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NHI can make or break SA's healthcare system

It’s all about building our children’s healthcare future

Tuesday, 15 August 2023, National Health Insurance (NHI) has the potential to make or break South African healthcare, depending on the strength of its foundation. With the extensive world-class skills and experience in medical funding on offer within South Africa’s private sector, the Health Funders Association (HFA) asserts that the NHI will require working together to develop universal health coverage that will best serve society.

“Fundamentally, we all want the same thing – a functional, quality healthcare system that is within reach for all,” says Phumelele Makatini, chief executive officer of the HFA, a health cover industry body representing over 50% of lives covered by medical schemes.

“We share the government’s commitment to health, and although South Africa’s public expenditure on health exceeds the 15% Abuja target set by African Union countries, establishing an adequately resourced and sustainable universal health system is a complex challenge that even first-world countries grapple with.

“Only high-income countries have health systems that are predominantly funded by public funds. Elsewhere in the world, private funding contributes to achieving universal health coverage. In South Africa, where volumes are so much lower, our private health expenditure is well below that of most middle-income countries,” she says.  

Fulfilling an essential non-profit solidarity mandate

“During 2021, medical schemes collected R225 billion in membership contributions and paid out more than 91% of this for members’ medical treatment. This efficiency in private healthcare funding is fulfilling a non-profit social solidarity mandate to care for members' health on a large scale.

“This closely mirrors the aims envisaged by NHI, and the medical scheme industry can bring this experience and capacity to a collaborative effort to build the NHI we all want for our children and grandchildren. The cover currently provided by medical schemes has much in common with this social security framework as prescribed minimum benefits ensure members never run out of cover for in-hospital care, chronic conditions, or life-threatening emergencies,” Makatini points out.

A medical scheme member who is on a diabetes programme or who has asthma, for example, cannot run out of benefits for these conditions and any member who has an emergency is fully covered regardless of how much they have claimed. The availability of these benefits contributes to the fact that South Africans pay only 5% of all health expenses out of their own pockets. By comparison, upper-middle-income countries pay 31%, according to World Bank data.

Expanding access to quality healthcare

Medical schemes contract with designated service providers to protect members from out-of-pocket payments, and the treatment pathways are also broadly similar to what is being proposed under NHI. Considerable inroads have been made in establishing quality healthcare access, which will be further enabled with the long-awaited finalisation of a low-cost benefit option framework.

Statistics South Africa’s General Household Survey of 2021 reports that roughly half of those surveyed belonging to a medical scheme live in households with a monthly income of less than R30 000, and the majority of respondents with healthcare cover surveyed were from previously disadvantaged groups. Members pay contributions from their income, which is partially refunded in tax rebates paid to the member – the medical schemes do not receive any such incentive.

“It has been indicated that the NHI will be implemented gradually in a phased approach. As we all know, healthcare access is not something a person can necessarily afford to wait years for. Even when the NHI is functional, it may be decades before it is equipped to offer the comprehensive quality care we would all want for our families.

“We fully support the need for universal health coverage and believe there is no time to lose in harnessing the extensive experience and expertise of public and private stakeholders so that we can contribute together to the design of the best possible version of NHI,” Makatini says.

“In the meantime, medical scheme members are relieving pressure on public health facilities through providing unlimited cover for chronic conditions and some 300 common health conditions in the private sector.”

Joint responsibility

“Health funders will continue to broaden and fine-tune healthcare access mechanisms for the benefit of more South Africans as far as possible within the regulatory parameters, thereby further easing the burden on the public health system. We are rolling up our sleeves and are ready to assist in improving healthcare for all.  This is why medical schemes are appealing to their regulator, the Council for Medical Schemes, to be able to offer primary care cover to lower income earners.”

Health Funders Association (HFA) members, including leading lights in the industry such as Bankmed, CAMAF Medical Scheme, Discovery Health Medical Scheme, Fedhealth, Glencore Medical Scheme, Momentum Medical Scheme, Profmed and PPS Healthcare Administrators, to mention but a few, are ready to work with government to develop evidence-based solutions that will help secure access to quality healthcare for all South Africans.

Until the NHI is fully implemented, Makatini points out that there is a joint responsibility to do everything possible to preserve the pockets of excellence in the public sector and find workable solutions to raise the level of healthcare generally to the standards of care that private healthcare funding has made possible.

“This fundamentally includes the need to protect and nurture our precious and increasingly scarce healthcare skills and resources. Implementing NHI will be a Herculean and potentially multigenerational task. Healthcare will be stronger if the internationally competitive healthcare financing systems we have in South Africa have the opportunity to contribute constructive strategic input now,” Makatini concludes.

About the Health Funders Association (HFA)

The Health Funders Association (HFA), which was established in 2015, is a non-profit organisation representing stakeholders involved in the funding of private healthcare in South Africa. The organisation at present represents some 73% of the country’s more prominent medical schemes and 50% of South Africa’s total medical scheme membership base.