South Africa rolls out pilot health insurance scheme

Abstract

April marks the start of the testing phase for South Africa's ambitious National Health Insurance scheme, with pilot projects launching in all provinces. Adele Baleta reports from Cape Town.South Africa's planned re-engineering of its health system through a multi-billion dollar national insurance scheme will be put to the test with the rolling out of pilot projects in ten districts.The launch of the pilots on April 1, will be the start of what Health Minister Aaron Motsoaledi calls a crucial 5 years in which the management, staffing, infrastructure, and equipment at public health facilities would be overhauled and a National Health Insurance (NHI) fund set up. The entire roll-out will be phased in over 14 years.South Africa is regarded by analysts as having one of the world's most iniquitous health systems, where high quality but expensive health care is slanted towards the private sector. More than 80% of South Africans cannot afford private medical insurance and rely on poor quality public hospitals and facilities. The state argues this is unsustainable and unfair, but has also been blamed for the demise of public health.The proposals aim to close the gap between public health care and expensive private care and provide universal health coverage at a cost of 255 billion rand (US$33 billion) by 2025 or from 2·2% to 6·2% of GDP.Pilot programmes will run in all of South Africa's nine provinces with two programmes in KwaZulu-Natal. They will test the feasibility and scalability of proposals which focus on primary health care, health promotion, and preventive care.The NHI proposals contained in the government's green paper have come under heavy scrutiny for being scanty on the detail of how the system will be implemented. The Health Ministry's NHI technical adviser Aquina Thulare has fired back saying that the green paper is one part of the legislative process, which will be followed by a more detailed white paper in the next few months.The scheme is expected to make provision for a government-managed central purchaser of health-care services. Only state-accredited health-care providers will be allowed to contract their service to the NHI, which will pool funds from three sources: a surcharge on taxable income, payroll taxes for employees and employers, and an increase in value added tax. Taxes will be mandatory but the option to belong to private medical aid remains.The government has planned for an additional 145 billion rand ($19 billion) in funding for the implementation of the scheme over the 14 years, but Alex van den Heever of the University of Witwatersrand's school of public and development management says financing the NHI is the least of the health system's problem. It is how the money is spent. “We have seen a decline in health outcomes and performance during 2000s, despite massive budget increases. Lack of governance and accountability and corruption has led to several provinces going into chronic budget deficits. I can't see that the response to this is that we are not buying services from national level of government. There is not one word about fighting corruption now and dealing with it in the future.”He slammed proposals to run academic hospitals from the national tier. “This is insane. This is not health insurance, it's just public sector restructuring.” Hospital group commentators agree saying that government should follow international practice and allow boards and not the national department to run public hospitals. Government has acknowledged that building of services and dealing with mismanagement in state health facilities is key to the success of the NHI.Thulare admits that there is “deep-rooted” corruption in the services but that the private service is not immune. The placing of two failing provincial health departments under central government control and administration was proof of government's intention to deal with corruption, she said.She says the NHI is not only about insurance. It was about making sure that government builds on the three legs needed for universal coverage as outlined in 2010 guidelines by WHO. “We must give all people access to needed health services, we need to transform the service delivery platform to give quality and affordable care and we need to provide financial risk protection to shield the population, especially households, from catastrophic health expenditure. A critical part is that risk pooling and pre-payment needs to be done otherwise we will not succeed”, said Thulare.Motsoaledi has said that the country needs to triple its number of doctors for the NHI to work. About 60% of doctors work in the private sector and for the past 10 years medical schools have only produced 1200 doctors each year. The ministry is funding new medical schools and hoping to increase the number of doctors to 3600 a year. April marks the start of the testing phase for South Africa's ambitious National Health Insurance scheme, with pilot projects launching in all provinces. Adele Baleta reports from Cape Town. South Africa's planned re-engineering of its health system through a multi-billion dollar national insurance scheme will be put to the test with the rolling out of pilot projects in ten districts. The launch of the pilots on April 1, will be the start of what Health Minister Aaron Motsoaledi calls a crucial 5 years in which the management, staffing, infrastructure, and equipment at public health facilities would be overhauled and a National Health Insurance (NHI) fund set up. The entire roll-out will be phased in over 14 years. South Africa is regarded by analysts as having one of the world's most iniquitous health systems, where high quality but expensive health care is slanted towards the private sector. More than 80% of South Africans cannot afford private medical insurance and rely on poor quality public hospitals and facilities. The state argues this is unsustainable and unfair, but has also been blamed for the demise of public health. The proposals aim to close the gap between public health care and expensive private care and provide universal health coverage at a cost of 255 billion rand (US$33 billion) by 2025 or from 2·2% to 6·2% of GDP. Pilot programmes will run in all of South Africa's nine provinces with two programmes in KwaZulu-Natal. They will test the feasibility and scalability of proposals which focus on primary health care, health promotion, and preventive care. The NHI proposals contained in the government's green paper have come under heavy scrutiny for being scanty on the detail of how the system will be implemented. The Health Ministry's NHI technical adviser Aquina Thulare has fired back saying that the green paper is one part of the legislative process, which will be followed by a more detailed white paper in the next few months. The scheme is expected to make provision for a government-managed central purchaser of health-care services. Only state-accredited health-care providers will be allowed to contract their service to the NHI, which will pool funds from three sources: a surcharge on taxable income, payroll taxes for employees and employers, and an increase in value added tax. Taxes will be mandatory but the option to belong to private medical aid remains. The government has planned for an additional 145 billion rand ($19 billion) in funding for the implementation of the scheme over the 14 years, but Alex van den Heever of the University of Witwatersrand's school of public and development management says financing the NHI is the least of the health system's problem. It is how the money is spent. “We have seen a decline in health outcomes and performance during 2000s, despite massive budget increases. Lack of governance and accountability and corruption has led to several provinces going into chronic budget deficits. I can't see that the response to this is that we are not buying services from national level of government. There is not one word about fighting corruption now and dealing with it in the future.” He slammed proposals to run academic hospitals from the national tier. “This is insane. This is not health insurance, it's just public sector restructuring.” Hospital group commentators agree saying that government should follow international practice and allow boards and not the national department to run public hospitals. Government has acknowledged that building of services and dealing with mismanagement in state health facilities is key to the success of the NHI. Thulare admits that there is “deep-rooted” corruption in the services but that the private service is not immune. The placing of two failing provincial health departments under central government control and administration was proof of government's intention to deal with corruption, she said. She says the NHI is not only about insurance. It was about making sure that government builds on the three legs needed for universal coverage as outlined in 2010 guidelines by WHO. “We must give all people access to needed health services, we need to transform the service delivery platform to give quality and affordable care and we need to provide financial risk protection to shield the population, especially households, from catastrophic health expenditure. A critical part is that risk pooling and pre-payment needs to be done otherwise we will not succeed”, said Thulare. Motsoaledi has said that the country needs to triple its number of doctors for the NHI to work. About 60% of doctors work in the private sector and for the past 10 years medical schools have only produced 1200 doctors each year. The ministry is funding new medical schools and hoping to increase the number of doctors to 3600 a year.