A short trip down memory lane tells us that when the 1st draft of the Demarcation Regulations (DR) was published in 2012 it effectively banned gap cover products outright – even though gap cover products had already been in existence for around two decades. National Treasury was overwhelmed – several hundred public submissions were received from a wide array of affected stakeholders criticising the draft.
Three more iterations of the draft regulations ensued over the following 4 years and finally the DR were passed in 2016, not only allowing gap cover but giving it quite a manageable and reasonable regulatory framework.
So, what does this have to do with National Health Insurance (NHI)? Well, actually quite a bit it would seem!
Rarely has any piece of proposed legislation brought about such frenzied commentary, espousing as vast an array of diverse views as the National Health Insurance (NHI) Bill released on August 8th this year.
One frequent critique of this bill is that there is much uncertainty about the various role players in this future NHI world and vagueness on how much of what it’s promising will be implemented. The Minister of Health established the NHI Advisory Committee 10 years ago and the dearth of technical policy work since then, especially on a proposal of such magnitude, should be deeply concerning to all citizens.
It’s likely that government is going to have its hands full in trying to get this NHI Bill passed in its current form. Civil society groups, medical schemes and the medical fraternity are deeply concerned on the damaging parts of the bill and appear resolute in lobbying government to amend the bill. Some lawyers are warning of legal action if amendments are not made!
NOT IF, BUT HOW?
No right-minded person would disagree that to attain full scale universal health coverage (UHC) is laudable. But it is obvious that the greatest divergence on policy amongst stakeholders is not on attaining UHC, but rather on ‘how’ UHC should be achieved and what is the best method for SA Inc.
It’s an irony that SA already does have UHC! Sadly though, endemic corruption has all but robbed the public healthcare sector of its ability to deliver on government’s constitutional obligation under section 27 of enabling the progressive realisation of access to healthcare. Comments last year by both the Auditor General and the Health Ombudsman have painted a bleak picture of the public health department, describing them as ‘in a crisis’ and ‘collapsing’.
Some unknown aspects of NHI are not so much unanswered, as they are unanswerable. As an example, everyone is guessing on what the NHI price tag is going to be. What benefits will it cover? How many possible structures were examined that could achieve UHC? The policy process has been silent on these vital matters.
So, let’s look at the impact of NHI on the private healthcare sector – given what we know thus far.
Expensive and wasteful – There is no doubt that the private sector in SA has a long track record, is well entrenched and offers world class medical care. Where it does fall short is that it is an expensive and sometimes wasteful system. And this is where government is taking the moral high ground in arguing that NHI should be a ‘complementary’ system, i.e. “We, the government, need to rescue the private sector from its own vices. Hence, we will take over the provision of healthcare for all SA citizens, including those who currently pay for their own private care”.
It is somewhat aggrieving though that these private sector vices were largely imposed by government – the Health Market Inquiry recently confirmed this. The cost increases that have afflicted the private health sector over the past 2 decades have been orchestrated to a greater degree by the unbalanced regulatory framework that was imposed upon it in 1998. The burden of the social solidarity principles of open enrolment, community rating, prescribed minimum benefits (PMB) and regulation 8 – in the absence of mandatory participation – have no doubt had a profound impact on costs.
So, the big question distressing the private sector is this – ‘Will NHI definitely be a complementary system?’
Or are we seeing what has become a common trend of policy contradictions in government proposals. Clause 8 of the bill states that patients can bypass the clinical referral pathways of NHI and then make use of their own providers and claim such bills from their ‘medical scheme insurance’.
Clause 33 simultaneously states that once NHI has been implemented, medical schemes will only be allowed to cover services not covered by NHI, i.e. a complementary system. And this is further complicated by a clause in the Medical Schemes Amendment Bill, published in June 2018, stating that the Registrar ‘may’ restrict medical schemes to only cover non-NHI services.
In the absence of clarification from government on the above, any proffered answers remain conjecture.
So, let’s have a look at the attributes of countries that have attained UHC. Out of 193 countries comprising the United Nations, 58 have built systems delivering UHC. But importantly for this analysis, many varied and differing systems were built in achieving the same desired outcome of UHC.
No developing economy has ever built a single-payer complementary NHI equivalent covering the entire population, let alone one that delivers a comprehensive set of medical services. Additionally, no other country has built comprehensive UHC that is 100% free at the point-of-service. User co-payments are necessary and common place in all national healthcare systems in order to manage consumer demand.
BUT IN SA INC POPULISM ABOUNDS
NHI promises not only comprehensive care but it is also 100% free at the point-of-service.
WHAT DOES ALL OF THIS TELL US?
It tells us one universal truth about government policies the world over. Economic performance controls governments – not the other way around. Bill Clinton understood this most poignantly in his 1992 US presidential campaign – he effectively deployed on the American constituency the catch phrase, “It’s the economy stupid”.
Given where SA is right now economically, there is little chance that the NHI will be able to receive significant government funding! GDP growth is at 0.6%, tax collections are down, the budget deficit at 6.3% with government debt at 60% of GDP – and mounting faster than National Treasury can count the number of SOE bailouts it has provided.
Even if the remote chance of additional taxes on a narrow and stressed tax base comes about, the extra funds will almost certainly be deployed to more urgent fiscal needs in order to save the country from the possibility of an IMF bailout – something which government wants to avoid at virtually all costs.
None of this points to SA being in a position anytime soon to build NHI. Once economic realities come to the fore, it will be realised that a willing and able, voluntarily financed private healthcare sector, covering 9 million citizens, is a national asset contributing to, rather than impeding, attainment of UHC.
Once one looks past the rhetoric of government’s NHI promises, the only conclusion possible is that the private healthcare sector is not going to disappear or change materially anytime soon!
Michael Settas, Independent Strategic & Technical Healthcare Advisor
This article was first published on Cover on 04 December 2019
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