While South Africans face the prospect of little or no private healthcare in the future under the National Health Insurance (NHI), in the UK, Britons are being forced to invest heavily in private healthcare as the public service lurches from crisis to crisis.
Last week Parks Tau, Deputy Minister of Co-operative Governance & Traditional Affairs, said private healthcare users – who essentially are subsidised by the state through their medical aid tax credits – should stop resisting the impending NHI.
Tau made the comments while representing the ANC at a national election debate hosted by the Mail & Guardian and the University of Fort Hare in a week in which Health Minister Joe Phaahla confirmed medical aid tax credits would be revoked to fund the NHI.
Clause 49 of the Bill envisions “tax amendments” to be gazetted by the Finance Minister to finance the insurance scheme’s single fund, which the Treasury says will need about R200bn to run, reports Mail & Guardian.
“But what they (critics) are not saying is that even if you have private health insurance, you get a rebate on your taxes,” added Tau. “So the state subsidises your access to the private health system.”
Quality healthcare should not only be the preserve of those who could afford it, he said.
“We understand there will be resistance, because some would want to protect the little that is there…but we are about the majority of the people of this country.”
Broken and corrupt
Siviwe Gwarube, debating on behalf of the DA, agreed that the country had a two-tier healthcare system, and that “poor South Africans have been subjected to a broken healthcare system for decades”.
She cited the unlawful R10m “bicycle ambulances” championed by axed former Health Minister Zweli Mkhize during the Covid-19 pandemic – which the Special Investigation Unit set aside after an inquiry found widespread corruption – as evidence of the ANC’s mismanagement.
“And now you want to open up another SOE and expect us to trust the wolves in sheepskin? We’re not going to do that,” she said, adding that “it cannot be that people continue to be seen in mud houses (for health facilities)”.
EFF deputy president Floyd Shivambu said South Africa should emulate Cuba’s preventative healthcare system to create universal access, to “contain diseases before (patients) reach tertiary healthcare facilities”.
“South Africa doesn’t have a healthcare system, it has a hospitalisation system where you wait for people to get sick so that you take them to hospitals,” he said.
IFP deputy president Mzamo Buthelezi argued that the country still needed to keep state intervention away from the private sector, saying: “You cannot deny any South African his or her right to choose where (they) want to be cured.
“If you shut down the private sector, where will people go to be cured?”
Action SA Eastern Cape premier candidate Athol Trollip, a former Nelson Mandela Bay municipality mayor, said his party had Dr Kgosi Letlape, an ophthalmologist and former chair of the South African Medical Association, as its health expert, who would forge a “partnership between the private and public health systems; get them to work together”.
“Because at one stage in the history of this country, both of those systems were acclaimed – they had some of the best doctors in the world,” Trollip said, adding that public representatives and MPs should be forced to use state health facilities so that they would be improved.
Lessons from the UK
In Britain, meanwhile, the private health insurance market has grown by a massive £385m in just one year as the NHS crisis prompted more people to seek out private medical treatment and demand for dental insurance increased, according to a report.
The total health cover market, including medical and dental insurance and cash plans, grew 6.1% to £6.7bn in 2022, the latest year for which figures are available, according to the health data provider LaingBuisson.
About 4.2m people were subscribed to medical cover schemes. Including dependants on the policies, 7.3m people were covered – the highest number since 2008, reports The Guardian.
Since the market’s Covid-driven drop in 2020, when it declined by 2.2%, it has grown considerably faster than historical norms. Average annual growth was 6.1% between 2020 and 2022, compared with 1.7% between 2008 and 2019.
The NHS waiting list in England continued to lengthen, to a peak of nearly 7.8m last September. In February, it was still 7.5m and half of the patients had been waiting for 18 weeks or longer.
Private medical insurance, the largest part of the health cover market, grew by 6% year on year in 2022 to £5.3bn, more than triple the average annual growth rate of 1.8% between 2008 and 2019.
After a decade of decline until 2018, more people signed up, particularly in the aftermath of the Covid-19 pandemic which led to a backlog of major procedures such as hip and knee replacements.
Tim Read, author of the report, said: “Demand began to increase in 2018, as the NHS waiting list began to rise out of control. A new Labour government is likely to aim to tackle it but will have limited fiscal headroom to make substantial progress.
“With people still struggling to access NHS services and the waiting list remaining stubbornly high, there is little likelihood that demand for health insurance is going to fall any time soon.”
Growing numbers of people are also paying out of their own pockets for medical treatment, despite the high cost of some procedures, like knee operations, which typically cost between £12 000 and £15 000.
Dental insurance and capitation plans (fixed monthly payments) have shown the highest growth of the market, up 9.7% year on year in 2022. However, most people who see a dentist privately pay for treatment without any cover.
The emergence of “dental deserts” – swathes of the UK where NHS dentists are not taking on new patients – means hundreds of thousands of people have turned up in hospitals or at GPs with severe tooth decay.
The average health insurance premium went up to £1 225 in 2022 from £1 203 in 2021, while premiums on work policies went up to £975, and individual premiums rose to £2 252.
Insurers have flagged premium rises of more than 10%, with one placing them as high as 40% this year and possibly beyond. This reflects a rise in claims and higher medical costs. Some people who could not get what would have been a cheaper treatment option during the pandemic are now suffering from more expensive conditions to treat, Read said.
The UK health insurance market is dominated by Bupa, France’s Axa Health, Aviva and Vitality Health, owned by South Africa’s Discovery.
Read said: “I don’t think the NHS is going to fall apart overnight or that the private sector will run rampant overnight. But I do think people as customers, rather than people as taxpayers, are beginning to reconceptualise the value of paying additionally for healthcare entitlements, which technically they should get on the NHS.”
The Guardian article – Private health insurance market grows by £385m in a year amid NHS crisis
See more from MedicalBrief archives:
Income tax hike and payroll tax proposed for NHI funding
HFA opposes proposed medical scheme tax credits’ removal
Crisp: Payroll tax, surcharges on personal income tax to fund NHI