In 2001 the World Health Organisation rated South Africa 175 out of 191 countries surveyed for expenditure versus outcomes on health. Since then, little has changed. Comparing life expectancy in SA to countries such as Brazil, Chile and Mexico, all of whom spend approximately the same or less on health as SA does, we do not fare well. South Africa’s life expectancy for males is 50, while Brazil’s is 68, Chile’s is 75 and Mexico’s is 72. South Africa’s infant mortality rates are equally disturbing compared to these countries, with ours being 69, per 1000 live births compared to 20 in Brazil, 9 in Chile and 35 in Mexico. The Millennium Development Goal target is 24.

According to the Development Bank of SA’s “Roadmap for the reform of the SA health system” out of 30 peer countries, SA is the only one to experience a worsening of the infant mortality rate per 1000 live births over the period 1990 – 2006. SA is also unique amongst its peers in facing worsening maternal and child mortality.

South Africa has almost the highest incidence of TB (all forms) per 100 000 population and, of the 15 countries with the highest estimated TB incidence in 2005, South Africa and its neighbours (Botswana, Namibia, Zimbabwe, Mozambique, Lesotho, Zambia, Malawi and Swaziland) represents 9 of these countries.

But inefficiencies in health spending and outcomes are not particular to the public sector. The fact that there is a divided healthcare system contributes significantly to these dismal results. Health expenditure by the members of medical schemes on the approximately 7.4 million private beneficiaries is six times that which is spent by Government in the public sector. Also contributing to the inefficiencies is the imbalance in human resources in the private sector versus the public sector. Where there is one pharmacist for every 1000 beneficiaries in the private sector, there are 17 000 beneficiaries to one pharmacist in the public sector. Similarly, there is one GP for every 540 beneficiaries in the private sector whereas there are 4000 to every one GP in the public sector. This, amidst a growing burden of disease especially in the public sector.

The regulatory framework under which medical schemes are structured also contributes to the inefficiencies in the private sector. Key amongst these are:

• The Prescribed Minimum Benefits, which are structured around diagnosis and severity as opposed to specific health interventions that are the most cost effective and epidemiologically appropriate for the maintenance of the health of insured populations;
• The Competition Commission Act which prohibits medical schemes to act collectively but allows the private hospital oligopoly to prevail;
• Difficulties in securing contracts with public sector providers of health care services; Mandatory community rating without compulsory membership;
• The lack of meaningful growth due to a combination of factors the most important of these being the slow rate of employment growth in the South African economy. Medical scheme principal members correlate very closely with personal tax payer numbers. These have only started to grow over the past 3 years, and have been stagnant for the 8 years prior to that;
• The lack of health technology assessment.
• High costs of private healthcare services in relation to the growth of salaries and wages. These high costs are due to a number of factors, including ongoing ageing of the medical scheme population, the high and progressively increasing rates of chronic diseases including cancer, diabetes, cardiovascular disease and HIV/AIDS, as well as the high rate of entry of new medical technology at high prices. These trends are aggravated by supply side constraints. According to Professor Di McIntyre of the University of Cape Town’s Health Economics Unit, the share of income for richest 10% of population increased from 47% in 1995 to 51% in 2005 while the share of income for poorest 10% decreased from 0.5% in 1995 to 0.2% in 2005.

The above factors have all influenced the need for a change in healthcare system. But while details of the proposed system remain scarce, we do know that there is a task team, led by Dr Olive Shisana, working on a ‘tailor made’ NHI model to suit South Africa and that the issue of healthcare reform will be high on the agenda if the ANC are successful in the upcoming elections.