The private healthcare industry is right to be nervous that potential fraud will give NHI proponents proper ammunition, writes Helena Wasserman in News24.
Even if the claims against Mediclinic aren’t true, let’s face it: The business model for SA private healthcare is stressed.
The number of medical scheme members is barely growing. This means medical schemes must squeeze more money out of members, while hospitals and doctors – faced with the same pressures plus high medical inflation – must squeeze more money out of schemes.
This means schemes must hike their membership fees, meaning fewer South Africans can afford medical schemes, and so the vicious cycle continues.
Also increasingly unsustainable is that only 16% of South Africans use private healthcare, which gets more than half of the country’s healthcare expenditure and is served by 80% of the country’s doctors.
The state wants to solve this with the NHI.
Instead of medical scheme contributions, you’ll pay a payroll tax and extra income tax. This will be pooled with the health budget of the state, which will then use the money to pay for all South Africans’ doctor and hospital visits, treatments and medicines.
Theoretically, this will come with large savings, as the state pays less for medicine than the private sector.
You will probably be allocated a specific GP, but won’t be able to see a specialist without a referral. People who currently rely on state healthcare will also have access to private services, which should provide private hospitals and doctors with a much larger patient base and income stream.
The problem, of course, is that government will be in charge.
Let’s start with the sheer terror of giving state officials access to the pool of half a trillion rands in an NHI fund. Then, the obvious point: government can’t even run its own healthcare system. Many public hospitals are falling apart due to mismanagement and endemic corruption.
Lack of trust
The NHI will only work if there’s trust that the state will get it right. If not, private doctors and nurses – who will have to depend on the state for their livelihoods – will emigrate. Also, if the citizenry doesn’t buy in, they will absolutely find ways to dodge the new taxes.
Stating the obvious: there is no trust in government. But South Africans are losing trust in the private healthcare system too.
This is evident from the mass outrage triggered by Mediclinic allegations. From the reader emails we’ve received, the comments on this platform and across social media, it’s clear that many have first-hand experience of suspect healthcare billing across the industry.
More than that, people are angry. The claims confirm their suspicion that they are being milked, not only by private hospitals, but also by their medical schemes.
Many are fed up with having to pay hundreds of rands in medicine and doctors’ bills each month, because their savings accounts ran out months ago. Meanwhile, they still pay massive monthly fees to medical schemes, whose parent companies are using the money to build banks, or sponsor smoothies, or whatever.
So, the health industry is right to be nervous that the potential Mediclinic fraud will give NHI proponents proper ammunition.
But government can’t be allowed to win the battle, at least not with the NHI legislation in its current form.
It was recently tabled in Parliament, basically unchanged from the same nonsensical, probably unconstitutional form first pitched in 2019. There is no indication that the government has engaged seriously with public concerns.
The legislation is still intent on centralising all power in the state. The same state that has basically destroyed our energy, rail and ports, and water infrastructure. No prizes for guessing why the only other network industry – telecommunication – is still functional.
The obvious lesson is that the expertise and efficiencies of the private sector must be harnessed from the start in any new system, beginning by contracting medical schemes to administer the NHI fund.
Will the state incorporate the feedback from current public hearings to shape a more sensible NHI, and perhaps even let the private sector help sort out state healthcare? I wouldn’t wager on it.
Instead, I’ll take some bets that the legislation will remain largely unchanged and continue to be challenged in court for years on end.
Meanwhile, state healthcare will deteriorate and kill more South Africans, while medical schemes will become even more unaffordable for most South Africans.
To get to proper, sustainable universal healthcare, sacrifices must be made.
Government will have to get over its statism. The private sector may have to moderate its profit motive. And those used to the comforts of private healthcare and easy access to specialists may also have to temper their expectations.
Rose petals
After months of excellent care from a gynaecologist, my firstborn came into the world in the luxury of your standard South African private-sector “Caesar’s Palace”. (Compared with the global average of 20%, in some Cape Town private hospitals the C-section rate is 90% – probably totally unrelated to their much juicier profit margins.)
At one stage, I found literal rose petals strewn on my hospital bed. I then had two kids through the NHS in the north of England, an experience that was near medieval.
Never mind a gynae, I never saw the same midwife twice throughout both pregnancies. One of the babies was delivered by an administrator because of staff shortages.
Still, what a singular joy to walk out of a hospital without having to pay a cent. In contrast, after contributing large amounts to his medical scheme all his life, an elderly relative recently still ended up with a R50 000 bill after an operation.
Something is terribly wrong when even for those who pay for medical cover, falling sick can be a near-destructive financial event.
Something needs to give. But the NHI in its current state-controlled form is not a solution.
It took many years and much catastrophe at Eskom and Transnet before government is now finally being forced to turn to the private sector for help. For South African healthcare to work (and to avoid the current struggles of the NHS), our private-sector strengths must be leveraged from the start – but perhaps minus those rose petals and free smoothies.
Helena Wasserman is editor of News24 Business.
News24 article – Helena Wasserman | Mediclinic and the three-letter word (Restricted access)
See more from MedicalBrief archives:
Harness private sector help for best possible NHI – HFA CEO
Other options than NHI for quality UHC
Dose of reality splatters NHI fantasy