Blade Nzimande: The Sunday Weekend Argus,
AS THE SACP we correctly predicted the private healthcare sector would leave no stone unturned to oppose the introduction of a national health insurance scheme (NHI) for the benefit of the overwhelming majority of the workers and the poor of our country.

The current system of funding healthcare in South Africa is a two-tier system that grossly discriminates against the working class and the poor.

In the words of Health Minister Aaron Motsoaledi on the recent debate in the State of the Nation address "one of the most glaring and obvious reasons why the public sector is not doing well, is what the people who have started engaging are trying their best to hide".

"This is the manner in which this 8.5 percent of the gross domestic product (allocated to health) is distributed among our population: Five percent (of health expenditure) goes to (only) 14 percent of the population; the remaining 3. 5percent goes to the 86 percent of the population, Motsoaledi said.

"To simplify it, in this beautiful country of ours seven million people (who benefit from private medical- aid cover) enjoy 5 percent of the GDP to take care of their health and a whopping 42 million (who are predominantly poor and unemployed citizens depend on a public health system for their healthcare needs) will have to do with the remaining 3.5 percent of the GDP", he said.

"A staggering R13 billion is provided by the National Treasury as a tax subsidy. No other health system in the world allows this. Gavin Mooney, a visiting Australian academic, states on the tax breaks in the private schemes, as seen through the eyes of a foreign health economist, these are not just of monstrous proportions, but it is monstrous."

Our private medical scheme industry is tax-subsidised. Money that individuals or private employers pay directly to medical aids would be classified as "private" - with one important caveat: that many of these "private" payments are subsidised by taxes.

The tax subsidy in the form of tax deductibles from medical-aid contributions accounts for between R5bn and R10bn, or more, annually. This subsidy contributes to inequalities in the system. The high income earners tend to benefit more since they are in high income tax brackets than lower and modest income workers.

The rising costs of contributions make it unaffordable for many people to continue their membership of private medical aids or to use private healthcare services, let alone the millions who cannot afford to subscribe to such schemes. Medical-aid schemes membership grew dramatically during the 1980s-90s, mainly as a result of the gains made by trade unions, but has declined since. Nor are these schemes prepared to extend their cover to larger numbers of low-income people, especially those suffering from ill health.

Even the capitalist US is seriously considering introducing some kind of national health insurance scheme. The draft proposals produced by congressional Democrats have included a public option. Early analysis of the Senate concept, which was drafted by the Senate health committee chaired by Senator Ted Kennedy, showed it would provide a choice of private or public health coverage, an employer mandate and a guarantee against insurance companies refusing coverage for pre-existing conditions.

This example is by no means an attempt to justify the introduction of the NHI on the basis of what the US does, but to refute the argument that such a scheme is something unusual.

There are three major companies that specialise in the administration of medical aid schemes. These are Discovery, Medscheme and Metropolitan.

By way of example, the administrative costs in the private health sector account for 23 percent of all healthcare expenditure in South Africa, in comparison to only 3 percent in Canada's publicly administered healthcare system. In other words, almost a quarter of the money paid to medical aid goes to administrators - the "middle men and women" - who provide no health service whatsoever.

Out of every R100 contributed to medical- aid schemes, only R3 goes to medical practitioners and a little more than R3 goes to the specialists.

The seeming efficiency of the private sector hospitals is questionable and cannot be ascertained as there is little or no transparency about their costs.

What we do know is that in 2006 the breakdown of healthcare costs in South Africa was:

• Total expenditure R116.9 bn.

• By the public sector R57.3 bn.

• By private medical-aid schemes R59.6 bn.

Translated into population figures the picture is grim:

• Total population 47 391 029.

• Population served by the public sector 40 263 686.

• Population served by the medical aids 7 127 343.

In 2006 only R2 645 was spent on each public sector patient, while money spent on each medical-aid patient was R9 349.

The same pattern obtains at primary healthcare level where only R387 was spent on each public sector patient as opposed to R725 per medical aid patient. The disparities are even more outrageous when it comes to dental services, where onlyR65 was spent per public sector patient, as opposed to R1 004 per medical aid patient.

What all the above translates into is that the richest 20 percent of the population received 36 percent of total benefits while the poorest 20 percent received only 12.5 percent of the benefits.

It is well known that it is the poor who suffer from multiple illnesses due to poverty and lack of access to basic services such as clean drinking water and sanitation, live in dirty surroundings, work under unsafe conditions exposed to human and industrial waste, and do not have a basic education.

Workers and the poor are also subjected to numerous other socio-psychological conditions such as stress due to unemployment and underemployment as well as daily exposure to many forms of violence including rape, assault and murder. So it is the poorest 25 percent that should receive 36 percent of the benefits and not the richest 20 percent, as happens now.

According to the Health Sector Road Map of November last year, there is a large gap between the key human resources in the public and private sectors.

In 2007 the World Health Organisation ranked our healthcare system the 175th best of 191 countries and last among 17 middle-income countries. South Africa is 32nd in the schedule of how much of the national income is spent on health - 8.5 percent.

As we await the NHI proposals, our understanding is that all South Africans will be eligible to join this scheme, pay according to their levels of income and ensure that all are covered to receive healthcare in institutions of their choice, public or private, without any upfront payment. The poor will have to be covered through a comprehensive social security net that will have to include membership of the NHI.

One of the key pre-requisites for a viable NHI will be the upgrading of public health institutions. This will have to include training larger numbers of doctors, nurses and support staff.

As part of campaigning for the NHI, the SACP will revive its campaign for an affordable public health system, including the halting and reversal of outsourcing and privatisation of public health services.

The SACP, with progressive health unions, health NGOs and other mass formations, will in the coming weeks embark on massive mobilisation and education campaign in support of the NHI.

Blade Nzimande is a cabinet minister and the general secretary of the SACP .This is an edited version of an online article