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Mediclinic News : OPINION: COSTING NHI: TIME TO GET OUR HEADS OUT OF THE SAND

Title

OPINION: COSTING NHI: TIME TO GET OUR HEADS OUT OF THE SAND

Date

2019-03-07

Link

https://medbriefafrica.co.za/opinion-costing-nhi-time-to-get-our-heads-out-of-the-sand/

News Description

MEDBRIEF AFRICA A recent article in the Sunday Times “Better not to know total NHI cost” is reflection of the Minister of Health being totally disingenuous and denialist of what is required in South Africa’s aims to achieve Universal Health Coverage (UHC). Although the World Health Organisation (WHO) is alluded to in the White Paper as cautioning that while costing assumptions and scenarios may be useful for raising core policy issues regarding the sustainability of reforms, it is not useful to focus on getting the exact number indicating the estimate costs. The WHO, however, clearly states in the quoted document that costing assumptions and scenarios may be useful for raising core policy issues regarding the sustainability of reforms. It is a concerning failing to assume that one does not need to do a costing of the NHI in order to implement it, as affordability cuts to the core of the implementation potential of the policy. Radically overhauling the entire system is definitely a core policy issue, which needs to be considered. The original NHI Cost projections were based on state care costs in 2010. That was inflated up to 2026. So, it is not a “thumb suck”, as the Minister has previously stated, it is what state services will cost in 2026, irrespective of whether NHI gets implemented or not. So, South Africa will face this funding shortfall in state care by 2026. What the estimate failed to consider was the private sector spend, which equals the public sector spend, even though it covers a smaller portion of the population. One cannot, however, assume you can render services to the private scheme population without incurring any additional spend, no matter how you structure the system. The quoted Irish example is painfully relevant to SA, and the same costing and scrapping exercise should be happening here. Instead, we keep denying that we should do a costing and carrying on with planning. NHI is purely a political ideology which cannot be practically implemented. If one approves the NHI Bill, the project is set in motion, without any idea of future costs. That is a failure in due diligence. There will be massive costs in setting up the administration of the NHI Fund in offices and staff costs, which South Africans will have to fund, irrespective of whether NHI is ever fully rolled out or not. The NHI fund will be a state payment body, twice the financial size of Eskom. The three state bodies currently fulfilling a similar role to the NHI Fund (i.e. disseminating government funds to the population in one form or another) are SASSA, the RAF and the Compensation Fund. All three are in a dire financial and administrative state and assuming that the NHI fund will be any different is obtuse thinking. If we can do a costing exercise now and realise that NHI in its current format is unaffordable, we can start looking at alternatives. But there is a lack of political will to do this. South Africa has 8.8 million medical scheme beneficiaries who currently pay for their own healthcare at minimal expense to the state, and 5.7 million taxpayers. NHI wishes to have healthcare for everyone funded by 5.7 million taxpayers, including healthcare of the 8.8 million people currently self-funding. If one takes state employer subsidies and tax credits out of the equation, South Africa would have to raise an additional R105 billion in taxes annually to replace the voluntary private spend which is currently the norm. The Minister’s indication that private prices are inflated, was the reason for the establishment of the Health Market Inquiry. The one glaring absence in their interim HMI report, was an indication that private healthcare is costly due to provider tariffs being too high. Utilisation is driving costs, because the population is getting sicker and older. The medical scheme population grew by 0.67% in the last three years and the number of pensioners by 14.4%. South Africa therefore faces a utilisation crisis and a different systems design is not going to reduce the costs of the private sector by 30%. If services are purchased from the private sector at rates that are not reflective of the costs of running the system, the system will not continue to function. While doctors can work longer hours to cover costs when seeing patients at lower rates, this saving is limited by the available hours and reflects the assumption that private doctors are not already working very long hours and close to full capacity. Countries with single payer UHC models all have large tax bases and co-payments (along, of course, with massive waiting times for service). The research provided by DoH does not explain why South Africa decided on a single payer model. What does explain it, is current testimony in front of the Zondo Commission. Did we create a healthcare funding model to ensure easy central access to the contained funding for politically connected individuals, who were busy expanding a business empire into healthcare? We need a South African solution for a uniquely South African problem, which includes a much more pragmatic approach and recognition that the administration expertise that would be required by an NHI Fund does not exist in government. The shining ray of hope at this stage, is the announcements by the Finance Minister, who is painfully clear in admitting that there are no public funds for any large projects, including NHI. South Africa needs to increase the size of medical schemes by making membership mandatory for employed individuals. If SA can mandate minimum wage, medical scheme membership should follow the same route. Increasing voluntary health spend in the private sector, will reduce the burden on the public sector, creating an opportunity to improve quality. It will also reduce the costs of private healthcare premiums by 20%. The reasons given for NHI? To reduce costs in the private sector and improve quality in the public sector. This explains the lack of political will to fix the current system, because a repaired system will negate the need for NHI, which is purely a political ideology and not a pragmatic attempt to address the issues in SA Healthcare. Dr Johann Serfontein is a Healthcare Consultant and published novelist, under the pseudonym Jean Cerfontaine
Created at 2019/03/11 09:35 AM by Mediclinic
Last modified at 2019/03/11 09:35 AM by Mediclinic