Funders
Discovery’s response to the debate concerning a proposed national health insurance system for South Africa
10 June 2009
What is a National Health Insurance System?
“National Health Insurance” (NHI) is interpreted differently by different stakeholders. Internationally, a wide variety of different systems all go by the name of National Health Insurance. In essence, an NHI system is a health financing system through which the whole population has access to a defined package of health services, which is funded by a combination of specific payroll taxes and/or general taxation. Services may be delivered by public hospitals and publically employed medical staff and/or by private hospitals and doctors, depending on the setting.
Countries with diverse health systems as the UK, Canada and many European countries all have NHI systems. What these countries have in common is that their economies are highly developed, with high levels of personal income, low levels of unemployment and low levels of income inequality. As a result of these economic features, these countries have a large taxpayer base which can fund the costs of the NHI benefits. They can also afford to subsidise the minority who are unemployed and not able to contribute.
In almost every country with an NHI system, private health insurance systems exist alongside the NHI. In some countries, funds similar to medical schemes act as the “carrier” for the NHI system, and all citizens must belong to one such scheme. In other countries, there is a single national carrier for the NHI, and private medical schemes function in parallel with the NHI. In these models, all citizens must make a tax contribution to the NHI, and those who want to can purchase private health insurance as well.
The NHI debate in South Africa NHI is not a new policy issue in South Africa. The ANC and the Government have in fact been committed to some form of NHI since 1994. The recent media attention on this issue is due to the renewed commitments by the ANC and by the recently elected Government to implement an NHI system over the next five years. At this stage, there are no official policy documents regarding any new NHI proposals in the public domain. We are aware that an internal ANC Task Team has been developing proposals for an NHI system, and the Minister of Health and other government spokespeople have indicated that an official document will be released for public comment before the end of June 2009.
Notwithstanding the absence of formal policy documents on the NHI, we expect the proposals to contain some or all of the following elements: · A new dedicated tax on the formally employed to fund the system (alongside contributions from general taxation). This may take the form of a new payroll tax, or be included in the general tax system. There is currently no information on the level of new taxes to be raised for the NHI. · Setup of a new National Health Insurance Authority to pool existing and new tax revenues for the NHI, and to organise the ‘purchasing’ of services for the population from primarily public, but also some private providers (including private doctors and hospitals). · There has been some speculation in the press that the NHI proposals for South Africa will force all citizens to belong to the NHI only, and will prevent people from purchasing private cover through medical schemes. We believe that this scenario is extremely unlikely. The most likely scenario is that those who want to continue with their medical scheme membership will be free to do so.
We expect official documents on the proposed NHI system to be released shortly, and we are hoping that, thereafter, all stakeholders will engage in a vigorous and informed debate as to the most appropriate model of an NHI system for South Africa.
Discovery Health’s views on the NHI debate Discovery Health strongly supports healthcare reforms aimed at making high quality healthcare accessible to all South Africans
As one of the leaders in the South African healthcare industry, Discovery Health strongly supports the objectives of the proposed National Health Insurance system. Our country should aspire to provide all its citizens with universal access to decent quality healthcare. We also believe that access to good quality healthcare is a constitutional right for all South Africans and our task is to continue working towards this goal.
We believe that an NHI system for South Africa should be developed around the specific dynamics of our healthcare system, and should take our current stage of economic and social development into account. Any proposed changes should avoid significant increases in individual and corporate taxes, as this would place additional strain on job creation and economic growth. This is particularly critical at this time of economic crisis, with government budgets under strain and where all agree that job creation is a critical priority.
We believe that some NHI models be successfully implemented and assist in achieving the goals of universal access to decent quality healthcare, but much will depend on the specific details of the proposals and how these are implemented. We believe that all stakeholders, including government as well as public and private role-players should consider the following principles as the NHI debate is taken forward:
1. An open and rigorous public debate is essential There should be extensive public debate on the proposed format of the NHI, so that its consequences for the health sector and other areas of the economy are widely interrogated and understood before implementation. A debate of this kind will certainly lead to a better set of proposals, with wider support and a much higher chance of successful implementation.
The public debate should include evidence from detailed analyses of the costs and benefits of any new NHI proposals. A new system must be researched thoroughly and should be based on local and international best practice and experience. This will ensure that proposed changes and expectations are realistic and practical.
Discovery is a committed and responsible stakeholder in South Africa’s healthcare system. As such, we have always and will continue to participate actively and constructively in health policy debates, including the NHI debate. We are confident that all stakeholders will take part in this debate, and that this process will lead to the emergence of a constructive model that will meet the needs of all South Africans.
2. Focus on improving the public healthcare system There is a critical need to improve the public healthcare system, and particularly public hospitals. South Africa needs to invest more resources – financial and human – to ensure that public hospitals can deliver quality care to all South Africans. Additional funding and improvements in governance and management are all critical to ensuring that our public healthcare system meets its responsibilities and provides decent quality healthcare to those who depend on it. This focus on the public healthcare system should be the absolute top priority for any healthcare reforms.
3. The private healthcare system is a national asset, and should be part of the solution to South Africa’s healthcare problems Any proposed NHI policies must nurture the assets that have been built up in South Africa’s private healthcare sector. This sector is a national asset, with world class hospitals, specialists, GPs, health fund administrators and risk managers. The private sector should be seen as part of the solution and not part of the problem in achieving the objectives of universal access to quality healthcare for all South Africans. To achieve this goal, we need to nurture the private sector and build effective partnerships between the public and private sector. These partnerships could assist the NHI in achieving its goals of improving the quality and accessibility of healthcare services for all South Africans. Conversely, any policies which damage the private healthcare system will have negative consequences for our society and economy, without any gains for the public healthcare system or the NHI.
FAQs 1. What will happen to medical schemes within an NHI system?
We believe that medical schemes will continue to function alongside the proposed NHI system, and that all current medical scheme members will continue to belong to their medical scheme and receive high quality health cover. We believe that South Africans have a constitutional right to purchase the health services they want, either directly, or through medical schemes.
Because of the high levels of unemployment in South Africa and the small tax base, the NHI is not likely to be able to raise sufficient funds to afford a comprehensive package of benefits for the entire population. This means that those who currently purchase medical scheme cover will not be able to get the comprehensive cover they are used to from the NHI system. For this reason, they are likely to continue to contribute to their medical scheme to have to access the comprehensive benefits currently available within the medical scheme system.
2. How will the NHI process unfold from now? A formal NHI proposal is expected from government by the end of June, which will contain more substantial detail, to which Discovery and other stakeholders will be able to respond. We would expect to engage with policymakers on these issues over this period as we represent the healthcare interests of a significant number of South Africans. A proposal of such expected impact is likely to be released as a White Paper first and receive significant attention in terms of public and debate and comment. It is also likely that the proposal should be debated thoroughly in the Nedlac forum as it has significant effects on all of government, labour, civil society and business.
3. Over what time frame will these proposals be implemented? At this early stage of the NHI debate, the timeframes for implementation remain unclear. We would expect that the public consultation process and subsequent legislative process will take several months, so the actual implementation is unlikely before 2011 or sometime thereafter. The experience from dozens of other countries confirms that the movement towards a full NHI system tends to be slow and deliberate, and that NHI systems are dependent on general economic and employment growth for their successful implementation. Thus, we would expect to see initial implementation of some of the changes considered above in the next one to two years, and for the fully developed NHI system to take many years to implement.
