2020 – A healthcare upturn unlikely

2019 brought with it a host of healthcare policy decisions, which aimed to stabilise the South African healthcare sector, promoting sustainability. The Health Market Inquiry report was the gem of these, with well-researched, evidence-based proposals to promote sustainability in the private sector, by improving competition and market forces. If properly implemented, it would go a long way to solving many of the private healthcare sector problems. The big concern is that the same government who was lambasted in the report for failing to regulate the private industry, will be called upon to implement the regulatory changes required to make the system work. Certain changes, such as the establishment of a Supply Side Regulator for Health, would be massively onerous, even with competent individuals driving the process. If the same officials who have failed to regulate the sector is called upon to implement the findings, it will simply not be done.

The Presidential Health Compact was signed with much fanfare in June 2019, promising to be the panacea which will fix the public healthcare system in the run up to NHI. Strangely, many of the supposed recommendations were not based on findings of the Lancet Commission report on quality of public healthcare. This was the baseline report on which the Compact was based. There is thus large variation from being evidence based, to promoting a specific dogmatic view, similar to the case of NHI policy. Three pages of rhetoric about the iniquitous distribution of healthcare funding completely ignores the fact that a lack of public healthcare funding is not listed in the Lancet report as a systemic problem. As with the HMI recommendations, the same healthcare managers who have failed to run hospitals and clinics efficiently and effectively will be called upon the implement this extensive set of measures to turn around their facilities. It is noteworthy that these same officials who have overseen failure in their facilities for decades, will somehow be expected to manage a miraculous turn-around of years of decay, simply because some politicians signed a piece of paper saying they have to. A total lack of accountability led to the collapse of the public health system and there is no indication that labour unions will accept their members suddenly being subjected to accountability for their failures, by being replaced with competent managers. As public facilities will have to be of sufficient quality to contract with the NHI, the expected failure of the Health Compact will make implementation of the NHI impossible.

The National Health Insurance Bill is steadily being steamrolled though the parliamentary process, with little regard being given for the large number of Constitutional-, Legal-, Operational- and Financial concerns raised by an industry which spent millions of Rand in consulting, research and legal fees to compile these opinions. Never in history has so many organisations invested such large quantities of resources to disprove the feasibility of a specific policy. While many of these organisations have vested interests in seeing the private sector remaining an independent service delivery organism, the concerns raised are perfectly valid and evidence based. Failure to respond to these concerns in the parliamentary process, will most likely lead to a successful challenge in court on procedural grounds, even before the various technicalities of the Act will be challenged, up to a Constitutional Court level. Once the Act is in place, court challenges can start. The fact that the so called NHI Money Bill is still outstanding is a problem in itself, as it is impossible to comment on an NHI Bill when there is no clarity on how it will be funded. With 816 000 South Africans (1.4% of the population) paying 68% of Personal Income tax, the alienation of this group of tax payers creates a very real danger of the tax shortfall progressively increasing. If 50 000 of this group of taxpayers leave South Africa due to potential impingement of their healthcare access, it leaves a R100 billion tax gap which government ostensibly cannot fill in the current economic climate. Added to this, if 40% of healthcare professionals leave, as a recent SAMA survey indicated, it will add to both the tax and a human resource problem in healthcare. South African simply cannot afford the proposed NHI, and a Money Bill would have illustrated that. Government is simply choosing to ignore that fact.

The Council for Medical Schemes have firmly nailed their colours to the mast, taking it upon themselves to stop any private sector changes which would make the system more affordable or sustainable, rather focusing their limited resources on doing NHI related work.  This approach is often contrarian to what the private sector needs right now. Scrapping of Health Insurance product exemptions and no longer investing effort in development of Low Cost Benefit Options are prime examples. The PMB review process has morphed into one developing a primary care (PHC) basket for NHI, and it remains to be seen whether this PHC package will be added to current PMBs (which would probably make schemes even more expensive), or whether it will simply replace the current PMBs. Some of the recent CMS communications raise red flags about the PHC package and scheme members should be very concerned that current PMB cover, which covers many expensive disease and surgery, might simply be replaced by a primary care product. This will remove coverage of these expensive diseases from the legal mandate of schemes and replace it with expensive disease cover based purely on the goodwill of medical schemes.

The solution for the industry is that the South African government will need to move away from populist policies in healthcare, and start taking heed of the various pragmatic alternatives being put forth to improve the system. Alternatives based on evidence and research, and not narrow minded dogmatic thinking. It is unlikely that the government will do this in 2020 and our hopes would therefore have to rest on legal challenges of the NHI Act. The biggest problem is that the narrow-minded focus on NHI has put a stop to any and all pragmatic solutions which can be implemented in the interim to help the healthcare system function more efficiently. The status quo is not acceptable, but NHI is not the solution.

 Dr Johann Serfontein is healthcare consultant and member of the Free Market Foundation Health Policy Unit. He is a published novelist under the Pseudonym, Jean Cerfontaine.

This article was first published on Med Brief Africa on 8 January 2020

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