‘Not even its supporters agree’ on what NHI means for private health

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SANHIEven supporters of the National Health Insurance disagree on what the shift will mean, especially for private medical schemes, writes Amy Green in a Health-e News report. Meanwhile, the SA  Department of Health has again lashed the media and other critics, saying that Health Minister Dr Aaron Motsoaledi had predicted ‘a war’ by those ‘ideologically opposed’ to the NHI.

Even among those who support the implementation of universal health coverage in the form of a National Health Insurance (NHI) there is disagreement on what the shift will mean especially for private medical schemes, writes Amy Green in a Health-e News report.

Green writes that according to the new NHI White Paper, the role of medical schemes in South Africa will change fundamentally with the implementation of a universal healthcare system. The first victims will be government schemes, including the Government Employee Medical Scheme (Gems), the Police Medical Scheme and the Parliamentary Medical Scheme (Parmed).

Green quotes Health Minister Aaron Motsoaledi as saying last Friday that he had gazetted legislation that day to set up teams to look into dismantling and reformulating these schemes to divert money to the future NHI Fund. “We needed to gazette that and then get public participation… for such committees. But as soon as they get appointed they will start doing that work,” he said.

Motsoaledi said that he had been campaigning for the dismantling of Parmed for years: “Because Parmed consists of members of parliament (MP) and judges and I told them they do not meet the definition of a medical aid scheme because a scheme depends on numbers. With 265 judges in the country and just over 1,000 MPs he said the scheme has never been “viable”. “I was paying a premium of R 4,000 in Parmed and around October, my benefits for chronic medication were finished. And they tell me if I want to be treated, I must be admitted to hospital. I mean that’s ridiculous. A patient in hospital is much more expensive,” he said.

Greene writes that he is also prioritising the removal of Gems’ lowest plan, Sapphire, which does not provide cover for private hospitals and only allows each member three visits to a doctor per year. “About 40,000 public servants are on this plan and they don’t pay a cent – not a single cent – everything is paid for by the state, and then they are also treated in state hospitals. It doesn’t make sense,” he said. Motsoalidi said these are two examples of inefficiencies within the current private health financing system and why it deserves to be overhauled and for these funds to be diverted to a single NHI Fund.

Green writes that according to the White Paper, future medical schemes would be relegated to providing only “complementary cover” for non-essential services not covered by the NHI. But acting MD of the Board of Healthcare Funders (BHF), Dr Clarence Mini, said that he believed that there should be more debate about the role of schemes in the future.

“Since 2008, we have supported the idea of the NHI and believe that it is in the interests of the greater good of everyone – and not just the 16% who belong to medical schemes,” he said. “But we think medical schemes have a bigger role to play and should not be side-lined. We think it is a mistake to use a single-funder system, for example.”

He said that having a “multi-player” system would mitigate a lot of risk and is one of the ways that the private sector can lend their expertise to the government regarding the setting up and management of pooled money within the NHI. “The Road Accident Fund is an example of what happens when you have one funder; when that funder goes down you’re in trouble,” he said.

But Greene quotes Motsoaledi as saying he would be meeting with the BHF to discuss these issues within the next week, maintaining that the purchasing power of a single funder is too strong an asset to ignore. He pointed to Britain’s National Health Service as an example of where the purchasing power of a single funder has brought down the costs of medicine and services significantly.

Neil Kirby, director and head of healthcare at Werksmans Attorneys, said that while the White Paper is good in the way it “derives its mandate from South Africa’s Constitution”, it is not clear enough in how it will be implemented. Green writes that he said a lot of what is outlined in the White Paper requires substantive changes to legislation: “That is not a straightforward process; it has to involve public comment and can be lengthy. The lack of detail in the White Paper belies the amount of work need to get all of this right.”

And Greene quotes Russell Rensburg, health systems and policy programme manager for the Rural Health Advocacy Project, as saying the White Paper left him wanting more information. “It’s often the people with the lowest income who have the highest health need. The way the current system is structured there are many who are too poor to access health services. The NHI White Paper does go some way to create a system that is easier to access,” he said.

“But from the rural perspective we want more information. At the moment, the population is very sparse but not close to facilities. Are there plans for planned patient transport?”

According to Greene, Motsoaledi said he will “strengthen” mobile clinic services to reach these populations under the NHI. On the private sector he said that under the NHI, “because it will be something that is brought about by the state whole nation, you then cannot as the state provide medical schemes”.

“What is not yet resolved is the medical schemes that are purely private,” Motsoaledi said, committing to continue to meet with all key role-players, including those in the private sector. “Whether it’s a single or multi-player system, you still use expertise from people who are experts. So we will meet with the experts.”

 

Defending SA’s National Health Insurance plan, Popo Maja, head of communication at the Department of Health writes in Business Day: “In the run-up to the launch of the White Paper, the Health Minister warned us in the department that we should ready ourselves for a war. He reminded us of the early 1990s after the release of Nelson Mandela, saying the process of ushering in democracy produced three categories of people.

“The first group were those who celebrated the change because they believed their aspirations for a non-racial democracy would finally be realised. The second category were those sitting on the fence. They had fears about their future, but were prepared to be convinced if the new political dispensation would accommodate them and produce a just system. The last group were the ultraconservatives, who were bent on retaining the status quo. This group thrived on white fears.”

Maja says that while the broader media has generally adopted an open attitude to NHI, engaging constructively on the matter, a small group appears to be ideologically opposed to universal health coverage.

He writes: “The department has avoided tackling those who oppose the plan on public platforms. We have always believed that debate on NHI will help to clarify the complex matter of rolling out coverage in our country. However, certain untruths cannot be left unchallenged.

“An article in Business Day (Backlog of mine worker claims weighs on fund, July 5) betrayed a lack of balance and a bias against the NHI plan. ‘The fact that the department is still struggling to get the CCOD (Compensation Commission for Occupational Diseases) to provide workers with an efficient compensation fund has broader implications, as it raises questions about its capacity to oversee the ambitious NHI Fund.’”

Maja writes: “That article was not tagged as an opinion piece, which would allow the writer to express her personal feelings. It appeared to be a news article, which is guided by a reporting code of sticking to the facts and not including subjective views. If the writer was not expressing her view, how does one explain the use of the word ‘ambitious’? Furthermore, when she said it raised questions about the department’s capacity to oversee the NHI, who was raising these questions? She was obviously declaring her bias against the NHI.

“If one tries to follow common logic, it is difficult to understand why the problems around the CCOD have any bearing on the effective implementation of NHI. In another article (Minister’s universal healthcare plan a wan fantasy lacking robust detail, July 3), the writer’s opposition to NHI is laid bare for all to see. In the article, the reporter writes: ‘The entire policy is ridden with proposals (that are) divorced from reality.’”

He says: “It is this statement that has no relation to reality. Describing the work of countless experts and health professionals as a fantasy is not just an unfortunate choice of words, but a deliberate plan to rubbish the NHI plan.

“The article concludes: ‘Perhaps the most worrying aspect of the white paper is that it contains no honest acknowledgement of the reasons for the long queues, dilapidated buildings and shoddy care that characterises so many public health facilities…. Bolting a new financing mechanism on top of a fundamentally rotten system is not going to deliver a better deal for patients.’”

Maja writes that this is deliberate misinformation. He says: “The minister has not only fully and publicly acknowledged the problems in health facilities, but we are implementing the NHI plan precisely to ensure that we deal with these.

“There is no denying that at the core of the crisis in our healthcare system is the unequal distribution of resources towards provision. We cannot allow apartheid planning in health to continue.

“We have to stop the allocation of 4.4% of the GDP to serving only 16% of the population, while only 4.1% of the GDP serves the rest of the population (84%). We are doing this because the current system is not sustainable. It is immoral, unjust and unconstitutional. We have articulated a vision that says we will provide quality healthcare to all South Africans regardless of their economic status. It is a pledge we shall honour despite vitriolic attacks by people who seek to retain the current situation, which favours the rich and condemns the poor to premature deaths.

“Yes, we may be accused of lacking detail, but what will be the value of public consultations if all the finer details have been adopted? We are committed to get buy-in from all stakeholders because the NHI is for all South Africans and not just a section of the population.”

 

A brief from Charles Simkins, head of research at the Helen Suzman Foundation assesses the extent to which government thinking has progressed on the health system and a second considers whether quantitative modelling can help us think about the system’s future.

The first brief concludes that South Africa has a government which brought the social grants system to the brink of collapse earlier this year. Simkins says that the distribution of social grants requires that recipients be checked for eligibility and that funds are transferred to them. But, he writes, the NHI is an order of magnitude more complicated. It involves the entire population, extensive reconstruction of the existing system, new forms of regulation and the administration of a mass of contracts.

He writes that Gelassenheit – the tranquil submission to circumstances – becomes a major temptation. He writes that like Pater’s Mona Lisa, our eyelids are a little weary.

But, he says first, the ability of modelling – long expected from the Treasury, but now a hope indefinitely deferred – to illuminate the issues must be considered.

 

In the second brief, Simkins writes: “It was pointed out that the policy on the NHI contained no definitive statement on the NHI package of services, much less their cost. That would seem to rule out modelling. Nonetheless, some useful insights may be gained by looking ten years into the future, which takes us to the end of Phase 3 of the introduction of NHI.”

He writes in conclusion that: “Given that the scope and cost of NHI are indefinitely deferred signifiers, it is not possible to make a projection of it. We can, however, model an alternative, which we prefer, of leaving medical aid schemes alone and devoting new revenue streams (a 1.5% payroll tax, a 1% surcharge of taxable personal income and the removal of tax breaks for medical aid) entirely to the public health sector. This would permit an increase in the level of service in this sector by just over 30% over ten years, a not insignificant improvement during a period of slow growth. It would permit improvements in the quality of existing services as well as permitting new services discussed in the policy. It would obviate major reorganisation of the health system, the prospect of which fills us with dread. And it probably represents the outer limit of the attainable.”

 

The gazetted White paper provides useful insights into governance during the transition period, notes Pam Saxby for Legalbrief Policy Watch. Saxby writes: “The work of a national advisory committee on consolidating existing financial arrangements is likely to have particular implications for medical schemes. This is noting that it has been tasked with: recommending transitional measures in preparation for creating a single funding ‘pool’; and managing the ‘cross-subsidisation’ processes entailed. This is expected to involve comprehensive consultations with all affected stakeholders.

“According to the document, the committee’s responsibilities will include: consolidating public sector healthcare arrangements into a single scheme, aligned with NHI principles; ‘reforming’ related government subsidies; standardising private sector employer healthcare arrangements by ‘replacing’/‘expanding’ prescribed minimum benefits; consolidating restricted and open and medical schemes; and introducing mandatory NHI cover and contributions for everyone in formal employment. While a ‘pricing advisory committee’ will make recommendations on ‘an appropriate service remuneration structure’ for healthcare benefits delivered by both public and private providers, the financial consolidation committee will be responsible for implementing these reforms ‘within the voluntary insurance sector’.

“Other national structures dedicated to NHI roll out will include: a tertiary health services committee; a governing body on training and development; a ministerial advisory committee on NHI benefits; a ministerial advisory committee on NHI health technology assessment; and a national health commission. The document spells out terms of reference, lines of reporting and operating procedures for each – also prescribing committee composition and representation. However, some of the timeframes and deadlines set may already have expired. The NHI benefits committee should have finalised its recommendations by April this year – when work was scheduled to begin on a single scheme for public servants. Also by April, the ‘essential features’ of mandatory NHI cover and contributions were supposed to have been ready for implementation.”

 

The ANC wants the current tax rebates to individuals on medical aids to be scrapped and the money used to fund the NHI. Fin24 reports that this was one of the key proposals of the ANC policy conference that ended last Wednesday at Nasrec, south of Johannesburg.

It is estimated that R22bn is paid back to tax payers every year, but Health Minister Aaron Motsoaledi wants that money to be redirected and used as money for the NHI. The proposal is also contained in the White Paper on NHI published earlier this month. The NHI would be compulsory and could be considered as a replacement for medical aids.

“This is not an additional tax, it is money we can claim back while we remain beneficiaries of medical aid schemes that our employers support us with,” explained ANC NEC chair of the committee on health and education Naledi Pando, in a report back on the resolutions taken during the recent ANC policy conference.

According to the report, Pandor said that the party wants to ensure that the legislative framework on the NHI will be finalised by 2019 when the current term comes to an end.
“We would not be able to define the kind of package anticipated for NHI, if we don’t look at available means of providing support to its implementation,” she said.

 

 

Motsoaledi said in an interview with Rapport, meanwhile, that fears about corruption and mismanagement of the proposed NHI fund dealing with hundreds of billions of rands a year “cannot be ignored”. However, he believes the governance structures in the White Paper will prevent this.

The White Paper proposes that the NHI must be governed by a board that reports to the minister and that the board must be accountable to Parliament. Motsoaledi says parliamentary oversight for controversial state-owned enterprises such as Eskom and SAA was an “afterthought”, but more stringent parliamentary controls will be built into legislation for the NHI. Treasury and SARS will also be made part of the checks and balances process, Motsoaledi added.

The report says the White Paper suggests the NHI should be the only buyer in the enormous health market. For the current financial year, the government is spending R187.5bn on the public healthcare system and private medical schemes spent almost as much on acquiring medical services and products in the private market.

When other expenditure is taken into account, up to R500bn could flow through the the NHI annually, a third of the current national budget, says the report.

Health-e News report
Helen Suzman Foundation brief 1
Helen Suzman Foundation brief 2
Full Legalbrief Policy Watch report
Full Fin24 report
Business Day report
Rapport report


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