design and the processes of implementing NHI in South Africa by the South African government.

What is NHI?
The idea of the NHI has been proposed to cure the ills of the health care system in the country. The public health system has suffered a degree of under funding which has resulted in deterioration in the conditions of the state facilities, decline in the quality of care and exodus of skilled personnel. This must be put into its proper context. The formerly ‘white only’ hospitals were always better resourced and had lower bed occupancy while the overcrowded formerly ‘blacks only’ institutions were familiar with floor beds and long queues. The integration of facilities brought the reality of the situation to the fore. The increasing burden of disease exacerbated by the HIV and AIDS pandemic together with Tuberculosis, poverty, high unemployment and apartheid backlog in service delivery has put extreme pressure on the public facilities and its hard working and ever-dedicated health care staff.
The private health system has become less affordable. For many years the country’s expenditure in private health systems was equal to or more than the expenditure in the public health system. Whereas the private health system catered for 20 percent of the population in the past fifteen years, that number has decreased to about 15 percent Most of the funds are managed through medical aid schemes which had been increasing the premiums to less affordable levels. This accounts for the increasing percentage of the public (85 percent) relying on the public health service for service. In 2007/08 the expenditure in private health service catering for about 7 million people cost about R56 billion and a similar amount was spent by the provincial Health Departments to collectively cater for 41 million South Africans.

Many doctors in private practice are only too familiar with the situation of members of medical aids who get disqualified from seeing private practitioners because they exhausted their annual medical scheme allocation mid-year. They get dumped into the public health system as they cannot afford the fees in private hospitals.

All the medical aid schemes have the risk rating policy i.e. they recruit the younger and healthier members who are employed and need less medical attention, only to dump them or charge them more when they get sicker with age and cannot afford premiums after life-long contribution to the schemes.

With poor and overcrowded conditions many public institutions cannot compete with the private hospitals, even though they could use the additional revenue from private patients. The costing in the private health sector is not conducted under conditions of transparency raising the question of what drives the spiralling costs.

For the economic status and the total expenditure in both public and private health sectors South Africa has unacceptable health outcomes. The morbidity and mortality rates especially on preventable diseases remain worse than countries that spend less on health. This points to the inadequate internal distribution of resources available in the country. This means that rigid separation of the public and private sectors is not desirable, especially since government also contributes in the financing both the public and private health sectors. The NHI has been proposed to create a mechanism to level the playing field and create equitable distribution of resources resulting in high quality of health services for all the people. Universal access to a basic package of services for both the rich and poor will be achieved by the NHI. With such a well developed private health sector South Africa needs to ensure a regulated coexistence of the two sectors to find a balance between the two extremities. This must include the increased funding for the public health sector and regulating the medical aids industry to pool the resources available for the whole country and create a common platform for improving health outcomes. Currently principles of the NHI have been accepted by the ruling party. This allows for more detailed work to be completed and consultative processes be embarked upon. Even before the details are publicly debated, it has been generally accepted that revitalisation of all hospitals, improvement of the remuneration packages of the health care workers and transformation and capacity building of management is a pre-requisite for the NHI. This means that there is need for tremendous investment into the public health services. Hence the President announced that this revitalisation of public health institutions requires a public private partnership.

About 10 years ago, it would have cost R28 billion to revamp all hospitals in the country to a condition of new facilities. The figure may be higher today, but the rescheduling of debt that the PPP arrangements allow, would be affordable even within current financial constraints. This means this is the time for laying of the foundation of NHI and creating environment for better quality health.

The NHI Task Team has a responsibility to design a plan for implementation of National Health Insurance in line with the ruling party’s Polokwane policy resolution in December 2007. The initiative focuses on both National Health Insurance as a funding model and delivery models that seek to eliminate the impoverishing out-of-pocket payments and co-payments, redistribute human and material resources in a highly inequitable system, improve the quality of health services, enhance access to essential services and ultimately improve health outcomes for the majority of the people. The proposed initiative is aimed at providing both technical and consultative support to the Task Team on National Health Insurance, as well as research advice, evidence, expert inputs to the design and implementation of NHI plan. Changes to the funding model for health care in South Africa require robust engagements with empirical evidence and key stakeholders if it is to become successful.

We are aware of the debates in the media which are obviously not based on facts because no details of such plan have been officially announced by government. The debates are not only ill-informed but are also highly speculative. We are also aware that the debates are coming from a few individuals from specific sectors of the private sector, who have vested interests in maintaining the status quo in which the majority of our people continue to struggle in accessing quality health care – a Constitutional and a basic Human Right. Accusing the Task Team of pursuing an ideological agenda robs the country of a balanced debate in search of a lasting solution which a strictly market oriented approach cannot solve. We need to acknowledge the role of each of the sectors but seek a solution to correct the shortcomings. For that we require a sober and evidence-based debate, not an alarmist and confrontational discourse that currently characterises the debate in media.

The work of the National Task Team on NHI will be formally released to the public through appropriate channels when it is complete. We appeal to the public to be patient and wait for the release of the formal NHI plan in the near future. The plan will include processes of consultations with all key stakeholders to ensure that the voices of the public, private sector, labour, civil society and others are heard and considered in the finalisation of the plan.

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