National Health Insurance – Finding a model to suit South Africa

The announcement at the recent Board of Healthcare Funders’ conference by Dr Zweli Mkhize that it is not a matter of ‘if’, that there will be a NHI in South Africa, but ‘when’ , has sent a ripple of anticipation through the world of healthcare experts, because although the concept of universal coverage enjoys the support of most people, finding a model which will suit the South African environment will not be an easy task.

There are a number of critical aspects which must be considered when reflecting on such a system. The question of the benefit package must be the most important one. In an ideal world the NHI package would cover a comprehensive package of primary and preventative benefits as well as referred and hospital care equally for every member of the population, with no rationing. But even in the most sophisticated health systems in the most developed countries in the world, this benefit package is not fully comprehensive. The queues in the UK, the need for top-up cover in France, and more and more talk in developed countries about not treating smokers and the obese for some conditions until they have lost weight or stopped smoking are just cases in point. In designing a benefit package, the main aim must be to provide the most benefits for the most people, given the pool of funds available.

But to do this, experts will have to cost this package, which will be challenging for a number of reasons. On the one hand, using public sector data will be difficult because ICD 10 coding (diagnosis codes) are not routinely used and collected, and the tariff schedule used in the public sector, the UPFS (Unified Patient Fee Structure) is not reflective of the actual costs of providing the benefit as it does not take into account costs such as infrastructure, etc. Added to this, the rationing policies in the public sector, for example, not providing renal dialysis to people over the age of 65, will make accurate costing difficult. In the private sector, on the other hand, the collection of ICD 10 codes is mandatory, so costing of the PMB package should be possible, but it is difficult to know whether the utilization patterns in this sector are accurate, given the examples of procedures such as deliveries where 75% are performed by C-Section when the international average is in the region of 21%.

Another key aspect of an NHI system would be that of revenue collection. Assuming that the costing had been accurately done, and that a reasonably comprehensive benefit package was affordable, an earmarked tax from payroll seems the most logical manner in which to collect these funds. Critical to this process will be buy-in from labour and employers alike.
The question of whether purchasing should be left to a single fund or multiple funds will also be a key consideration. Apart from the fact that the current funding sector has much to offer in terms of expertise and infrastructure, the issue of choice under the NHI system may well be one which will affect consumers the most.

Ideally, charging for the NHI package will fall under a regulatory framework which will ensure fair and transparent fees for providers of service. This, together with the increase in volumes for providers will hopefully prevent further migration of skills and may entice back those providers who had left the country to work in other National Health environments. The upliftment of the public sector to be the vehicle for the provision of the NHI package is critical and there may well be an opportunity for funders to contribute to this process. Creating incentives for healthcare professionals to return to the public sector must also be explored and implemented to ensure high quality and good outcomes.

Top-up cover is common in most countries offering National Health Insurance, and the South African model may be no different. The question will be whether medical schemes compete with insurance companies or whether the current principles of social solidarity will remain, offering some protection to schemes.
Whatever the ultimate model, the progressive realization of universal coverage will accelerate a much needed reorganization of the current healthcare system into one which is hopefully more affordable, equitable and accessible than the current one.
Written by Heidi Kruger – Head of Corporate Communications, PCNS and FMU at the Board of Healthcare Funders

The views expressed in this article are the views of the author and do not necessarily reflect those of the BHF or its members

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