With legal challenges set to hold up the implementation of the National Health Insurance for a long time, key stakeholders have come up with alternative plans and interim measures to address the huge gaps in healthcare, and ensure that the private sector remains viable, writes MedicalBrief.
Last week, the Health Funders Association (HFA), which has lodged legal proceedings against the NHI Act, presented an alternative to the scheme, drawing on a report commissioned from Genesis Analytics. This comes as the Western Cape provincial government is seeking a closer collaborative partnership with the private healthcare sector.
Healthcare experts have also called for an "active" reaction from the private sector during the NHI transition period, punting reforms to continue keeping the private funding sector viable (see NHI story in side bar). Writing in the South African Medical Journal, they warn that without active reform, there most likely being a continued downward slide for the sector, with further exacerbation of the challenges and threats to its viability.
"These include above-inflation contribution increases, loss of membership, movement of members to cheaper options, higher out-of-pocket spending and potential catastrophic spending, and increased reliance on the public sector. The major risk for the health system and the country is that the sector then becomes non-viable before NHI is put into place."
Meanwhile, in a BusinessLIVE report, the HFA argues that even if NHI achieves substantial savings and efficiencies, providing comprehensive healthcare for everyone at the level enjoyed by medical scheme members is impossible. SA has neither the money nor the healthcare professionals to achieve that goal.
According to Genesis Analytics’ most optimistic scenario, which sees NHI achieve efficiencies of at least 45.5% on current medical scheme expenditure, NHI would cost more than R900bn a year – R410bn more than SA’s current total healthcare expenditure.
Raising the extra money would require introducing a payroll tax of 25.5% on top of existing income tax, the consultancy found.
Alternatively, average personal income tax would need to rise from 21.3% to 47.5% of taxable income – with the highest income tax bracket increasing from 45% to 68.4% and the lowest increasing from 18% to 41.4%.
“It is not possible for the government to raise money at this scale,” HFA CEO Thoneshan Naidoo said in his founding affidavit in its legal challenge to have the Act set aside on the grounds that it is “irrational and unconstitutional”.
The HFA’s case focuses on the financial implications of the NHI Act, specifically challenging section 33, which prohibits medical schemes from offering cover for benefits provided by NHI when it is fully implemented.
Unfeasible financing
The Hospital Association of SA (HASA) and the SA Medical Association (SAMA) have also argued in their legal challenges that there is no feasible way to finance the NHI Act in the current fiscal environment.
Additionally, SA does not have enough doctors and nurses for NHI to ensure the comprehensive cover now provided by medical schemes is extended to the entire population, Genesis Analytics found, with Naidoo pointing out that twice as many GPs and triple the number of specialists would be needed.
Thus, medical scheme beneficiaries would experience a reduction in care as they would face delays, rationing and medicine shortages.
The ban on medical schemes is at odds with the approach taken by almost all other countries pursuing universal health coverage, including those held up as successful examples by health Minister Aaron Motsoaledi, he said.
They include Brazil, Indonesia, Mexico, China, Costa Rica, Ghana, Turkey and Thailand, none of which has pursued a single fund model.
Constitutional infringement
In addition to alternatives previously suggested by other stakeholders, the HFA proposed a model that combines NHI with a supplementary role for medical schemes. All taxpayers would be required to contribute to the NHI Fund, but individuals would be allowed to choose whether to belong to a medical scheme as well.
The model aligns with an earlier NHI policy position that was abandoned in the final White Paper on NHI in 2017.
Under the hybrid multi-fund model, which it calls NHI+, NHI and medical schemes will cover a common benefit package delivered by public and private providers, and all taxpayers will contribute to the NHI Fund – either directly or via mandatory contributions to medical schemes.
A key feature of NHI+ is a set of risk-equalisation and redistributive mechanisms that would level the playing field and see medical schemes subsidising the NHI Fund for the common benefit package.
Genesis found the NHI+ model would outperform the current approach, not only due to its redistributive mechanisms but also because it would free up more resources for uninsured South Africans by removing older and more intense users of health services from the NHI’s responsibility.
The HFA calculated that its model would cause an 8% increase in the resources available to the NHI Fund for the 46.7m people who live in households with a monthly income below R30 000.
“NHI+ demonstrates that section 33 is not required to effect redistribution in favour of (the) uninsured,” Genesis said.
Naidoo argued that it was a practical solution for SA, and a more affordable and lower-risk route to achieving universal health coverage through progressive reforms.
In another BusinessLIVE report, Western Cape Health MEC Mireille Wenger says a closer relationship between the provincial Health Department and the private sector can benefit everyone, and ways need to be sought in which the two can collaborate.
To this end, the department has established a think-tank to work with the private sector to improve care for state patients, with potential projects ranging from improving access to high-tech scans to providing chronic medicines at more convenient locations: it will draw on the experience the department gained from contracting with the private sector during the pandemic, Wenger added.
“We need both sectors, alongside academic experts, to find smarter, more efficient ways to deliver quality care,” she said.
It will include representatives from private hospitals, laboratories, pharmacy groups, medical schemes, academic institutions and the provincial health department.
Its work will run independently of the National Department of Health’s push for National Health Insurance (NHI), added the MEC.
“NHI as it is currently conceived – if it does proceed – will probably take a very long time… this big push is to make sure that more people can have access to good quality care (now),” she said.
BusinessLIVE article – Health Funders Association takes legal action against NHI Act
BusinessLIVE – Western Cape seeks closer ties with private healthcare sector
Business LIVE article – Hybrid model proposed for affordable NHI (Open access)
See more from MedicalBrief archives:
Harness private sector help for best possible NHI – HFA CEO
Other options than NHI for quality UHC
NHI Bill signing sets stage for protracted battle in courts