The Green Paper for National Health Insurance: universal healthcare threatened | by Alex Muller

by Feb 14, 2012Magazine

The release of the Green Paper on National Health Insurance (NHI) has rekindled the heated debate around reforming South Africa’s health system. After a decade of denialism and neglect in the public health sector, it is evident that health is in a state of crisis and that urgent change is necessary.

The critical state of healthcare is not accidental, nor just the result of a massive burden of disease. Policy decisions taken by government over the last 15 years, including the introduction of GEAR, fiscal discipline, privatisation, retrenchment of health workers and deliberate strengthening of the private sector, have contributed to bringing us to where we are today. South Africa spends 8.3% of its GDP on healthcare. Half of that is spent on the 16% of the population covered by the private sector, with a per capita expenditure of R11 150. For the other 84% of the population that are served by the public sector, the per capita spending is R2 766. The vast majority of South Africans that rely on the public sector are served by less than 30% of the medical practitioners working in the country. This is a direct consequence of neoliberal policy decisions, which have resulted in the continuous undermining of the public sector and subsidisation of the private sector. All South Africa’s doctors, nurses, specialists, physiotherapists, pharmacists and other health workers are trained in the public sector – yet the majority work in the private sector. Medical aid contributions are tax deductible, which effectively subsidises private medical schemes and results in a massive loss of public tax revenue. The private sector frequently treats patients until the medical aid funds are exhausted and then relegates them to public hospitals for further care. This is highlighted by the ground-breaking case of Mr Soobramoney vs Minister of Health, wherein the Constitutional Court denied Mr Soobramoney access to dialysis services in the public sector following the exhaustion of his private medical aid benefits. The Green Paper on NHI correctly outlines many of these problems and takes into account the current burden of disease in South Africa. It outlines a philosophical approach to ensuring universal access with a focus on primary health care. It is founded on the right to access to healthcare, social solidarity, equity and affordability. Its strengths are its emphasis on primary health care; the inclusion of practical strategies to implement this following the ‘Re-engineering Primary Health Care’ approach; and the recognition of the social determinants of health, which shape all health inequalities. However, we need to look beyond these approaches and ask whether the proposed NHI will truly reverse the processes that have led to the current health crisis. If we assume that this crisis can only be overcome by a single national health service which is free at the point of service and funded collectively, the Green Paper in its current form is only a vague statement of intent from the Department of Health. Its lack of clarity on the crucial issues of financing and implementation reflect the conflicting vested interests within the health sector – between the financial interests of the private sector and the need to deliver health care for all. This conflict is also evident within government itself, notably between the Department of Health and Treasury. The Green Paper provides the opportunity to build a health system that allows universal quality healthcare for all South Africans – but this opportunity threatens to be undermined by the powerful interests of the private sector.

There is controversy regarding the cost of NHI amongst economists with different class interests pushing different figures. Real costs are difficult to estimate, and certain doomsayers, predicting the collapse of the South African economy, have vested interests in making NHI look totally infeasible. The Green Paper estimates that NHI will cost R255 billion by 2025. The 2011/12 budget for health was R125 billion. This appears to be a massive increase, but the real annual increase in health expenditure at current trends would have reached approximately R180 billion by 2025. If government implements the WHO recommendation of increasing health expenditure from 12 to 15% of the national budget, health expenditure would be over R200 billion in 2025. The 2010 total private and public sector expenditure on health was R227 billion. While there is clearly a need to generate additional resources, the gap is not as massive as portrayed in the media and, if appropriate strategies are adopted, a significant part of this will come from a shift of resources from the private to the public sector. A real change in the health system can only take place if this occurs.

Public facilities in South Africa charge user fees from patients with any form of income above R4 000 per month. This mainly affects lower income workers who cannot afford medical aids and use the public sector only to be faced with crippling hospital bills. Last year’s ANC discussion document on NHI clearly states that user fees need to be abolished to provide free services at the point of delivery. This confirms a large body of evidence that shows how user fees significantly impede access to healthcare. However, the Green Paper does not specifically mention the abolishing of user fees, nor does it give a timeline for when this would occur. Even more worrying is the mention of co-payments within NHI under certain circumstances. Co-payments are not payments for services outside of the NHI health package, such as purely cosmetic surgery or expensive spectacle frames, but are additional payments for services within the package of care, which are as yet unspecified. While there is a statement that co-payments are discouraged, a loophole is left for certain undetermined circumstances. Co-payments have been used extensively in other NHI systems in the world, where they have resulted in limiting access to care. They undermine the core principle of universal coverage and must therefore be opposed.

The Green Paper proposes that NHI will provide a ‘benefit package’ which will be specific to each level of care: district, regional and tertiary hospital level. The aim is to make this package comprehensive and rational. The details of the package are not specified, and it is difficult to comment on whether or not it will truly be comprehensive. The content of the benefits package will ultimately determine the form and quality of the health system. In order to provide universal quality care for all, the package needs to include not only curative services by medical professionals but also preventive and promotive health strategies by community and other health workers. It is important to note that in the Green Paper, the right to access to healthcare is limited to ‘South Africans, legal permanent residents, refugees and asylum seekers’ –  this leaves immigrants without papers no chance of accessing the health system.

NHI will pool vast sums of money into a single fund. These resources will be used to ‘purchase’ services from health providers both private and public. All facilities contracting with the NHI will have to be accredited by the Office of Health Standards Compliance. Facilities of sufficient quality will be mainly private hospitals or urban-based public hospitals. Hospitals and clinics in rural and poor urban communities will struggle to meet these standards and run the risk of not being accredited. This could mean that public funds earmarked for the health sector could end up benefiting only private facilities and already well-run public facilities. In the worst-case scenario, NHI could end up strengthening the private health industry. As the money in the NHI fund is public money, it is imperative that it is used to upgrade and build the public sector. Therefore public facilities (especially in rural and poor urban areas) need to be upgraded and accredited first. Another part of the NHI implementation plan is the building of six flagship academic hospitals. Many of the hospitals named already exist, so it must be assumed that a significant renovation and revitalisation of these facilities is envisaged. It is of concern that the Green Paper implies this will be done through private public partnerships (PPPs) without providing further details. The building of public hospitals should not be a source of profit for private companies and should remain wholly owned and managed by the public sector.

We need to identify the critical areas of struggle, critique the inconsistencies and identify dangerous areas within the Green Paper. Issues that have been identified above need to be closely monitored in the process leading up to the White Paper and the actual NHI Bill. Unless we implement a truly universal NHI with a strong public sector, the glaring health inequalities in South Africa will persist.

Dr Alex Muller is the coordinator of the People’s Health Movement South Africa (PHM-SA). This article is based on PHM-SA’s position paper, for which Dr Lydia Cairncross provided significant support and input.

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