Private hospital group Mediclinic warned in its submission to Parliament’s Health portfolio committee that the proposed National Health Insurance (NHI) system may be unconstitutional, is inadequately funded, and will destroy private healthcare and medical aid cover, reports MedicalBrief.
South Africans risk receiving only the basics of medical attention or none at all, due to the limited role of medical schemes. They would be particularly vulnerable if they required expensive, lifesaving medical treatments, Mediclinic said.
Last week, Mediclinic Southern Africa CEO Koert Pretorius outlined Mediclinic’s concerns and proposals to the National Assembly's Health Committee.
Mediclinic submitted that while “quality health care for all South Africans is an imperative to which Mediclinic is fully committed”, in its current form, the NHI Bill would have a direct impact on access to healthcare services. It noted that by the NHI White Paper’s own admission, the NHI is a “substantial policy shift that will necessitate massive reorganisation of the current healthcare system”.
Constitutionality
“The risks posed by such a far-reaching upheaval are enormous,” said Mediclinic. The Bill was possibly unconstitutional on a number of grounds:
- Breach of the right of access to health care services.
- Lack of reasonable certainty on the nature and scope of the NHI scheme.
- Non-compliance with the standards governing public procurement.
Affordability
There were also legitimate concerns regarding the availability of the financial and human resources required to implement the NHI scheme effectively, Mediclinic said. It cited the 2017 Davis Tax Committee Report, which found that the proposed NHI, in its current format, is unlikely to be sustainable unless there is sustained economic growth.
It pointed out that South Africa’s doctor- and nurse-to-population ratios are low compared to peer countries, with specialist-to-population ratios currently at 10% of OECD average. Also, extreme deficits exist in the projected number of specialists by 2040 when accounting for disease burden.
“Everyoneʼs right of access to health care services would be threatened if the existing health care delivery system is uprooted and the NHI scheme envisaged in the Bill cannot be effectively implemented,” Mediclinic said. Because of the integral role played by private healthcare providers. “everything, from hospital beds, to equipment, staff and training facilities, is at risk if replaced by the NHI”.
Private hospital sector’s contribution
Of the total hospital beds in South Africa, 30% are in private facilities. There are 534 facilities with 40,514 licensed beds.
More than 50% of output from nurse training programmes in the country is from private institutions. Between 4,300 and 4,500 nursing students were enrolled in training programmes offered by private hospital groups during 2014 and 20151
The private sector also makes a significant contribution to the economy. Private hospital groups in 2016/2017 contributed R55.5 billion to the national economy (1.3% of GDP), employed 53,500 people directly and supported 248,504 jobs (1.57% of national employment). They also contributed R16.4 billion in tax (1.5% of total tax revenues).
Bill threat to the viability of private healthcare
Key components of the Bill “threaten the viability and role” of the private hospital sector, said Mediclinic. The proposed contracting and reimbursement frameworks do not accommodate private hospital participation.
The proposals provide “no reasonable certainty of a commercially viable level of reimbursement”. Further more, the exemption of the NHI Fund from the Competition Act exposes providers to risks of the Fund “using its dominant power” to force prices for health care services below the competitive level and concluding exclusive dealing agreements with particular providers.
Erosion of medical scheme cover
Medical schemes would be limited to complementary cover, significantly eroding the coverage that 9m South Africans belonging to schemes currently receive. Under the NHI, they risked receiving only the basics of medical attention or simply none at all if they required expensive medical treatments.
People who could previously afford medical aid and/or private treatment, would face the possibility of being rationed with lifesaving treatments, as they would be placed in a pool with every other South African
It cited as example a patient with chronic renal failure and receiving life-sustaining haemodialysis treatment, currently covered by a medical scheme.
If NHI were to be implemented, it is anticipated that it would cover this treatment in principle. However, as an expensive treatment, the NHI Fund may not be able to provide cover to all patients who need it.
Consequently the patient would not be able access haemodialysis due to rationing nor receive treatment under medical scheme cover due to the NHI Bill restrictions. The patient is “then placed on a long waiting list [and] accordingly, existing access to life-saving treatment has been removed.”
Lack of “reasonable certainty”
Mediclinic said the NHI Bill fails to provide reasonable certainty on:
• The nature and scope of healthcare services that will be available under the NHI scheme;
• The nature and scope of healthcare services which will be available outside the NHI scheme;
• How registered users of the NHI scheme may access healthcare services within or outside of the NHI scheme;
• The nature and scope of the role of private healthcare providers in the NHI scheme;
• The permissible scope of medical scheme cover.
Required changes to NHI Bill
Instead, Mediclinic said, the NHI Bill should:
• Provide for staggered implementation based on benefit costing, financial and human resource estimates, with measurable milestones to be reached before key aspects of the NHI scheme are implemented.
• Remove the limitations on medical scheme cover and ensure a comprehensive and sustainable role for private providers in the NHI scheme.
This requires provisions for the “sustainable existence” of medical schemes and private providers and cross-subsidisation of lower costs to the public sector. It means optimising the capacity of the medical schemes environment to cover as many individuals as possible, for example, with Low Cost Benefit Option (LCBO) framework to provide insurance for lower income households, a Prescribed Minimum Benefit (PMB) review, and a risk equalisation mechanism incentivising chemes to compete on value to members rather than attracting younger/healthier members.
Die Burger reports that Tshilidzi Munyai (ANC MP) asked the Mediclinic delegation whether the presentation was not aimed at protecting their interests. Pretorius denied this. Munyai and other MPs also asked how a Bill aimed at equal access to health services could be unconstitutional. Mediclinic’s legal team said it was not the objectives of the Bill that would be challenged, but the practical vehicles provided for in the Bill.
MedicalBrief reports that following Mediclinic’s presentation, the Health Portfolio Committee also heard submissions from Bonitas, Discovery Health, Polmed and MedScheme. All presenters had expressed their unanimous support for the Bill and its objective for delivering universal health coverage to all South Africans, with some reservations. According to the Committee minutes:
- Bonitas advocated for a more flexible role for private medical schemes under the NHI and raised a concern on whether it was constitutional to limit people's choice of healthcare service.
- Discovery highlighted the nuance and sophisticated skills and expertise that the private healthcare market has developed over the years, and also recommended a collaborative working relationship between both sectors.
- Polmed’s presentation primarily focused on the reasons why the South African Police Services is a unique occupation that should be exempted from the Health Insurance, just like members of the SA National Defence Force and members working at the State Security Agency.
- The presentation by MedScheme focused primarily on the alternative reimbursement model that it supported to help bring the cost of medical scheme premiums down. MedScheme, just as the previous presenters, emphasised the role that the private healthcare market could play in the rollout of Health Insurance. The entity appealed for the Committee to recognise its role.
This is a free-use MedicalBrief article produced under Creative Commons Licence. It may be republished, preferably with acknowledgement to MedicalBrief and a link to this original material.
Mediclinc’s submission on Parliamentary Monitoring Group site (Restricted access)
Portfolio Health Committee Minutes (Restricted access)
See more from MedicalBrief archives:
Health Funders Association position statement on National Health Insurance Bill
Treasury says NHI implementation so slow that no budget is needed anytime soon
IRR submission on NHI Bill: ‘Blatant elite enrichment’
SAMA's warnings on NHI Bill met with hostility