Curing our sick health system

by Aug 16, 2009All Articles

Sunday Tribune
June 14, 2009 Edition 1
Kerry Cullinan and Anso Thom

Comment from Patrick Bond : Kerry and Anso, ordinarily such good sources, are wrong – here * – and are also repetitive and reliant on reactionaries.

An ANC task team headed by the former director-general of Health, Dr Olive Shisana, and dominated by trade unionists,* is trying to convince the ANC and government to hastily implement a national health insurance (NHI) plan

But many* believe it will spell disaster for the buckling public health system.

Inequities in the health system, which have resulted in the private sector monopolising resources disproportionately, need to be addressed. However, this must be done in a manner that does not destroy the functioning private sector, placing more strain on public health and causing more skilled health professionals to leave the country.

The NHI was a key ANC election promise and while President Jacob Zuma has promised the phased implementation of the scheme within five years, his unionist allies seem to want to speed up the process with little room for public debate.*

Insiders have confirmed that the task team is led* by ANC policy head and former unionist Teboho Phadu, and advised by KwaZulu-Natal geographer* Patrick Bond. Their ultimate goal is to nationalise the health service, get rid of medical aid schemes and force all citizens into public health.*

A confidential NHI draft* distributed in February proposes universal coverage that is free at the point of service and covers all “medically necessary” interventions.

It states that the NHI should be a state-administered, single-health* insurance system, and that funding for it should come from general taxes and compulsory contributions by all employers and employees.

Those with medical aid schemes would be expected to give 85 percent of their current contributions to the NHI. Tax rebates for medical aid contributions would fall away and the schemes would be prohibited from offering any services offered by the NHI, leaving them with essentially little more to offer than cosmetic surgery.*

Those employees without medical aid would be expected to give 3 to 5 percent of their earnings to the NHI, a proportion that was likely to increase over time.*

While pooling the country’s scarce health resources is essential to improve the health services of the majority, there is a fierce battle about how this should be done and funded.

While those on the left are arguing for the effective nationalisation of private health,* medical aid schemes are keen to remain part of the health system and administer parts of the NHI.

Board of Healthcare Funders member medical schemes this week pledged their support for the proposed NHI and “the commitment by government to provide comprehensive health care to all South Africans, especially in the light of reports that the NHI would be introduced in conjunction with all stakeholders, including medical schemes”.

Health economist and University of Cape Town’s Professor Di McIntyre believes that South Africa needs an NHI: “It is possible and affordable, but what we have to do first is invest heavily in public hospitals, the backbone of any NHI.

‘WE need to turn them from the current crisis into service providers that the public feel confident in and want to use. It could be a phenomenal service if we get the hospitals right.”

However, across the city at the University of the Western Cape, economist and dean of research Professor Renfrew Christie describes the NHI as “a rich country solution”.

“Sweden has a tiny population, superb civil servants and was totally healthy when they did it,” said Christie. “The UK was used to wartime draconian measures and had a superb civil service and buy-in across most classes in 1947 after the war, and was a richer country without pandemics.

“If you want to tax the rich more, do that, then spend it directly on health through the ordinary treasury budget honestly.

“This is the crux. If you want health, fix the health service you have,” said Christie, who questioned whether economists or actuarial scientists had run the numbers to show that the NHI was feasible.*

During the ANC’s 15-year reign, it has consistently underfunded health services and shifted resources away from hospitals at a time when the HIV/Aids epidemic has increased exponentially.

Real per person spending by government (after inflation) on public sector health services declined from 1996 and returned to 1996 levels only in 2005.

While the lack of financial resources is a key problem in the public health sector, throwing a lot more money at it will not restore the balance of power away from overpaid bureaucrats to underpaid service providers; ensure improved services offered by overburdened health professional or encourage health professionals to work in rural areas.

Nor will it remove the red tape that cripples hospital managers’ ability to run their institutions, or curb massive theft of everything from linen to medicines.
The hospital revitalisation programme, for example, has ensured significantly improved facilities in some areas, yet many wards in “revitalised” hospitals such as Mthatha and George stand empty because staff cannot be found to work in those areas.

The NHI also makes no mention of the need to ration the bouquet of services it seeks from public health, opening the door for patients to seek medical attention for minor ailments, which would further burden the system.*

Health economist Alex van den Heever questions whether an insurance-based scheme is appropriate to promote equitable access to health care.

“Insurance-based approaches are not superior to conventional public sector planning and budgeting in achieving equitable outcomes. If government were to implement improvements to the public health budget, it could do so through increases in general taxes,” said Van den Heever.

“We need to keep building up the funds dedicated to the public sector and consider the establishment of a national emergency insurance fund that will see everyone in trauma and emergency situations treated at the nearest health facility irrespective of whether it is public or private.

“The public sector requires a considerable reassessment of its systems of funding and accountability,” said Van den Heever.

He added that there was “an irrational bias” against people having access to medical schemes, which are an essential component of the health system, and that “most of the money raised could be squandered on paying public sector staff at private sector earnings levels” rather than implementing much-needed general health system reforms.*

According to the draft report, the NHI will be run by an authority that exists parallel to the national and provincial health departments. However, the health minister, rather than an independent board appoints the CEO – who has vast powers.*

To ensure that further mistakes are not made with regard to health system reform, it is essential that further discussions on NHI occur in public, with proper consultation and technical review. As they stand, these proposals fall far short of the adequacy required for proper government consideration.

Dr Jonathan Broomberg, head of strategy and risk management at Discovery Health, said private sector stakeholders were not in general opposed to the objectives of NHI,* but had significant concerns regarding some aspects of the proposed mechanisms to achieve it.

“South Africa has a world-class private health-care system. We must guard against any proposals that will damage this system, and focus on how the private sector can assist in achieving the objective of improving health outcomes for all South Africans,” said Broomberg.

Australian health economist Professor Gavin Rooney, currently visiting South Africa, believes immediate nationalisation of private health* is impractical as “the public sector simply could not cope”.
“The solution? Build up the public sector and make it genuinely competitive with the private sector. But the private sector also needs to be reformed. It is grossly expensive for what it does,” says Rooney.

He calculates tax breaks for those paying medical aid amounted to more than R10 billion in 2005* – equal to 20 percent of the public health sector budget. These breaks should be removed so the money could go to public health, he says.

In addition, “the private sector’s processes and premium setting should be more transparent, to allow real competition. There are too many schemes and health-care delivery is inefficient”.

“The private sector will be reduced if schemes collapse, but the remainder will have less to fear from a reformed public sector. People who want to take out private cover will still be able to do so, but they will pay twice for their health care. That will almost certainly mean the private sector withering away, though not immediately,” believes Rooney.

While there are divergent views on the best way to address health inequities, there is consensus that more public discussion must take place before any system is implemented. – Health-e News Service

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