EIGHT years and two policy papers following a resolution by the African National Congress (ANC) to implement National Health Insurance, there are still yawning gaps in the government’s plans to provide universal health coverage.
The scheme has long been on the government’s agenda, but came to the political fore only after the ANC’s 2007 elective conference in Polokwane.
Health Minister Aaron Motsoaledi has been under political pressure to deliver on this promise since he assumed office in 2009, and in August 2011, published a broad outline of the government’s plans in a green paper. Since then, he has maintained that more details would be forthcoming in a white paper and accompanying discussion document on financing options from the Treasury.
But the white paper, released for public comment on Friday, continues in the same vein as the green paper. It sketches a grand vision of a public health system that within 14 years will provide services free at the point of delivery, but it fails to nail down the specifics of benefits, the mechanisms the state will use to purchase healthcare services from providers, what it will cost, and how it will be paid for.
The government is proposing a sharp curtailment of medical scheme benefits, limiting them to a "top-up" to the benefits provided by National Health Insurance. This is sure to alarm consumers and the industry, and is almost certain to face legal challenge.
Dr Motsoaledi lamented the high cost of services and the co-payments medical scheme members face. He spoke about patients allegedly billed large amounts for simple procedures.
His argument seemed to be that National Health Insurance would solve this by doing away with the need for medical schemes.
Yet he ignored the elephant in the room: a more effective way to protect consumers would be to amend the Medical Schemes Act to tighten oversight of the sector and improve governance of medical schemes ripe for plunder.
His hostility to the private healthcare sector, listed hospital groups in particular, is more curious considering the white paper envisages purchasing services from public and private sector providers including hospitals.
His department has kept the white paper secret, without a leak in all 40 of its iterations. It is not clear how it incorporated the comments it received when the green paper was published, nor has it explained why the Treasury’s financing paper was incorporated into a chapter in the white paper and not published in its entirety.
The funding requirements in the white paper appear to be a slight modification of those in the green paper and fail to take account of SA’s current economic conditions. Both papers assumed that SA’s economy would grow at 3.5% per annum — a rate last attained in 2011.
Last year, the economy grew at just 1.5%, with a similar figure predicted for this year.
While the white paper contends costs are hard to gauge, it says costs in 2025 will be R256bn in 2010 terms. This assumes expenditure will grow by 6.7% a year and the economy by 3.5% a year. The green paper estimated health insurance costs at R225bn in 2025.
Depending on how much the baseline health budget increases by, this would create a funding shortfall of between R28bn (if the baseline health budget increases by 5%), R71.9bn (if it rises 3.5%) and R108bn (if it increases 2%).
The paper suggests three sources of tax revenue to fund this shortfall: a surcharge on taxable income, a payroll tax, and increasing VAT, and suggests combinations of how these taxes could be instituted.
The white paper envisages a central National Health Insurance fund that will pay for services delivered at district level, raising a politically sensitive question about the future role of the provincial health departments, which receive the lion’s share of the health budget because they deliver most public health services.
It appears the provinces have yet to be consulted, since rather than spelling out how the inter-governmental funding arrangements will be modified, the paper says major changes are likely. Establishing the fund will be relatively simple, but shifting responsibilities and funds from provinces will be anything but easy.
Much more work needs to be done before enabling legislation is drafted. As Dr Motsoaledi put it, it will be a marathon, not a sprint.
GO-TO MAN: Health Minister Aaron Motsoaledi needs to come to the aid of the pharmaceuticals industry by making an extraordinary price adjustment for private sector medicines, the industry says. Picture: SUNDAY TIMES
EIGHT years and two policy papers following a resolution by the African National Congress (ANC) to implement National Health Insurance, there are still yawning gaps in the government’s plans to provide universal health coverage.
The scheme has long been on the government’s agenda, but came to the political fore only after the ANC’s 2007 elective conference in Polokwane.
Health Minister Aaron Motsoaledi has been under political pressure to deliver on this promise since he assumed office in 2009, and in August 2011, published a broad outline of the government’s plans in a green paper. Since then, he has maintained that more details would be forthcoming in a white paper and accompanying discussion document on financing options from the Treasury.
But the white paper, released for public comment on Friday, continues in the same vein as the green paper. It sketches a grand vision of a public health system that within 14 years will provide services free at the point of delivery, but it fails to nail down the specifics of benefits, the mechanisms the state will use to purchase healthcare services from providers, what it will cost, and how it will be paid for.
The government is proposing a sharp curtailment of medical scheme benefits, limiting them to a "top-up" to the benefits provided by National Health Insurance. This is sure to alarm consumers and the industry, and is almost certain to face legal challenge.
Dr Motsoaledi lamented the high cost of services and the co-payments medical scheme members face. He spoke about patients allegedly billed large amounts for simple procedures.
His argument seemed to be that National Health Insurance would solve this by doing away with the need for medical schemes.
Yet he ignored the elephant in the room: a more effective way to protect consumers would be to amend the Medical Schemes Act to tighten oversight of the sector and improve governance of medical schemes ripe for plunder.
His hostility to the private healthcare sector, listed hospital groups in particular, is more curious considering the white paper envisages purchasing services from public and private sector providers including hospitals.
His department has kept the white paper secret, without a leak in all 40 of its iterations. It is not clear how it incorporated the comments it received when the green paper was published, nor has it explained why the Treasury’s financing paper was incorporated into a chapter in the white paper and not published in its entirety.
The funding requirements in the white paper appear to be a slight modification of those in the green paper and fail to take account of SA’s current economic conditions. Both papers assumed that SA’s economy would grow at 3.5% per annum — a rate last attained in 2011.
Last year, the economy grew at just 1.5%, with a similar figure predicted for this year.
While the white paper contends costs are hard to gauge, it says costs in 2025 will be R256bn in 2010 terms. This assumes expenditure will grow by 6.7% a year and the economy by 3.5% a year. The green paper estimated health insurance costs at R225bn in 2025.
Depending on how much the baseline health budget increases by, this would create a funding shortfall of between R28bn (if the baseline health budget increases by 5%), R71.9bn (if it rises 3.5%) and R108bn (if it increases 2%).
The paper suggests three sources of tax revenue to fund this shortfall: a surcharge on taxable income, a payroll tax, and increasing VAT, and suggests combinations of how these taxes could be instituted.
The white paper envisages a central National Health Insurance fund that will pay for services delivered at district level, raising a politically sensitive question about the future role of the provincial health departments, which receive the lion’s share of the health budget because they deliver most public health services.
It appears the provinces have yet to be consulted, since rather than spelling out how the inter-governmental funding arrangements will be modified, the paper says major changes are likely. Establishing the fund will be relatively simple, but shifting responsibilities and funds from provinces will be anything but easy.
Much more work needs to be done before enabling legislation is drafted. As Dr Motsoaledi put it, it will be a marathon, not a sprint.
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