PHM-Exch> Will South Africa finally make progress towards a universal health system?

[Claudio Schuftan]

From: Global Health Check <oxfamblogs at gmail.com>


Global Health Check has posted a new item, 'Will South Africa finally make
progress towards a universal health system?'

South Africa has long faced considerable health system equity challenges.
In
particular, 43% of total health care expenditure is attributable to private
health insurance schemes, which only cover 16% of the population.  General
tax
funding allocated to the health sector also accounts for about 43% of
expenditure, and is used to provide services for most of the rest of the
population.  Out-of-pocket payments account for the remainder of
expenditure,
most of which relates to co-payments by private insurance scheme members but
also includes direct payments to private primary care providers by some of
those
not covered by private insurance.

The Minister of Health recently released a Green Paper on introducing a
National
Health Insurance (NHI).  It indicates that the NHI will be guided by the
principles of the right to health service access, social solidarity, equity,
affordability and the provision of appropriate and effective health
services.
It also states that the objective is to achieve universal coverage, where
everyone has financial protection from the potentially impoverishing costs
of
health care and access to needed health care.  Core elements of the proposed
NHI include:

       Substantially increasing the pool of public funds (previous
statements indicate
that this will take the form of tax funding including: increased allocations
to
the health sector from general tax revenue; a surcharge on personal income;
a
payroll tax on employers; and/or increased VAT);
       The creation of an independent public entity to pool these public
funds and use
them “to purchase health services on behalf of the entire population from
contracted public and private health care providers” on a single payer
basis;
       All South Africans, legal permanent residents and registered refugees
and
asylum seekers will be entitled to benefit from these services;
       A relatively comprehensive package of out- and in-patient services
will be
funded; and
       There would be no fees charged at the point of service.

The Green Paper recommends that the NHI be phased in over a period of about
15
years, divided into three five-year phases. The first phase will be devoted
to
rebuilding the public health system.  The capacity and quality of public
health
services declined dramatically during the late 1990s and early 2000s, when a
neo-liberal fiscal policy restricted government spending at precisely the
time
that the HIV epidemic was exploding, increasing the burden on public sector
services.  Specific interventions planned are: ‘re-engineering’ primary
care services, including the deployment of teams of community health workers
in
every ward; an audit of all public sector facilities and improvements in
physical infrastructure and ensuring all facilities have a full complement
of
functioning equipment; increased training of the full range of health care
workers; service quality improvement measures; and measures to improve
management in hospitals and health districts.   Other preparatory activities
such as establishing the NHI fund/independent public purchasing entity will
also
occur during this phase.

The second phase will focus on changing the way of paying health care
providers.  It is proposed that primary care services will be paid for on a
capitation basis while diagnosis-related groups (DRGs) will be used to pay
hospital services.  Strategic purchasing of services from both public and
private health sectors will also be initiated during this phase.  The final
phase will be devoted to further expanding health service capacity to
achieve
universal access.

While there has been a relatively muted response to the release of the Green
Paper, with many stakeholders adopting a ‘wait-and-see’ approach, there has
been sufficient public commentary to identify key areas of support and
concern.  The proposals have been praised for:

       Being based on universal coverage principles;
       Adopting a carefully phased approach;
       Focussing firmly on addressing the problems in the public health
sector first;
and
       Building a strong foundation of improved primary care services.

The major concerns expressed include:

       Although there appears to be a commitment to a single public pooling
and
purchasing entity, the Green Paper makes mention of also considering a
multi-payer option whereby private insurance schemes would act on behalf of
the
NHI, raising concerns about high administration costs, limiting income and
risk
cross-subsidies and less ability to cost-containment benefits of a
single-purchaser;
       Purchasing of services from the private sector may retain a two-tier
system as
wealthier groups live closer to private providers than the less well-off and
given the rapid increase in fee levels among private for-profit providers,
may
threaten the sustainability of the NHI; and
       Although it is proposed that there will be no fees at the point of
service, the
Green Paper also mentions having to consider co-payments, which would limit
the
financial protection afforded to beneficiaries.

There are clearly some contradictions within this policy document that need
to
be resolved.  It is also apparent that key stakeholders will use the period
before the finalisation of the policy to influence the NHI design to best
meet
their personal objectives.  While the release of the Green Paper is a
positive
development in efforts to move towards universal coverage in South Africa,
unwavering commitment to the core principles outlined in this policy
document is
required if the final NHI design is to be compatible with achieving these
principles.

Di McIntyre is the South African Research Chair in ‘Health and Wealth’ and a
Professor in the School of Public Health and Family Medicine at the
University
of Cape Town

To view the latest post or submit comments please visit
http://www.globalhealthcheck.org/?p=411


Anna Marriott
Email:amarriott at oxfam.org.uk
Twitter:@anna_marriott
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