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Health insurance
Thursday, April 23, 2015 - 02:16
14-year plan

Government has opted for a “systematic” and “rational” approach for the implementation of its National Health Insurance (NHI) programme.
While only 16% of South Africans belong to private medical schemes, healthcare spending for them totals R150 billion a year – the same amount spent on the 84% of the population using the public health system.
This works out at per capita spend of R12 000 a year for private healthcare compared to about R2 500 per person in the public sector, according to Dr Aquina Thulare, technical specialist and advisor to the Department of Health on National Health Insurance (NHI).
She was speaking at a seminar on poverty and inequality held at Unisa during its Research & Innovation Week from 2nd to 6th March.
“In terms of NHI, we know it evokes a lot of emotion,” Dr Thulare said. “Those who have deep pockets have the means to engage in public platforms, especially the media. For the past six years, very strong views have come from the sector that currently benefits. We have also seen strong support from labour and civil society for NHI.”
Outlining the case for NHI, she said government had made significant progress since 1994 in developing a unified healthcare system built on primary health care principles and a commitment to equity. Life expectancy for males had increased from 51.1 years in 2002 to 59.9 years today, and from 55.7 years to 63.1 years for females; mortality rates for infants and children under five were starting to improve.
However, healthcare in both the private and public sectors still revolved around hospitals, and the burden of disease was high, with the impact of HIV and AIDS, tuberculosis and non-communicable, lifestyle diseases starting to be felt.
Fragmented health financing a problem
Various factors were hampering healthcare transformation and the achievement of equity, Dr Thulare said. These included a shrinking public sector health budget in the short term, high income inequality, the divide between public and private health, and fragmentation of health financing pools.
“Each looks after their own,” she said, pointing out that the country has 99 private medical schemes and a plethora of other players such as the Road Accident Fund and Compensation Commissioner.
Fragmentation of financing meant that health spending and benefits were inequitably distributed. “Those with the greatest need benefit the least. The richest derive maximum benefit. National Health Insurance will ensure all South Africans have access to quality healthcare, regardless of their socio-economic status.”
Emphasising that NHI would not be a medical scheme but a funding mechanism that consolidated funding sources to ensure equity, Dr Thulare said services would be free at the point of care. “Households will be protected from catastrophic expenditure,” she said, referring to situations where families faced with health shocks were forced to sell their homes or cars.
The South African Revenue Service (SARS) would collect the revenues for NHI, which would come from general taxes, payroll tax and pre-payment. Risk pooling would ensure that all members of the population, rather than individual contributors, bore the financial risks associated with health spending, and strategic purchasing would give health providers the right incentives to deliver quality services at reasonable cost.

NHI implemented over 14 years

Outlining the roll-out plan for NHI, Dr Thulare said government was not using a “big bang” approach but had opted for a “systematic” and “rational” approach that would see NHI being implemented in three phases over 14 years.
In the first five years – already under way – legislative and institutional reforms would be introduced, health systems strengthened, service delivery platforms improved and components of the NHI Fund simulated.
These activities would continue into phase two, which would “most likely” begin in 2017, with phase three “most likely” to commence in 2021.

Copyright © Insurance Times and Investments® Vol:28.4 1st April, 2015
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