Debate around funding, workings of NHI rages on

What is unclear is the precise role of medical schemes under this service

THE WEALTH OF DATA, EXPERIENCE AND EXPERTISE THAT EXISTS IN THE PRIVATE SECTOR SHOULD BE BUILT ON RATHER THAN DISCARDED

There continues to be significant uncertainty and huge debate around the government’s proposed National Health Insurance (NHI), particularly exactly how it will be funded and how it will work in reality given the state’s poor track record in managing the public health sector.

Medical associations including the Council for Medical Schemes, the Board of Healthcare Funders and even the South African Society of Anaesthesiologists have stated their support for the intentions of NHI to provide universal healthcare for all South Africans.

Most medical schemes say they are actively working with and liaising with government around NHI. However, what is unclear is the precise role of medical schemes under NHI.

In a country with SA’s social and economic inequalities, the more people who have access to private funding to cover healthcare expenditure, the better, argues Jeremy Yatt, principal officer of Fedhealth.

Rather than trying to create equality by bringing everyone down to the lowest service level, government should be trying to improve existing mechanisms.

“The wealth of data, experience and expertise that exists in the private sector should be built on rather than discarded,” he says.

He questions the competence of the public sector. “It has to be universally accepted that service levels and outcomes are generally poorer in the state compared to the private sector.”

Yatt attributes this to poor management along with corruption rather than an insufficient allocation of resources to healthcare.

“In terms of international standards, the 4.5% of GDP that the state allocates to healthcare is not too little. Rather, it’s how the budget is spent that is the problem. The notion that it’s because private sector spending denies the state access to specialist care has been debunked: specialists don’t want to work in a poorly facilitated environment of incompetence.”

The state, he adds, is unable perhaps even unwilling to address the root problems. “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.”

Yatt voices the concerns of many South Africans when he points out the biggest question regarding NHI is 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 health 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,” says Yatt.

“It is still early days and there are many aspects of the proposed NHI that have not yet been clarified,” says Joshua Joubert, CEO and principal officer of CompCare Medical Scheme. “We believe there will always be a role, if somewhat altered, for private healthcare and healthcare funders in a future healthcare dispensation.”

Independent certified financial planner Dawn Ridler says the hope is that common sense will prevail and a significantly watered-down version of the NHI will ultimately be implemented.

SA cannot afford NHI, she insists. “Estimations are that NHI will cost an additional R230bn over and above the R233bn already allocated to healthcare. This will make it a state-owned entity twice the size of Eskom. To get those kinds of funds from taxpayers would mean that personal income tax would have to double. For taxpayers on the 45% level that would mean increasing personal income tax to 90%. VAT could be used but it would need to increase to 25% or more. It’s estimated at least a third of the health department funds are wasted, so the first priority should be to fix that.”

Current NHI proposals indicate that medical aids will only be allowed to cover conditions not covered by NHI.

In the event that NHI becomes a reality, the biggest potential risk, says Ridler, will be inferior hospital care, especially for severe conditions such as heart attacks, strokes, cancer and accidents.

“The one thing you can do to mitigate this is to take out good dread disease cover with a life insurance company,” she suggests. “This isn’t easy as they vary considerably in the number of conditions they cover, when they pay out, how much they pay and whether or not the cover reinstates for other conditions. Because you want this cover for your entire life, it needs to be affordable for the duration and not increase astronomically as you get older and are on a fixed income.”

This is what brokers call the “premium pattern”, explains Ridler. “In a nutshell this needs to be a true level premium where the benefit increases at exactly the same rate as the premium. This is hard, but not impossible, to find. This cover will pay you a lump sum for a long list of conditions, in much the same way as medical insurance operates.”

This provides consumers with the option of accessing private healthcare worldwide.