NATIONAL health insurance (NHI) will be one of the biggest reforms South Africa undertakes, and in process and content it will be implemented meticulously, Health Department officials told a medical scheme conference last week. But they dropped no clues at the Board of Healthcare Funders' (BHF) conference in Sun City as to what we can expect or how much we are likely to pay, saying only that the private sector will have an opportunity to debate the NHI proposals when the government releases these for public consultation. According to Dr Anna Mokgokong, the non-executive chairperson of Medscheme Holdings, NHI proposals drafted by a ministerial advisory committee were submitted to the cabinet last year. The cabinet requested further work on the proposals, which has been completed. An inter-ministerial committee is now interrogating the document, the conference heard.
Dr Aquina Thulare, a special adviser to the Minister of Health, Dr Aaron Motsoaledi, said the proposals would be released for public consultation once approved by the cabinet, but she was unable to say when that might be. However, Thulare told delegates that there would be an indaba on NHI "very soon", as they had requested, and all stakeholders would be able to give their input. She advised the delegates to prepare to engage with the government over the NHI policy when it is released for consultation. Thulare warned against speculation that NHI would cost employees between three and five percent of their income, saying that nothing had yet been tabled for public debate. She said the government wanted to ensure that NHI would not see the poorest of the poor paying a bigger portion of their income for healthcare than those with higher incomes. She said the poorest households currently paid as much as 14 percent of their income for healthcare, while higher income earners paid as little as five percent. She said this induced poverty in poor households. South Africa spends 9.3 percent of its gross domestic product on healthcare, Thulare said, but the result of this spending "leaves much to be desired", as our poor health outcomes show.
Proposals ‘Flawed’
The conference heard pleas to introduce proposals put forward previously by a medical scheme industry task team to allow low-income medical schemes that could offer fewer benefits than those that schemes currently have to provide. Thulare said these proposals were flawed, because they offered members who were generally from poor households less than they were currently entitled to receive from state facilities at high contributions relative to their income. There is no clarity yet on whether the government's proposals will involve a single authority that will purchase and pay for basic healthcare services for all South Africans (known as a single-purchaser, single-payer system), or if NHI funds will be channelled through multiple entities, such as medical schemes, that will pay healthcare providers on a patient's behalf (a single-purchaser, multiple-payer system). However, the Registrar of Medical Schemes, Dr Monwabisi Gantsho, called on schemes to submit data to his office for use in a shadow Risk Equalisation Fund (REF) process it is running to determine how an REF could assist schemes by equalising the cost of providing minimum benefits to all members. He said without this data schemes would not be able to explain the difficulties they had providing minimum benefits to the old and sick and how the REF could assist a plan for a single-purchaser, multiple-payer system. Gantsho said he plans to ask parliament to reconsider the introduction of the REF legislation.
What is Expected in the Proposals
While the NHI proposals are still under wraps, the Board of Healthcare Funders (BHF) conference focused on issues that are expected to be in the proposals. These include:
• The tax deduction allowed for medical scheme contributions could be scrapped. The conference heard that the government could provide private primary healthcare to between seven and eight million people if it made use of the estimated R12 billion it currently spends on the tax subsidies that medical scheme members enjoy. Consulting actuary Barry Childs said he based this calculation on the Council for Medical Schemes's 2008/9 report, which showed that the Government Employees' Medical Scheme spent an average of about R115 a beneficiary a month on claims and administration on its low-cost Sapphire option in 2008. The Sapphire option offers primary care in the private sector, maternity benefits in the private sector and public hospital cover. In this tax year (2010/2011), medical scheme members are allowed to deduct up to R670 a month each for their first two dependants and R410 for further dependants from their taxable income for contributions paid.
• There is likely to be a renewed focus on primary healthcare. Dr Anna Mokgokong, the chairperson of Community Investment Holdings, a group that includes healthcare companies, and the non-executive chairman of Medscheme Holdings, the parent company of administrator Medscheme, told the BHF conference that the NHI proposals would redirect the focus of the health system to the provision of primary healthcare. She also said the Minister planned to move away from "an unsustainable and unaffordable curative-based health system to one which has prevention as a key focus". Childs said at least two schemes had restructured their benefits to prevent members from seeing a specialist without being referred by a general practitioner. GPs, therefore act as gatekeepers, preventing members from seeing more expensive specialists unnecessarily. Childs said the effect in these schemes was an 18-percent reduction of hospital costs.
• NHI benefits are likely to be provided on a capitation basis. Dr Olive Shisana, the head of the Health Minister's advisory committee on NHI, said at last year's conference that the government hoped to achieve cost savings by contracting providers to provide certain services to NHI users for a fixed fee a month, which is known as capitation. Two speakers at this year's conference spoke about the cost savings for medical schemes entering into such contracts with doctors. Dr Reinder Nauta, the managing director of CareCross Health, which manages a countrywide network of 1 200 GPs, said a well-run network of GPs can ensure that members get the medicines they need, are referred to specialists when necessary and are hospitalised when they need to be, but that there is no unnecessary expenditure on medicines, specialists or hospitals. This keeps down costs, and members have access to unlimited but appropriate healthcare. Dr Johan Pretorius, the chief executive officer of administration and managed healthcare group Universal Healthcare, said capititation was most effective when members had to choose one doctor rather than being able to see any doctor in a network. He said this prevented members from doctor hopping to get more days off work and ensured doctors got a higher volume of patients, making the lower capitated fee viable.
Laura du Preez: Personal Finance, 28 August 2010
