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We can build NHI, and we should:  

Di McIntyre, emeritus professor, University of Cape Town : Ultimately, we will all pay into a central health fund according to our means, receive medical treatment according to our needs - and sleep better at night The writer believes that building a UHS in a phased and cautious manner, is just what is needed to restore our trust in institutions that should be serving in the public interest.

It was completely predictable that the minute the National Health Insurance (NHI) Bill saw the light of day, news headlines would again scream "It's unaffordable", "We don't have the capacity", and all the other myths and red herrings about NHI would once again be trotted out. For South Africans to be able to judge for themselves whether the proposed changes to the health system are desirable or not, it is not helpful to focus on these red herrings but rather to understand the what, why and how of the proposals.


What is the aim of the NHI reforms?

The aim is to build a universal health system (UHS), which is a system where all people can access the health services they need, where these services are of sufficient quality to be effective and where no-one is exposed to financial hardship because of using health services. SA is not alone in this mission; countries around the world are committed to developing UHSes. SA is very far from having a UHS (I prefer UHS, because the term NHI feeds into red herrings). In SA, we have a health system where a small minority have access to unsustainably excessive and expensive services while many don't have access to the most basic services. Twenty-five years since our first democratic elections, little has changed for the worst-off in our society. Indeed, inequalities in the health system and in many other sectors have increased. We haven't begun to meet the constitutional rights of everyone to have access to health services. We cannot continue to accept the status quo, and this is why we have to move towards a UHS. Now for the how. International experience highlights that there are two fundamental requirements for achieving a UHS.

First, an integrated pool of funds is needed. A UHS is built on the principle of social solidarity where everyone pays into the funding pool based on their ability to pay, and everyone benefits from services funded from this pool based on their need for health services. Having fragmented funding pools serving different socioeconomic groups will not achieve this. Which is why the proposed NHI will involve gradually growing the pool of public funds that can be used to buy health services for all South Africans. Second, it is necessary to actively purchase health services with these funds.

The primary function of the proposed NHI Fund (NHIF) is to be an active purchaser (sometimes called a "strategic purchaser"). Importantly, services will be purchased from both public and private sector providers. To meet the health-care needs of the entire population, the human and other resources in both health sectors must be drawn on. The NHIF will establish contracts or service-level agreements with providers, explicitly outlining expectations about the range, quantity and quality of services to be provided. Providers will be required to submit information that will allow monitoring of their performance. The way in which providers are paid will also change, moving away from the current "fee for service" payment system in the private sector and the budget system in the public sector, neither of which provides incentives for the efficient provision of quality health services. Improved transparency and accountability at all levels of the health system will be essential, from holding the NHIF to account for the use of public funds and the extent to which they meet the health needs of South Africans, to holding managers of health facilities to account for the performance of their staff and the quality of services they provide. At present, public sector hospital managers have very little power to make and implement decisions; in most cases, they can only submit a request to provincial-level officials who make all the key decisions. So, to be able to hold public sector facility managers accountable, management authority must be delegated to the facility level, accompanied by mechanisms to ensure good governance.

The naysayers will be shouting "It can't be done", but all of these reforms can be implemented. We have the necessary skills and capacity in SA, and the NHIF staff will undoubtedly include professionals with vast experience of public sector change management and those from the medical schemes environment. It is important to note that the NHIF will not be a massive bureaucracy and actually will have relatively low administration costs. The way in which providers are paid will not require the massive claims departments that exist in medical schemes. Instead of millions of people submitting individual claims for every service they use, which can include many individual "fee for service" lines, hospitals will submit a single bill at the end of the month listing all the patients served and the relevant diagnosis codes, and they will be paid a fixed fee per "diagnosis-related group". Primary care providers will be paid a lump sum based on the number of people registered to receive services at their facility (called capitation payments). An integrated IT system will be established between providers and the NHIF to ensure speedy payment of providers, and as a risk management (fraud detection) tool. Those screaming the loudest against the proposed NHI are often seeking to protect their own interests or privileged position. The move to a UHS will result in major health system changes, which undoubtedly will be uncomfortable for some, but the most important change required is a mindset change, particularly among the most privileged in society.

Buying into social solidarity so that everyone can get the health care they need may not be everyone's cup of tea, but many will sleep better knowing that there will be a helping hand for every person when they are ill and at their most vulnerable. For UHS to be affordable, and to make the best use of the limited number of health professionals we have, health services should be provided by the least skilled health worker capable of providing that service. Why should a gynaecologist be doing Pap smears when a nurse is perfectly capable of doing them? The elite may balk at the thought of being served by a pharmacist assistant rather than a pharmacist, but they don't realise they probably already are being dispensed their medicines by an assistant in their local private pharmacy. Again, for reasons of affordability and efficiency, everyone will have to start at the primary care level and follow the referral route. The elite may be upset that they can't go directly to a specialist for every minor complaint, but specialists are likely to find their work more fulfilling if they are seeing patients who really need their expertise. When fully phased in, the NHI will require us to pay more tax, but for those who are medical scheme members, the additional tax will be far less than their current medical scheme contributions

When fully phased in, the NHI will require us to pay more tax, but for those who are medical scheme members, the additional tax will be far less than their current medical scheme contributions. Many scheme members are finding contributions, which continue to increase annually at levels far exceeding the consumer price index, unaffordable and will be only too happy to have to pay less for a health system that benefits everyone. This will bring SA in line with the international norm of private voluntary health insurance being a relatively small component of health sector funding, and playing a largely complementary role to a UHS. South Africans are justifiably angry about the wasted years of state capture, with the plundering of public funds that could have been used to strengthen public health services, build early childhood development programmes and provide quality schooling and many other critically needed social services. We don't trust our governance structures and fear introducing reforms that will rely on good governance.

It is a great sadness that it will take quite a long time to reach our UHS dream given the government debt we now face. Nevertheless, building a UHS in a phased and cautious manner, while constantly remaining vigilant and learning from the lessons of how the state was allowed to be captured, and demonstrating how quality health care can be efficiently provided for all South Africans, is just what is needed to restore our trust in institutions that should be serving in the public interest.

• McIntyre is an emeritus professor of the Health Economics Unit at the University of Cape Town and executive director of the International Health Economics Association