Will government fast track national health insurance?

by Aug 10, 2009All Articles

fanews.co.za Recd 13 July 2009

Heather MacLoed

The implementation of National Health Insurance (NHI) is imminent, says Professor Heather McLeod of Integrated Healing. McLeod shared some of her insights on National Health Insurance Implementation at a breakfast function held in Johannesburg recently. The media attended her presentation as part of an Innovative Medicines South Africa (IMSA) project to make material on healthcare financing and reform more freely available and to move the NHI debate into the public domain.

The African National Congress (ANC) Task Team on National Health Insurance worked on an NHI plan between July 2008 and February 2009 and produced a 200-page report on 16 February this year. What does the ANC have in store? Although she’s seen the document, McLeod wasn’t letting anything out of the bag. She urged the media to lean on the ANC/government to move the report into the public domain to encourage further discussion. And McLeod went to great lengths to remind the audience the document presents the ruling party (and not government’s) view. Of course the ruling party and government are inseparable on most policy matters.

Conflicting views; but NHI is inevitable
How soon will NHI be implemented? “There are two or three very different views about what the timeline will be,” said McLeod. The ANC 2009 Election Manifesto mentions the “introduction of the National Health Insurance (NHI) system [to be] phased in over the next five years.” But ANC secretary general, Gwede Mantashe, has other ideas. Speaking on behalf of the ANC National Executive Committee he recently said “the national health insurance must be in place within the first year of [the current] term and continue to improve over the next five years.” The Department of Health (DoH) 2009-2011 Strategic Plan supports a staged implementation. They propose a white paper in 2009/2010, draft legislation by March 2010 and promulgation of a new Act by 2011. The actual structures for the implementation of NHI would then be created from March 2012. Whichever implementation is favoured, we could well see an NHI implementation years before the proposed National Social Security solution.

There are some major stumbling blocks. McLeod notes that the ANC Manifesto doesn’t mention medical schemes, an issue also flagged by ex-minister of Health, Barbara Hogan. She recently said that government still “needs to resolve the role of private funders [and] medical schemes.” Some excerpts from the minister’s address when announcing the aforementioned DoH Strategic Plan are promising: “The role of private funders and providers is also important.” But others will strike fear in the heart of the private sector: “The private health sector in South Africa holds a huge share of the country’s national health resources, human and financial.” Beware shareholders and medical schemes beneficiaries, the resources you benefit from belong to the country!

A broad system for health provision
NHI is inevitable, so we’re going to have to turn our attention to the structure of South Africa’s future healthcare landscape. McLeod discussed the existing South African healthcare environment in four key areas: Revenue Collection, Pooling, Purchasing and Provision. To date, broad consensus has been reached on the likely structure, bar the Pooling and Purchasing functions. The NHI would rely on “general taxation and social security contributions” for Revenue Collection, while Provision would comprise a mix of provincial health departments, public-private partnerships and private providers. But the Pooling and Purchasing areas remain problematic.

The ANC favours a “Single Pool Single Purchaser” model. In this model the NHI would be responsible for pooling of contributions with the provincial health departments and district health authorities handling the Purchasing function. An alternative structure, the “Single Pool Multiple Purchaser” model would also see the NHI responsible for pooling funds while the Purchasing would be handled by a combination of provincial health departments, Bargaining Council Funds, LIMS Funds and medical schemes. McLeod also presented a model titled “Discussion v12” which expands on the Multiple Purchaser alternative.

Coverage is a huge problem
South Africa is home to some 48.855m people (IMSA NHI Policy Brief 2: Health Insurance Coverage). Only 16% of this population is currently serviced by voluntary medical schemes. The difficulty in implementing NHI is that even if cover were extended to every person (and their insurable families) with some form of income, we’d only reach 51.1% of the population.
McLeod concludes “the more lives added under mandatory coverage, the lower the average price of healthcare for all.” We don’t dispute this fact; but the conclusion requires low unemployment and high average wages to succeed. If you multiply this “lower average price of healthcare” across every life in South Africa, you’re left with a bill that will cripple the existing taxpayer base. Although McLeod never covered the likely cost of NHI to individual taxpayers we’ve heard suggestions NHI could command up to 18% of gross salaries. And even then (in our view) the NHI implementation will lead to a serious reduction in the levels/standards of healthcare coverage currently enjoyed by the majority of medical schemes beneficiaries.

Editor’s thoughts:
National Health Insurance is a great idea provided the country can afford it. We believe government is better off upping the capacity and service delivery through the public healthcare sector before forcing an ambitious first-world health policy on its citizens. It took Germany 127 years to achieve universal coverage after legislating Social Health Insurance, while UK citizens are turning to private health solutions to compensate for deficiencies in their NHS. Do you think National Health Insurance is an appropriate healthcare solution for South Africa? Add your comments below, or send them to

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