1. Introduction
IMATU is of the view that the proposed National Health Insurance (hereinafter referred to as “the NHI”) is not an insurance scheme, but is rather an alternative method for providing public health care to citizens of the Republic. The NHI should not be seen as a reform of health care or an alternative funding mechanism. Any reform must focus on improving the current public health system and the provision of public health care to citizens.
IMATU is of the view that there is a need for a two tier health system, which is in existence in countries which have a similar developmental status as South Africa. The mere fact that members of a medical scheme have greater options to choose from is immaterial, as the medical scheme contributions are paid by the individual member (often with employer contributions). The relevant benefit option is determined by the needs of the relevant member. This means that the disposable income of a family is therefore increased or reduced by the choice made in respect of the relevant benefit option.
It is wrong to conclude or assume that medical scheme members have a choice of service providers, as compared to the remainder of the population who do not have a medical scheme cover. The reality is that members of medical schemes pay for this benefit. In many instances, principal members of medical schemes consider medical aid membership a necessity. The fact that consumers consider medical aid benefits as a necessity results therein that that they have less disposable income available to spend on other goods and services.
Medical schemes are the main contributors to private health care. This does not detract from the principle that medical scheme members pay for the service that they receive (over and above the cover provided by the medical scheme). This is done through co-payments and other out-of-pocket expenses.
The mere fact that the public health sector lacks resources, both in human capital resources and financial resources, is not an issue which will be corrected by the introduction of a NHI system. These issues must be addressed at a policy level by National Government. The optimum level of staffing in all health departments (national, provincial and local) is a national issue, which needs to be critically addressed. Vacant positions within the public health sector must be filled as a matter of urgency.
IMATU does not agree with the notion that NHI will provide for medical cover for the whole population. In other countries (which have a GDP similar to that of the Republic), NHI has resulted in considerable co-payments and other out of pocket expenses for members covered by NHI. It is therefore wrong to assume that NHI will provide comprehensive medical care for all citizens of the Republic. The reality in the present day South Africa is that members of medical schemes prefer private health care through co-payments or direct out-of-pocket expenses, due to lack of confidence in the public health care system.
An improvement in the overall health care system will only be achieved if the standard and quality of health care in public health care institutions is drastically improved. The devolution of primarily health to the lowest level, and third tier of government, is one of the key elements in improving overall health care services.
2. Problem Statement
IMATU acknowledges that various reform initiatives have been introduced since the advent of the democratic South Africa. These initiatives have proved unsuccessful, due to a lack of political will and/or executive intervention.
IMATU is of the view that the Republic will never be in a position to move away from a two tier health care system. Other countries, which have comparable GDP’s to the Republic, successfully utilise a two tier health care system. Their health outcomes are, however, significantly better than those of the Republic, as public health care is provided for far more effectively in terms of capital expenditure.
The institutional collapse in public health care should be addressed before the concept of NHI can be meaningfully considered. The human resources requirements for all health departments should be addressed as a matter of urgency. The reasons for the ineffective application of available funding of public health care institutions should be determined before the concept of NHI can be meaningfully engaged upon.
IMATU is of the opinion that the overall image of public health care should improve by providing a quality public health care service, which citizens will have the confidence to rely on and use.
IMATU agrees with the statement that private health care has its own and unique challenges, especially in areas of affordability and spiralling costs. IMATU is, however, adamant that the problems in public health care should be addressed separately from those in private health care. IMATU is thus of the view that it is disingenuous to suggest that the problems in both private and public health care can be addressed simultaneously.
3. The Burden of Disease
The concept of the quadruple burden of diseases, identified in the Lancet Report, is wider than merely health related issues. It contains elements of a socio-economic nature, law and order elements, lack of morals and ethics (violence against women and children) in our society, and lifestyle elements (education), regarding non-communicable diseases.
4. The Quality of the Health Care System
The deep-rooted problems in the provision of public health care should, in the first instance, be addressed in order to achieve an improvement in the overall health outcomes of the Republic.
The NDOH has been pro-active in identifying these problems, which consist of various factors, and which will require various interventions within the public health care system.
5. Health Care Expenditure in South Africa
The 4.1% of GDP spent on private health care, which caters for 16% of the population, should not be seen as disproportionate to that of the percentage of citizens utilising public health care. The fact that citizens are members of medical schemes is an individual choice of such member, who pays for this benefit. Membership of a medical scheme reduces the net income of such members, and in turn this leads to lower disposable income. The notion that members of medical schemes are in a better position in receiving health care, is therefore wrong.
It is furthermore apparent that the institutional collapses of public health care facilities have led to a scenario where citizens have no confidence in the public health care system. Citizens perceive private health care as a necessity and will use their available income to receive private health care. This also applies to persons who do not belong to medical schemes but who are willing to make the necessary out-of-pocket payments to afford private health care, due to a lack of faith in the public health care system.
6. Distribution of Financial Resources and Human Resources
The lack of human resources within the public health sector is exacerbated by the fact that vacant positions in the whole of the public sector, are not filled. The NDOH should develop an organisational structure that accurately determines the number of health care professionals needed, as measured against the number of patients. Addressing the shortcomings in the human resources environment will go a long way to improve the overall health outcomes in the Republic.
The fact that the amount per capita spent in the private health care environment is more than is spent in the public sector, is due to the fact that members of medical schemes pay for this benefit. These members are not in a better position when compared to citizens who receive free public health care services.
7. Medical Schemes Industry
IMATU acknowledges that deep-rooted problems exist in the medical scheme environment, and within private health care.
IMATU is, however, of the view that these problems should be addressed separately from the collapse in public health care. Any improvement in the overall health outcomes for the Republic should primarily take place through the transformation of public health care.
8. Out of Pocket Payments and Co-Payments
Citizens will continue to use private health care by incurring out of pocket expenses and/or through co-payments, because they have no confidence in the public health care system.
9. History on Proposals for Health Care Financial Reforms
The policy document supplies a synopsis and history of previous health care reform initiatives. IMATU supports NDOH’s attempts to address the problems in public health care as a matter of urgency.
10. National Health Insurance
The term National Health Insurance or “NHI” is a misnomer and is incorrectly applied in the present context. What is proposed in the policy document is not an insurance product, but rather a model for the delivery of public health care.
NHI should not be an objective of public health care, but should rather be seen as a method whereby public health care is provided to all citizens.
11. Principles of National Health Insurance
Appropriateness is identified as one of the key principles of NHI. It is furthermore stated that primary health care should best be provided at a local level. IMATU supports the concept that primary health care be provided at local level. This will ensure proper governance and accountability at local level.
The above principle, however, seems to be contradicted by the stance of various provincial health departments, who insist that municipal clinics and the services they provide to local communities, be transferred to provincial health departments.
12. Objectives of NHI
One of the main objectives of NHI seems to be universal coverage wherein everyone has access to health care. Already, though everyone in the Republic currently has access to public health care facilities. The problem is not founded in the accessibility of the public health care system, but rather in the manner in which public health care services are provided to citizens. These problems should first be addressed, whereupon the concept of “universal coverage” will become academic.
13. Socio-Economic Benefits of NHI
The notion that the public financing of health care will free up citizens to spend their disposable income on other goods and products are materially wrong. Citizens will continue to incur out of pocket expenses for private health care if public health care provision is not drastically improved.
14. Economic Impact Modelling
The economic impact assessment seems to ignore the fact that the introduction of NHI will lead to an increase in taxation. This in turn will mean less disposable income for individuals, which in turn will mean that individuals will have less money available for other goods and services. The economic impact of NHI should therefore be further assessed before any meaningful assessment can be made regarding the economic impact of NHI.
15. The Re-Engineering of Primary Health Care
IMATU supports the re-engineering of primary health care. Primary health care institutions should operate, and fall under the jurisdiction of local authorities and not those of provincial or national health structures.
In order to ensure proper governance and accountability the re-engineered primary health care system should be accountable for all its activities at a local level.
16. District Specialist Support Teams
The concept may lead to an improvement of the overall health outcomes in the Republic. It will, however, only be successful if the current problems in the human resources environment within the health sector are addressed.
17. Municipal/Ward Based Primary Health Care Agents
IMATU supports the concept of at least ten primary health care agents per municipal ward. IMATU is, however, of the opinion that these structures must be accountable to local communities and municipal councils, to ensure proper governance and accountability.
18. Delivery of Primary Health Care through Private Practitioners
If private practitioners should provide primary health care then the following problems could arise:
Long waiting lines of patients will not be addressed due to the capitation of the service to be provided;
The private service provider may refer the patient to the district or central hospital system as there is little incentive for an early and proper diagnosis;
The private service provider may also insist on an out of pocket expense and/or co-payments over and above the capitation fee provided for by the NHI.
19. The Office of Health Standards Compliance
The concept may lead to an improvement of the overall health outcomes in the Republic. IMATU is, however, of the view that this body will only succeed if there is adequate human resource capacity within the NDOH to properly staff the compliance office.
20. Payment Procedures under National Health Insurance
The capitation is a private sphere concept aimed at controlling costs in the private sector. It should therefore not apply to public health care institutions, who operate under budgetary constraints, and who are mandated to provide health care in terms of the Constitution. Capitation of fees of accredited private service providers will also lead to a two-tiered system in that private service providers will claim the capitation against the NHI, and insist on an out-of-pocket payments or co-payments for fees in excess of the capped amount for a particular service or procedure.
21. Health Care Coding System
The notion that the introduction of a coding system will lead to proper planning will only be sustainable if the human resources shortcomings are addressed in all departments of health and in all spheres of government.
22. District Health Authorities
IMATU does not support the notion that District Health Authorities should be able to contract with NHI. District Health Authorities are politicised structures, which are not governed and/or accountable to communities at a local level in respect of the functions which they have to perform. It will also open the door for corruption and other financial malpractices.
23. The Role of Co-Payments under NHI
It is IMATU’s submission that private health care providers will not charge fees in accordance with the NHI protocols and guidelines. They will therefore insist on co-payments or out-of-pocket payments in excess of the NHI protocols and guidelines.
This will have a twofold effect on consumers, who will either have to fund this co-payment or out-of-pocket expense, or alternatively the patients will be compelled to use the public health care system only.
Citizens will prefer the option of a co-payment or incurring out-of-pocket expenses, which will not address the inherent problems in private health care, namely the issues of spiralling and uncontrolled costs, and the over servicing of patients.
24. How Much Will NHI Cost?
The policy document states that the Republic spends approximately 8,5% of GDP on health care. Other developmental States spend far less than 8,5% of GDP on health care. They, however, have significantly better health outcomes. IMATU is of the view that interested parties should first look at the shortcomings in the current public health care system. If these shortcomings are addressed through the necessary political willpower and executive interventions, the overall health outcomes will drastically improve in relation to the percentage of GDP spent on health care. IMATU is of the view that the solution to the current problems facing health care does not lie in the introduction of NHI. The question which must be answered, is why the current percentage of GDP spent on health care does not produce positive health outcomes. What interventions should be implemented to achieve a positive outcome? This is the real question to be answered.
25. The Establishment of the National Health Insurance
The establishment of the NHI as a government-owned entity will create another bureaucratic institution. All central government institutions that collect and disburse funds are prone to financial mismanagement and irregularities. This immediately poses issues of oversight, governance and accountability. Parliamentary oversight is not an appropriate control mechanism, it is submitted.
26. The Role of Medical Schemes
IMATU is concerned that the introduction of NHI will effectively lead to the demise of all medical schemes in the local government environment. Local government employers will not, as they currently do, contribute to both NHI as well as accredited medical schemes. Local government entities, as part of the broader public sector, will merely inform employees that they will only contribute to NHI due to the fact that they are compelled to do so in law. Local government employees who wish to belong to accredited medical schemes will be forced to pay the full contribution from their own earnings. The employer subsidy will fall away as the employer will only contribute to NHI. Most of the IMATU’s members, belonging to medical schemes, will be forced to relinquish their medical scheme membership and rely solely on NHI. This scenario includes the predicament of thousands of municipal pensioners who receive post-retirement medical aid contributions from their former employers. The position of these pensioners is not dealt with in the policy document.
The introduction of NHI is also seen as an additional form of taxation and a compulsory statutory deduction. This may have a detrimental effect on the South African economy as a whole, in that households will have less disposable income available for other goods and services.
27. The Registration of the Population
The financial implication of registering the population needs to be amplified in order to assess the impact of the registration on the proposed NHI scheme.
28. Information Systems for NHI
The required Information Communication Technology Resources need to be pre-determined in order to assess whether they will contribute to a successful implementation of the NHI system for the Republic.
29. Conclusion
IMATU is of the view that the proposals contained in the policy document contain no elements of NHI. The document is seen as an attempt to reform the provision of public health care through an additional funding mechanism. The problems in the provision of public health care should be addressed as matter of first priority before the concept of NHI can be meaningfully engaged upon.
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