Vision to 'transform SA's health system into a social institution'

The South African health system has undergone a number of transitions in the past two decades.
 
Speaking at the 14th annual conference of the Board of Healthcare Funders last August, then Deputy Health Minister Gwen Ramokgopa said that within the area of health financing, government has at various times intervened in the determination of mechanisms in which health services should be financed. "Under the leadership of President Nelson Mandela, government declared primary healthcare services free of charge, initially for children, people with disabilities and pregnant women, and later on for the entire population.

The introduction of the uniform patient fee schedule for public hospital services was intended to ensure that the population access health services in a rational manner but at the same time that mechanisms are in place to ensure that those who are not able to afford the stipulated fees are not denied access to the health services they require. "Similarly, for the private sector, interventions were introduced to strengthen overall private health insurance regulation in the form of the Medical Schemes Act in 1998.  The act brought into effect the key elements of community rating, open enrolment and prescribed minimum benefits," said Ramokgopa.

She conceded the department recognises the Medical Schemes Act needs amendment to address a number of new developments that have adversely impacted on the performance and growth of the medical schemes industry. Ramokgopa said the medical schemes industry possesses a number of innovative skills and abilities that can be drawn on to strengthen the performance of the health system. Some schemes are at the forefront of cutting-edge developments with regards to ICT innovations and have been able to yield benefits to members in the form of fraud detection and prevention.

Other schemes have developed benefit options that are linked to a member's lifestyle and consumption habits. "The Government Employees' Medical Scheme, a relatively new scheme in the industry, has also recorded some key successes in the areas of member enrolment and keeping costs down. These successes have been achieved as a result of the relationship that the scheme has with private partners, which provides a good learning platform of how best to draw on public and private resources for the benefit of the population."

"We must be proud that by working together, by leveraging evidence-based knowledge, by investing in innovative medical science and by strengthening the health institutions we have been able to also increase the life expectancy of South Africans to 60 years in 2012," said Ramokgopa. However, she added that with health as core to the sustainable development agenda, finding an appropriate balance between healthcare financing and access to health as a basic human right has become a high priority for many, if not all, nations globally. While the majority of South Africans rely on the public sector for their health needs, the sector is challenged by a shortage of key human resources for health such as pharmacists and specialists, and many people encounter long waiting times at health facilities, as well as poor management systems and processes.

This leaves people vulnerable to the risks of only presenting in advanced disease or to catastrophic health-related expenditures as they consider the private health sector as an alternative. "Despite having a relatively well-developed medical schemes industry with what is generally referred to as world-class private healthcare, many people who rely on the private sector for their health needs face similar problems from a different perspective. The cost escalation that characterises many services in the sector directly impacts on the ability of individuals and households to maintain their contributions to the medical scheme of their choice.

Moreover, the tendency for private sector costs to increase way above inflation is detrimental to the ability of people to afford the medical scheme contributions as well as for the sustainability of the national health system. In fact, it is not uncommon for many medical scheme members to be faced with the full costs of care simply because their benefits have been exhausted long before the end of the financial year. The consequence of this is people are expected to a wait until they are critically ill or meet a huge portion of their health costs out-of -pocket. This has been shown to be catastrophic in many contexts, with healthcare being continued in the already underfunded public health system as the only available alternative." She blamed the current health services delivery approach of also being fraught with serious shortcomings, such as a focus on hospital-based care with little emphasis on providing health promotion and prevention services.

"Instead, the focus is placed on rendering curative care at the higher levels of care where it is known that it is more costly to provide care than at the lower level. The strong for-profit focus in the private sector has led to a hospital-centric approach with inexorable commercialism, which undermines the provision of health as a public good. Because of the elasticity of demand and the public good characteristics of health, it is important to note that the eight percent of GDP in health has not only gone into direct healthcare but also into huge profit margins, especially by the private hospital sector, one of the most lucrative investment options in SA even during periods of economic downturn." Ramokgopa said the status quo cannot continue.

The government must take steps to redress the fragmentation in the health system depicted in the two-tier system of the public and private sectors, and to protect the right of the population to health promotion and care services regardless of which sector they use. "I trust our common vision as a nation is that we must transform our health system into a truly social institution, one that promotes social solidarity, risk pooling, efficiency, effectiveness and affordability. The National Health Insurance, as a universal health coverage system of SA, aims to achieve this vision.

We realise NHI is not a panacea for all the inadequacies that characterise the health system: we are certain once it is implemented it will act as a catalyst to achieving milestones." Ramokgopa also raised concerns in the medical insurance schemes industry that need to be addressed before the full roll-out of the NHI over the next decade. A number of products on the market create the impression that they are doing the business of a medical insurance scheme when they are a short-term insurance product. These need to be regulated either as a medical insurance scheme or a short-term insurance product.

The Department of Health is working with Treasury to finalise regulations that would provide clear guidance on the regulation of these products. Should the trend of high costs continue unabated, the pressure that threatens the sustainability of medical insurance to meet the comprehensive health needs of members will increase. It is difficult for consumers to select a medical scheme option and many medical scheme members have little understanding of the actual benefits that their selected scheme offers. The reported complaints related to the system of prescribed minimum benefits may also be an indication that between the scheme, provider and member there is no clear understanding of the benefits within each option.

Business Day, 19 June 2014