Fedhealth’s positioning statement on NHI
Drickus Maartens • October 8, 2019
The release of the NHI Bill has sparked huge debate, with battle lines being drawn between detractors and supporters. One of the issues with the Bill is that it generates more uncertainty even as it aims to set out exactly what NHI will do for the country going forward. Fedhealth has had the opportunity to explore the Bill in its context and would like to contribute to the debate.
UHC VS. NHI
The first, most important thing to emphasise is that Fedhealth unconditionally and categorically supports the concept of Universal Health Care (UHC). The idea that millions of South Africans don’t have access to decent healthcare is completely unacceptable; the notion that private sector funders are opposed to expanding access is therefore absurd.
In a country with South Africa’s social and economic inequalities, the more people who have access to private funding to cover healthcare expenditure, the better. Our government should be exploring ways to improve the mechanisms that exist rather than trying to create equality by bringing everyone down to the lowest service level. The wealth of data, experience and expertise that exists in the private sector funding sector should be built on rather than discarded.
Role of medical aids
Medical schemes are not for profit entities, similar to stokvels. Members pay money to a fund that will assist them with medical related expenses. There is a strong sense of social solidarity in a medical scheme – a modest amount every month gives members access to massive healthcare value, in the process protecting their investments and assets.
Many South Africans seem to misunderstand the situation: schemes are seen as greedy profit chasing entities sitting on piles of money and not paying for simple treatment. The truth is that in 2017 alone, schemes paid out R160.6 billion towards the costs of many and varied ailments*. In order to remain sustainable, members need to contribute to these costs. If there were more lower-claiming members, costs would be lower, but healthier, lower claimers find little value in schemes, so they opt out. This in turn drives up the costs.
Without medical aids, not only would many people not have access to quality medical treatment, many highly qualified and committed medical personnel would not be able to make a living. Doctors have spent years to become as skilled as they are, and their work literally entails life or death decisions. The medical fraternity has to be recognised as a vital thread in the fabric of our society and medical schemes should strive to strengthen this vital service. Many services are only provided because of the existence of medical schemes that are able to fund these procedures. One example is knee replacements, which are not available to patients in the public sector.
The problem statement
In South Africa, there is a two-tiered system: private and public. It’s generally accepted that the private sector offers better quality but is very expensive, while the quality of care in the public sector is very indifferent but at least it is free. These are two separate issues that need to be addressed in different ways:
1. Private sector cost – there are a number of factors that contribute towards rising healthcare costs, and only a few of them are peculiar to the South African situation. Non-communicable disease increases (mostly caused by poor lifestyle choices), medical technology advances, an ageing population and Fraud, Waste and Abuse are common in every other jurisdiction in the world. However, in South Africa we have an environment with open enrolment, community rating and prescribed minimum benefits. These seemingly positive features have the problem of eroding value for younger, healthier lives and without mandatory enrolment there is no incentive to keep risk pools viable. Added to a weak economy that is cutting jobs or at the very least, reducing take-home pay, and we see why the few people who join a medical scheme are generally those with greater healthcare needs.
The Health Market Inquiry is bound to make some recommendations that can deal with the other structural issues in the private healthcare sector and which could, if accepted by healthcare professionals, go a long way to improving access and reducing cost of private healthcare.
What must always be remembered though is that this sector of the market is funded by individuals using their after-tax monies. Any concession achieved by tax credits is more than made up for by medical aid members not burdening the state.
2. Public sector competence
– it has to be universally accepted that service levels and outcomes are generally poorer in the state than in the private setting. This can be attributed to poor management (along with some corruption) rather than the state not allocating enough resources to the sector. In terms of international standards, the 4.5% of GDP that the state allocates to healthcare is not too little. It’s how it is spent that is the problem. The notion that it is because private sector spending denies the state access to specialist care has been debunked – specialists do not want to work in a poorly facilitated environment of incompetence. The tragedies playing themselves out on a daily basis are testament to the inability and perhaps even unwillingness to address the root problems. But what is clear is that, if more of a burden could be taken off the state in terms of increasing medical aid membership, the easier it would be to address the systemic and management problems facing the Department of Health.
The greater healthcare conundrum
The difficulty that many people have with the proposed legislation is that it seems to want to create equality by providing everyone with poor quality healthcare, rather than raising the standards in the state. Whether this perception is fair or not, it is based on historical evidence of government’s inability to meet basic standards of performance. Apart from that, a number of other questions arise:
- The issue of cost has been well documented. It may in fact not be the biggest problem facing the proposal, but it may also be a big factor in determining what exactly is going to be covered. And that leads to the next question;
- What exactly is covered? According to the ministry, a team is working on it together with treasury officials. But the lack of certainty, as well as how schemes are supposed to stay viable if they basically offer an anti-selective product range, is creating anxiety in the market.
- Is the Bill’s intention to make everyone a member of NHI constitutional? What about freedom of association? And can doctors be made to participate, with patients being obliged to follow referral pathways? Those with experience in healthcare funding know how hard it is to apply these practices and it is difficult to imagine that current medical aid members in state schemes like Parlmed, Polmed and GEMS will meekly submit to having their benefits slashed with perhaps a marginal cost saving.
- The biggest question is about the ability of the state to manage a superfund as envisaged by the single purchaser model without it falling into the hands of state capturers. The governance model puts too much power in the hands of politicians and while the current minister may well categorise himself as honest and untainted, it should rather be a system that prevents political and financial manipulation instead of the application of trust in people who clearly haven’t earned it.
The way forward
If the government was really serious about improving the health system, it could possibly consider adopting some of the following points:
- The expertise and knowledge of the various private sector players (in funding, healthcare provision and clinical management) should be sought out and extracted.
- Some of the recommendations of the Health Market Inquiry should be implemented to:
- Allow practitioners to practice medicine and not be involved in administration of benefits (i.e. get a salary for practicing medicine from an Health Maintenance Organisation)
- Investigate the course and scope of issues such as the prescribed minimum benefits in order to reduce the costs of membership, thereby allowing greater membership (Remember the LCBO debate in 2015? What was the outcome of that?)
- Simplify the benefit structures and coding systems to make it easier to understand and to reduce uncertainty over which benefits are provided.
- Create an environment that generates more employment.
Source:
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Naturally, this model calls for the open participation of patients, the healthcare industry, health professionals, and the Government. “The most critical elements are robust diagnosis standards, improved access to treatment, data collection and management, co-ordination of care, measurement of outcomes and ongoing collaborative research,” du Plessis says. “We need to establish rare disease advisory committees, map gaps and opportunities, establish system requirements, create a roadmap and plan a phased implementation with clear timelines.” The RDAI states that these policy development steps would be a start in quantifying the disease burden and defining standards of care. This would be followed by building and strengthening the capacity to facilitate appropriate diagnosis, treatment, continuity and data monitoring. 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About RDAI The Rare Diseases Access Initiative (RDAI) is dedicated to advocating for improved healthcare access, policy development, and patient support for those affected by rare diseases in South Africa. The initiative brings together key healthcare stakeholders, including pharmaceutical associations, funders, genetic specialists, and patient advocacy groups, to drive impactful change. About RDSA Founded in 2013, Rare Diseases South Africa (RDSA) is a non-profit organisation advocating to ensure that people living with rare diseases and congenital disorders experience greater recognition, support, improved health service and better overall quality of life. Started out of personal need following the diagnosis of organisation founder, Kelly du Plessis' son, it became evident that there was a lack of awareness and support for rare diseases in general in South Africa. 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