Issue #1 | July 2011

FrankTalk

In this issue

1 Introducing FrankTalk

2 Why Health-Care?

3 A Case for Information and Engagement

5 Balancing the Scales – Justice and the National

Health Insurance Plan in South Africa

7 The National Health Insurance Debate

9 The Proposed National Health Insurance

Scheme and its Potential Impact on All

Sectors of Society

11 The NHI will Struggle without Private

Health-Care Sector Reform

13 A Revolution in Health-Care

15 Contributors

Issue #1 | July 2011

Pg 1 | Issue #1 | July 2011

elcome to the inaugural issue of the FrankTalk Journal, an initiative of the

Steve Biko Foundation. Named after the pseudonym under which Steve Biko wrote,

FrankTalk is a non-partisan platform designed to bring together South Africans from all walks of life to reflect collectively on the state of our democracy.

Going beyond the customary dialogue platform, FrankTalk challenges its participants to use their citizenship as agency. In this regard, the sessions speak to the challenge of advancing democracy by being active citizens, and finding harmony between our personal, political and professional identities.

Structurally, FrankTalk consists of three elements: a monthly dialogue session; an online platform and this journal. The FrankTalk Journal will be distributed monthly. It intends to be an intellectually engaging and interesting publication that is accessible to a wide range of readers.

In addition to contributions from recognised thought leaders, the Steve Biko Foundation (SBF) will also publish pieces from the public, creating an opportunity for individuals who would like to share their perspectives in greater length and depth.

Please visit the FrankTalk website in the coming weeks for a full publication schedule and for other opportunities to get involved. We welcome and await your feedback on any elements of this programme and your thoughts on its evolution. Until then, enjoy and share the legacy.

Nkosinathi Biko

Frank TalkINTRODUCING

WThe Steve Biko Foundation is

a community development organisation inspired by the legacy of Bantu Stephen Biko.

An examination of the leading South African institutions that have contributed to shaping

national discourse highlights the void that exists in promoting the

intangible aspects of development: identity, culture and values, the issues

that speak to the soul of a nation. The Foundation has sought to fill this gap since its inception. It will intensify its efforts to strengthen democracy by championing dialogue, scholarship and programmes on the relationship between identity, agency, citizenship and social action.

Its vision, mission and values find expression in a variety of areas. Broadly, each intervention is designed to advance policy, dialogue and advocacy; knowledge production and dissemination; and leadership development.

ABOUT The Steve Biko Foundation

“FrankTalk challenges its participants to use their

citizenship as agency.”

Nkosinathi Biko

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veryone in the country will be affected by the proposed National Health Insurance scheme. Our first issue of FrankTalk explores the proposed

NHI and highlights some of the related issues that ought to be considered as the nation dialogues.

In 1966, Steve Biko enrolled to pursue a medical degree at the University of Natal’s Black Section. These years as a medical student were to form a pivotal chapter in Biko’s life, with his time at the university serving as a backdrop to the creation of the South African Students Organisation and the formation of the Black Consciousness Movement. But his student activism was not without cost, as Biko was expelled from the university in 1972 – ostensibly because of a poor academic performance.

However, his friend Pityana observes, “While Biko did not qualify as a medical doctor, he became a doctor of the soul.” In his 30 years of life, Biko spoke to the challenges of communities and, with his colleagues, sought to develop concrete, innovative solutions to what ailed society. This is a tradition which we, at the Steve Biko Foundation, aim to uphold through our work at large and FrankTalk in particular.

As we considered what the focus of the inaugural issue ought to be, health-care seemed in many ways to be an obvious choice. While South Africa has made significant strides toward actualising the promises enshrined in its constitution, the challenges that continue to confront the nation are strikingly evident in the area of health-care. From the deaths of newborns in our hospitals and the inaccessibility of health-care facilities in many rural areas, to the high burden of disease experienced by much of our population and recent strikes in the sector, it is clear that measures need to be taken to create a more equitable and efficient health-care system.

Why

Health-Care?The latest proposal put forward by the government is to develop a National Health Insurance scheme; and as Minister Dr Aaron Motsoaledi has intimated, everyone in the country will be affected by it. So this first issue explores the proposed NHI and highlights some of the

related issues that ought to be considered as the nation dialogues.

With that said, the contents of this journal by no means offer a definitive “solution” to the challenges facing our health-care system; rather, they are meant to inspire constructive debate. So we invite you to continue the dialogue in the days and months to come through

FrankTalk online.

EBy Obenewa Amponsah

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&ast year, my father, Hotep Idris Galeta, a chronic asthmatic, started having difficulty breathing at home

around 6.30am. It had been a rough allergy season but he had managed. Paramedics

were called. They knew him, and he even had private mobile numbers for the local fire department. The attack got progressively worse. Ninety minutes and over 30 phone calls later, there were no paramedics and no more airtime. By 8.20am he was no longer conscious. Ten minutes later the paramedics arrived. He could not be revived. When I arrived, two or three cars worth of first responders were packing up. He died waiting.

Over the past eight years, our Health Department has released four publications addressing health-care access, quality or visions for the future – the most recent is three years old.[1] This is meagre at best, considering whispers of forthcoming movement towards national systemic reform. With government-commissioned research and policy frameworks already in place, availability of more recent data is not a tall order. It is about time.

Our minister in the presidency’s recently released Development Indicators Report highlights health as one of 10 “measures that assist in understanding the impact of various government policies and programmes on the country and its citizens.” [2] Of health indicators presented, data on health-care access and quality are absent. The availability of self-generated information for self-determined future policy, programming, strategic planning and directives for National Health is paramount.

Where is this information?Social cohesion is also one of these 10 development indicators. The section lists promoting citizen participation in both civil society and democratic processes as goals to strengthen “voice and accountability” – the indicator’s opening subcategory.

There are no metrics that speak to the impact of civil society on government accountability or its role in policy-making processes. Furthermore, there is no indication of how voices of the constituency speak –

A Case for Information Engagement

By Ghairunisa Galeta

and are heard – outside of the ballot box. The Health Ministry’s 2007 Policy

on Health-Care Quality proposes uniform quality assurance

mechanisms guided by district health officials at the facility level. Of five main principles to be applied in ensuring quality, improving quality and resolving quality problems, “a focus on user needs” is the first – listed as “central in

the planning and performance of any activity.”[3] The report

proposes varied mechanisms to gather what these needs are,

including regular Patient Satisfaction Surveys and a National Complaints

Procedure.

Where are these opportunities for input?

A collaborative, government-driven and multilateral engagement process is as important as country-specific indicators and analyses of Europe’s National Health Systems in our planning and policy-making journey.

Developing and implementing these platforms for stakeholder and community engagement are crucial first steps for creating a culture of trust in current practices and future reforms.

It took a while to reflect on my personal experience and to collect the following anecdotes from friends. While nowhere close to a comprehensive survey of health-care access experiences in this country – nor intended to be – they are real. These anecdotes are included here to reinforce at least two things.

First: One does not have to look far, or wide, to paint

L"One does not

have to look far, or wide, to paint a picture

of the disparate and disjointed scenarios and situations that

characterise our health-care system – public

and private ."

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a picture of the disparate and disjointed scenarios and situations that characterise our health-care system – public and private – nor does one have to fight folk to share their stories. Second: Engagement was a starting point for me, and should be for any movement towards any sustainable and appropriate health-care reforms in this country.

“After the accident … I passed out. The next thing I saw was one of the guys walking outside of the car. I crossed the road and lay down. The paramedics came. I heard them say ‘No one in this car survived. I’ve worked these things before.’ I tried to speak but I couldn’t. A woman found me and told the paramedics. They put us all in a van and they assumed we all belonged in a public hospital. No offence, but he didn’t ask us. Someone thought to ask us … they could’ve taken us to Union. I couldn’t speak and had to pull the guy’s pants [to get his attention]. I whispered and said I had medical aid, and that we all did – even though we didn’t. But I said we all had private and we could all go to Union. So we went there, they took care of us, our families came, we survived, and everything was cool.” 20-something male. 2003. Union Hospital.

“... I … was having a fling with this guy and he flew here and had malaria. I just took him to a doctor in Melville, paid cash [about R200] then had to take care of him for five days.” 30-something female. Year unknown. Private doctor.

“I had back surgery in 2009. A replacement disc, made of titanium and plastic, was inserted into my lower spine. A complex procedure, delicate. I was recovering in the Donald Gordon Medical Centre and was always surprised by the number of trainee nurses in attendance without supervision. It was late at night when two of these trainee nurses flipped me incorrectly. It almost undid my surgery and left me in serious pain. It wasn’t their fault, or mine, or the senior staff, or the surgeon. Blame remains unallocated. All I know is that I was afraid in that hospital, because medical negligence kills and I felt the weight of uncertainty in the people caring for me.” 20-something male. 2009. Donald Gordon Medical Centre.

“Although people have all sorts of tales to tell and woes about Jhb Gen – which is now Charlotte Maxeke – I know their neurosurgery is top notch. Need emergency brain surgery? That’s where you want to go. They have amazing care and the level of expertise [is] among the world’s finest. My husband had brain surgery there to clip a brain aneurysm.” 40-something female. 2007. Charlotte Maxeke.

“A friend’s grandma was lying in a ward where feral cats were walking about amongst the beds. Hospital officials’ response was that they did not know how to get rid of them.” 30-something male. Year unknown. Public hospital in Pietermaritzburg.

References

1.) (2008) Policy on Quality in Health Care for South Africa

(2007) Policy on Health Care Quality

(2004) Strategic Priorities for the National Health System

(2003) Primary Health Care Facilities Survey

Last accessed Jan 2011 via http://www.doh.gov.za/docs/policy/index.html

2.) (2010) Development Indicators Report. p.1.

Last accessed Jan 2011 via http://www.thepresidency.gov.za/pebble.

asp?relid=2876

3.) (2008). Department of Health. Policy on Quality in Health Care for South

Africa. p.20.

Pg 4 | Issue #1 | July 2011

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he end of apartheid in 1994 heralded a new era for South Africa. South Africans had high hopes

for a state where citizens were treated fairly and equally – based on a human rights ideology as opposed to the racially separatist ideology which dominated at the time of apartheid. Concepts such as justice, fairness and equality came to epitomise the optimism of the early post-apartheid era. The adoption of the South African Constitution in 1996 was viewed as a formative moment, entrenching these notions as cornerstone values of the New South Africa [1] (at least in theory).

Now, 17 years after democracy, questions continue as to the progress made. Do we really live in a country characterised by just, fair and equal treatment of (and opportunities extended to) all citizens? Or are these notions more entrenched in the platitudes of political oratory than the day-to-day lives of the populace? Have inequalities really been addressed and if so, in what tangible way? General consensus on the answers to the questions posed above is: “Yes, we have made some progress, but not nearly enough, and not nearly as significant as was originally anticipated.”

The proposed National Health Insurance (hereafter referred to as NHI) is a policy which is set to revolutionise health-care in South Africa. It has great potential to further the ends of justice, fairness and equality. When it comes to such policy measures, the NHI also seems by far the most ambitious, complicated and controversial undertaking to date.

This article briefly examines the NHI from the perspective of its potential to render South Africa a more just, equal and fair country. It also considers the pros and cons of the NHI from a justice perspective.

T Definitions

For the purposes of this paper, justice shall mean: “Fair and equitable distribution of resources amongst a population.” [2]

The National Health Insurance

Historically, comment on issues of health policy in South Africa has been prolific. Many organised groups

have developed and proposed strategies to address inequalities in access to health-

care, resource allocation and health status. The NHI is said to be an

all-encompassing framework which aims to integrate these proposals.[3]

This new policy is scheduled to be implemented over a roll-out period of 14 years, commencing in 2012.[4] It will be funded through an NHI tax payable by

those who earn a taxable income (registration with SARS an obvious

pre-requisite, thus overlooking the large, informal sector) as well as a

hike in VAT. Furthermore, tax rebates for medical contributions (currently valued at

between R10bn and R15bn per annum) will be phased out. Those who have the inclination – and the financial means – to do so may remain a member of a medical aid scheme. Payment for this, however, will be over and above the NHI tax.[4]

PositivitiesEnvisaged outcomes like universal access and health-care which is good value for money are laudable. Universal coverage entails “access to key, affordable, preventative, curative and rehabilitative health interventions for all”.[5] If all goes according to plan, the NHI will operate as a mechanism for redressing disparities and promoting justice, thus the initiative should be commended. From a public-health perspective the NHI promises a move towards preventative primary care as opposed to an

Balancing the Scales – Justice and the National Health Insurance plan

in South Africa

"Historically, comment

on issues of health policy in South Africa has been

prolific."

By Harriet Etheredge and Tejal Mistri Acknowledgement: Professor Ames Dhai

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emphasis on curative care. This will ultimately go some way towards the further realisation of justice as it could lead to a healthier overall population and redirection of resources from curative care.

There are, however, many opponents of the scheme and numerous objections regarding the very fundamentals of its structure – like financing and implementation.

Objections to, and criticisms of, the NHIInternationally, many countries, both developed and developing, have experience with implementing a programme for universal health insurance. Germany introduced such a policy in 1883. Today, this country is considered to exemplify a functioning, just NHI system – although it took 120 years to get to this point.[6]

In England, the National Health Service (hereafter referred to as NHS) was put into operation on 5 July 1948. To this day, the NHS is still facing functioning and process issues, with long waiting lists and limited access to some drugs.[7] South Africa has demonstrated a strong commitment to the NHI on paper. It is important, however, that this commitment does not remain “on paper” only. As was the case with the South African Revenue Service, the administrative structure of the NHI will need to be built from the ground up. The administration of the scheme will be responsible for overseeing all aspects of its implementation. This will take some time and staff will need extensive training.[8]

Unfortunately, South Africa’s administration also has a widely acknowledged tendency towards corruption.

Should those who are employed to administer the NHI exhibit this worrying trait – and many believe that this will be the case[9] – the ends of justice will not be served, as the coffers will remain relatively empty, in spite of a substantial cash inflow.[10]

Secondly, it could be argued that the implementation of the NHI will further increase disparities in health-care if the system does not function with the efficiency anticipated of it. The formal sector in South Africa (those who are registered to pay tax) is comprised of approximately 7 million people.[11] These are the people who will be further taxed to fund the NHI. This funding – as well as other cash inflows mentioned previously – will then be used to pay for the health-care of the other 41 million in the country who are not taxed.[12]

The limitations of such a plan are immediately obvious, and most notable amongst these is the fact that a much larger pool of resources will likely be required to provide good quality health services. This dependence on the wealthier sector of the population could have some other negative consequences for the entire country:

• The hike in taxes may prompt those who can afford it to emigrate to another country where the service is deemed superior, thus income for the NHI will be lost. • Doctors may accept jobs overseas which pay better and are not as administratively fraught as they would be under the NHI.

• Those who are wealthiest will likely be the only ones who are able to remain on medical aid. This does not seem just as it means that once again the very wealthy are in a position of privilege and enjoying superior services.

Conclusion

In theory, numerous positive outcomes are foreseen as the NHI is phased in, and these have been considered in this paper. However, there does not seem to be adequate public buy-in to the scheme or into the generosity of spirit which dictates it. This is evidenced by the numerous strong objections which have been raised. It is arguable that the South African government has not instilled within the general population the confidence to believe that this proposal can be implemented without corruption, mismanagement of funds and political meddling.

In order for justice to accompany the NHI, public buy-in is vital, as is an unambiguous and sincere reassurance that the most obvious pitfalls will be strongly guarded against.

References1. Democracy: The Constitution of South Africa. nd. South Africa Info (online). Available from: http://www.southafrica.info/about/democracy/constitution. htm [Accessed 10 January 2011].

2. Wallace, R. B. and Kohatsu, N. 2008. Public Health and Preventative Medicine (15e). MacGraw-Hill Professional (online). Available from: http:// books.google.co.za/books?id=5ACWr8YcB2AC&pg=PA35&lpg=PA35&dq =Justice:+Fair+and+equitable+distribution+of+health+care+resources+am ongst+a+population&source=bl&ots=GBo0cf0Fhn&sig=v6o3GpIxQVMmG GYJ-ipsRHHqkxg&hl=en&ei=IwbuTMHLCoaPswaRnvj6Cg&sa=X&oi=bo ok_result&ct=result&resnum=1&ved=0CBUQ6AEwAA#v=onepage&q&f=tr ue [Accessed: 21 October 2010].

3. Blaauw, D. and Gilson, L. 2001. Health and Poverty Reduction policies in South Africa. Centre for Health Policy, South Africa (online). Available from: http://web.wits.ac.za/NR/rdonlyres/77C69FE0-40FB-448B-AED7- C53FSDA3035C/0/b41.pdf. [Accessed: 9 November 2010].

4. Wasserman, H. 2010. How NHI will affect you. In Fin 24 [Online]. Available from: http://www.fin24.com/PersonalFinance/Money-Clinic/How-NHI-will- affect-you-20101011 [Accessed: 21 October 2010].

5. Shisana, O., Rehle, T., Louw, J., Zungo-Dirwayi, N., Dana, P. and Rispel, L. 2006. Public perceptions on National Health Insurance: Moving towards universal health coverage in South Africa. In The South African Medical Journal 96 (9) 814 – 818.

6. Altenstetter, C. 2002. Insights from Health Care in Germany. In The American Journal of Public Health 93 (1) 38 – 44.

7. National Health Service in the United Kingdom of Great Britain. 2010. The NHS is Born on July 5th (online). Available from: http://www.nhs.uk/NHSEngland/thenhs/nhshistory/Pages/NHShistory1948. aspx. [Accessed: 17 November 2010].

8. Abel-Smith, B. 1992. Health Insurance in developing countries: lessons from experience. In Health Policy and Planning 7 (3) 215 – 226.

9. Bateman, C. 2010. Izindaba: NHI Fund to be Vetted Along SARS Lines. In The South African Medical Journal 100 (12) 796 – 797 (online). Available from: http://www.samj.org.za/index.php/samj/article/ viewFile/4632/3022 [Accessed: 21 January 2011].

10. Bega, S. 2010. Experts attack NHI plan. In The Cape Argus October 02 2010 (online). Available from: http://uct-heu.s3.amazonaws.com/wp- content/uploads/2010/10/CapeArgus_021010.pdf [Accessed: 17 November 2010].

11. Futuse, B. 2007. SARS ready for SA Taxpayers. in Fin 24 (Online). Available from: http://www.fin24.com/Business/SARS-ready-for-SA- taxpayers-20070805 [Accessed: 19 November 2010].

12. The World Bank. 2008. Population Statistics (Online). Available from: http://www.google.com/publicdata?ds=wb-wdi&met=sp_pop_totl&idim=co

Pg 6 | Issue #1 | July 2011

believe it is important that as a society we debate the National Health Insurance scheme. To this end I would like to make two general points about the

debate as a whole and then three specific points about the NHI itself.

The first general point to make is that, to date, the debate around the NHI has broadly been characterised by the media as a fairly oppositional one, creating a sense that there are people who are against the NHI – whatever the NHI is – and those who are for. In my view, this is an unhelpful and polarised way to conceptualise the NHI. I think all stakeholders in our society, be they in the health sector or not, would acknowledge that the health-care system in this country is broken – and quite badly.

The public sector is badly broken and so is the private sector and there are many problems. I think we all need to acknowledge that we are not in good shape from the point of view of the health-care system, and that as citizens and stakeholders we have a lot of work to do. I think it is true that all stakeholders including the private sector, in which my organisation is an important player, are very strongly in support of reforming the health-care system, including various NHI models.

At this point it is important to note there is no such thing as “The NHI”. There are dozens of health-care systems around the world that are called National Health Insurance and not one of them is the same as any other one. They differ on how the government collects money, how people pay, how they organise the health-care system, and whether the delivery is public or private. I can talk to you for hours about different models and they are all called NHI. So there is no one NHI and there is no one piece of legislation that will

serve as a magic bullet and solve all our problems overnight. It is long, hard work and there are tough problems that we are facing.

These problems are partly inherited from the apartheid era – we have had to create a

health-care system out of the apartheid provinces and the bantustans and

try and put them together. We have a legacy of terrible illness and disease and we have inherited problems in the post-apartheid period to do with the structure, bureaucracy, corruption, a whole lot of other issues as well. In the private sector I think

we are facing our own problems.

They are not the same as in the public sector but they are equally

serious. They are to do with a shortage of doctors and quite powerful providers

– like hospital groups and others – which push up costs and so health-care in the private sector gets more expensive every year. In my opinion, saying that there are some who are for the NHI and some who are against is not helpful.

We need to get around the table and look at the detail of what particular solutions will address the particular problems of this country in an effective way and in an affordable way. In encountering this debate, I think it is quite helpful to try and break the issues down in a way that leads to constructive dialogue.

One set of issues is around the money, so we need to ask: how much money do we currently spend on health-care and how much should we be spending? And if we do need more, where should it come from? Then, when we have got our money together, we need to address another question: what is the best structure for a health-care system to deliver care to the people?

The National Health Insurance

DebateI

By Dr Jonathan Broomberg, Chief Executive Officer, Discovery Health

“There is no one NHI and there

is no one piece of legislation that

will serve as a magic bullet and solve all

our problems overnight . ”

Pg 7 | Issue #1 | July 2011

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Is it an insurance system which is somewhat implied in the ANC paper, a sort of giant medical aid for the whole country? Or is it a public system like you have in Britain where the government collects the money and the government owns the hospitals and employs the doctors and nurses? The UK has a brilliant public-health system but it is not an insurance system and so the question does arise around the structure: is a public system or an insurance system the right model for this country?

In regard to the financial aspect, South Africa already spends significantly more per capita in the public-health system – I am ignoring private now – than any other African country and most other developing countries at our stage of development. So we spend more than most of our peers but we have terrible results. We get terrible value for money – our mothers die much more frequently, and so do our babies.

I think to assume that we need to put in a lot more cash is a superficial analysis of the problem and throwing money at our health-care system won’t solve the problem. It’s as if you have a car whose engine is broken: taking it to the garage and pouring in petrol won’t make the car go, no matter how much petrol you give it – we have to fix the engine and the engine is about management of the hospitals in the public system – it is about getting enough doctors and nurses and it’s about motivating people and the culture of work so that there is compassion and care in the system.

There is a lot of talk about the attitude of nurses to patients in the public sector and yet the same nurse will go to a shift in the private hospital the same night and treat patients completely differently. What is the difference? I think it’s about the work environment, how people are managed, and how they are motivated.

We mustn’t assume we are short of money. If we do need to raise more money – and we may well need to – then it becomes a question about how much we can afford as a society. Remember that there is a small number of people paying tax in this country so to collect more money from them is to put a big tax burden on them. And what are we going to give up if we spend more on health? Are we taking it from education? From housing? From defence? I think these are all important aspects of the debate.

And then finally, on the structure side, is what I think is an important technical debate: I haven’t seen, in the published documents, a good argument for why an insurance mechanism is better than a public-sector mechanism. You could achieve quite a lot of the same through reforming the existing public sector.

Equally, you could achieve it through an insurance system – but we have to then set up a new insurance system as we don’t have an existing one. We do have a public sector today and so I think what we need, in the debate, is for those who are proposing an insurance model to explain to us why, in technical terms, that model would be better.

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he Actuarial Society of South Africa has formed an NHI task team as a component of its Health Care Committee. By way of background, the Actuarial Society is the professional

body of the actuarial profession in South Africa. It is a meeting point of actuaries, where we can do work together on industry specifi c issues and assist with matters in the broader public interest. That is where the focus on the NHI comes in, as part of the mission of the Actuarial Society is to harness the expertise of the actuarial profession to assist in public debate.

At the moment, one of the challenges in discussing the NHI is

talk about. We do not have a formal document from Government to be able to comment on and so while there has been a lot of debate and discussion, it is largely speculation on what this framework is going to look like.

From the point of view of the Actuarial Society it makes us quite cautious about addressing public forums like this because we certainly do not want to promote speculation and misconception; but at the same time, a topic as potentially far reaching as National Health Insurance in South Africa is important to the nation as a whole and worth discussing.

I must stress that the Actuarial Society does not see its role as being a stakeholder in the debate either for against NHI. I

am not sure that there is anyone who is against NHI

or is against getting better access to quality health care

to all South Africans – it is simply a question of doing it in

the AS views its role as acting as a technical resource to all stakeholders in this discussion in terms of providing as accurate as possible costing and assessing implications from a resource point of view

of the different scenarios that are being discussed. That way,

in terms of eligibility and so forth, rather than on debating the numbers themselves.

So while we are eagerly awaiting a more concrete formal proposal around the NHI, the Actuarial Society has been

developing a model for costing the scheme. The society is even going beyond the

development of the model to assess the wider implications of NHI in terms of

things like access to health services and other pertinent issues. Our view is that we can throw as much money as we like at the problem of inequitable health care, but if we do not have the facilities and human resources to deliver quality services to South Africans then all the money in the world is

our present work at the moment is focusing on developing a model

or a framework that can be used to test various scenarios.

I think that it is important when we look at an NHI framework to look at the different

components as well. People talk about NHI or SHI – but what does that mean? It really boils

down to the different aspects of structuring some kind of health-care provision for the population.

The aspects that we need to look at are things like eligibility:

Is it going to be the whole population? Is it going to be differentiated for people who are employed and contributing, as opposed to people who are perhaps earning either below the level to contribute to such an entity or is there going to be any kind of differentiation in that kind of eligibility? These are really the factors that distinguish National Health Insurance and Social Health Insurance, I suppose, but these terms are often used interchangeably.

The other issue is the pooling mechanism in terms of how are the funds put together and held. So either you have a separate entity – which is what seems to be what is on the

create a separate funding pool as we have with the Road Accident Fund or the Unemployment Insurance Fund. So

are sitting as a separate fund. If you look at something like the National Health Service in the United Kingdom, you will see there is not a separate entity funding that; it is funded by government funding.

And then of course there is the issue of the services themselves and how those are purchased.

T

By Ms Roseanne Da Silva, Convener, NHI Task Team of the Actuarial Society of South Africa.

"We can throw as much money as we like at the problem

of inequitable health-care, but ...

all the money in the world is not going to fix that problem."

By Roseanne Da Silva, Convener,NHI Task Team of the Actuarial Society of South Africa

The Proposed National Health Insurance Scheme and its Potential Impacton All Sectors of Society

Pg 9 | Issue #1 | July 2011

he Actuarial Society of South Africa has formed an NHI task team as a component of its Health-Care Committee. By way of background, the Actuarial Society is the

professional body of the actuarial profession in South Africa. It is a meeting point of actuaries, where we can do work together on industry specific issues and assist with matters in the broader public interest. That is where the focus on the NHI comes in, as part of the mission of the Actuarial Society is to harness the expertise of the actuarial profession to assist in public debate.

At the moment, one of the challenges in discussing the NHI is that it is very difficult to know what to talk about. We do not have a formal document from Government to be able to comment on and so while there has been a lot of debate and discussion, it is largely speculation on what this framework is going to look like.

From the point of view of the Actuarial Society it makes us quite cautious about addressing public forums like this because we certainly do not want to promote speculation and misconception; but at the same time, a topic as potentially

far reaching as National Health Insurance in South Africa is important to the nation as a whole and so is

obviously worth discussing.

I must stress that the Actuarial Society does not see its role as being a stakeholder in the debate either for against the NHI. I am not sure

that there is anyone who is against the NHI or is against

getting better access to quality health-care to

all South Africans – it is simply a question of doing it in a financially

responsible way. So the Actuarial Society views its role as acting as a technical resource to all stakeholders in this discussion in terms of providing as accurate

as possible costing and assessing implications from a resource point of view of the different scenarios that are being discussed. That way, the debate can focus on the issues in terms of ramifications, in terms of eligibility and so forth, rather than on debating the numbers themselves.

So while we are eagerly awaiting a more concrete formal proposal around the NHI, the Actuarial

Society has been developing a model for costing the scheme. The society is even

going beyond the development of the model to assess the wider implications of NHI in terms of things like access to health services and other pertinent issues. Our view is that we can throw as much money as we like at the problem of inequitable health-care, but if we do not have the facilities and human resources to deliver quality services to South Africans then all the money in the

world is not going to fix that problem. So our work at the moment is focusing

on developing a model or a framework that can be used to test various scenarios

around benefits, eligibility, funding and resource allocation.

I think that it is important when we look at an NHI framework to look at the different components as well. People talk about NHI or SHI – but what does that mean? It really boils down to the different aspects of structuring some kind of health-care provision for the population. The aspects that we need to look at are things like eligibility: who is going to be eligible for this cover that is defined? Is it going to be the whole population?

Is it going to be differentiated for people who are employed and contributing, as opposed to people who are perhaps earning either below the level to contribute to such an entity or is there going to be any kind of differentiation in that kind of eligibility? These are really the factors that distinguish National Health Insurance and Social Health Insurance, but these terms are often used interchangeably.

The other issue is the pooling mechanism in terms of how the funds are put together and held. So either you have a separate entity – which is what seems to be what is on the table, although, again, this has not been clarified – where you create a separate funding pool as we have with the Road Accident Fund or the Unemployment Insurance Fund.

T

Those funds are not sitting as part of the central fiscus, but are sitting as a separate fund. If you look at something like the National Health Service in the United Kingdom, you will see there is not a separate entity funding that; it is funded by government funding.

And then of course there is the issue of the services themselves and how those are purchased. Are they purchased through contracting with private sector service providers or are they purchased by actually employing or owning the resources and providing the services that way? Again, you can see the parallels in terms of different systems we see around the world. In the case of the National Health in the UK those doctors and resources are generally owned by the government and employed by the government but certainly in Asia you see models where there is actually contracting with the private sector. This then raises the question as to whether there is a role for the existing private sector in this whole structure or will NHI replace the existing private sector structure?

I think then just a final point for me to make is in terms of the funding itself – as to where the money comes from. It is the perennial issue with health-care: we tend to be dealing with a situation of unlimited demand – it is very rare that people will say that they are healthy enough. So people will always have a demand for health-care, yet there is a perception that people will be able to consume enough health-care services to meet that demand. It suggests that we are always going to be in the situation where we are trying to ration – that we have to make distribution decisions – about the allocation of finite resources to fund infinite demand. This structure is just one mechanism in which that can be done and it is important that we think broadly. Certainly I believe FrankTalk constituents can think innovatively around different structures that can be utilised to fund something from finite resources, bearing in mind the tax burden carried by a relatively small portion of the population.

Pg 10 | Issue #1 | July 2011

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By Mamosa Motjope and Dr Howard Manyonga

t is imperative that we ask ourselves what our health-care system should look like in 15 years’ time when discussing the NHI (National Health Insurance) plans. How should

the private sector coexist with the public sector and should the private sector be composed of three large groups owning about 84% of the private hospitals and only serving 16% of the South African population?

The common criticism of the private health sector is that it:

• caters for the wealthier minority and excludes the majority of South Africans from accessing health care

• is not easily accessible to people who reside in townships and rural areas

• the cost of private-sector health care is increasing and becoming unaffordable.

These challenges, along with public sector ineffi ciencies, are at the core of the current NHI discussions. These discussions aspire to give all South Africans their basic human right to quality health care and are also focused on designing mechanisms around the existing setup of the private and the public health systems, as per the ANC NHI discussion paper.

“The implementation of the national health insurance plan means transformation of the funding model for health as well as reorganisation of health-care delivery. Universal access to health services can only be achieved through a simultaneous and two-pronged approach. First, signifi cantly strengthen the public sector so that it becomes the provider of fi rst choice. Second, design mechanisms for ensuring that scarce and critical health service resources in both public and private sector are shared and optimally used by all to maximise social value.” [IS THIS A DIRECT QUOTE FROM THE PAPER? WE NEED TO REFERENCE THIS PROPERLY, I THINK – WHERE IT COMES FROM – I PRESUME THE PAPER – AND WHAT PAGE. I CAN’T FIND A COPY OF THE PAPER ONLINE, SO PERHAPS SOMEONE COULD CONTACT THE WRITER TO CHECK THIS?]

We want all South Africans to have access to quality and timely health-care services that are within a reasonable distance from their homes – hence the fi rst approach, of strengthening the public sector, is a non-negotiable and needs to occur at all levels of the public health system.

The second approach, of designing mechanisms to share resources between the private and public sector, does require thorough analysis of the challenges that can be posed by the current landscape of the private health-care sector.

The government could be faced with challenges such as:

• having to bargain with an oligopoly that is resistant to change and is understandably more concerned

about the impact on their profi ts

• the dominant companies not availing their resources

• the government not being able to implement the optimal solutions since it has limited choices of potential partners in the private sector

• the resources not being shared optimally if the dominant players do not buy into the

NHI vision

• designing mechanisms that suit the oligopoly to an extent

that the government indirectly strengthens the dominance of

the oligopoly in the private sector.

These challenges could lead to delays in the implementation of the NHI, unexpected cost implications, a disgruntled society left feeling that the government is not delivering on their promises, and achieving minimal social value.

The private sector is an important player but it is the confi guration of the players in the private sector that poses risks that should be addressed during the NHI discussions.

Why can’t we have more companies in the private sector?

The government needs the participation of the private sector in order to implement the NHI successfully. The private sector is instrumental in addressing the capacity challenges faced in terms of facilities, beds and human resources. If, in the next 15 years, we want a private health-care sector that is more competitive, has more players of varying sizes, reaches out to the broader society instead of 16% of the population, offers the public a variety of services at a broader price range, then we must recognise the existing key barriers to entry and sustainability.

NHI will struggle without the private health-care sector reform

I

By Mamosa Motjope

"We want all South Africans to have access to quality and timely health-carwe services that are within a

reasonable distance from their homes."

Pg 11 | Issue #1 | July 2011

t is imperative that we ask ourselves what our health-care system should look like in 15 years’ time when discussing the National Health Insurance (NHI)

plans. How should the private sector coexist with the public sector and should the private sector be composed of three large groups owning about 84 percent of the private hospitals and only serving 16 percent of the South African population?

The common criticism of the private health sector is that:

• it caters for the wealthier minority and excludes the majority of South Africans from accessing health-care

• it is not easily accessible to people who reside in townships and rural areas

• the cost of private sector health-care is increasing and becoming unaffordable.

These challenges, along with public sector inefficiencies, are at the core of the current NHI discussions. These discussions aspire to give all South Africans their basic human right to quality health-care and are also focused on designing mechanisms around the existing setup of the private and the public health systems, as per the ANC NHI discussion paper.

“The implementation of the national health insurance plan means transformation of the funding model for health as well as reorganisation of health-care delivery. Universal access to health services can only be achieved through a simultaneous and two-pronged approach. First, significantly strengthen the public sector so that it becomes the provider of first choice. Second, design mechanisms for ensuring that scarce and critical health service resources in both public and private sector are shared and optimally used by all to maximise social value.”

We want all South Africans to have access to quality and timely health-care services that are within a reasonable distance from their homes – hence the first approach, of strengthening the public sector, is a non-negotiable and

needs to occur at all levels of the public health system. The second approach, of designing

mechanisms to share resources between the private and public sector, does

require thorough analysis of the challenges that can be posed by the current landscape of the private health-care sector.

The government could be faced with challenges such as:

• bargaining with an oligopoly that is resistant to change and is

understandably more concerned about the impact on their profits

• dominant companies not availing resources

• the government not being able to implement the optimal solutions since it has limited choices of potential partners in the private sector

• the resources not being shared optimally if the dominant players do not buy into the NHI vision

• designing mechanisms that suit the oligopoly to an extent that the government indirectly strengthens the dominance of the oligopoly in the private sector.

These challenges could lead to delays in the implementation of the NHI, unexpected cost implications, a disgruntled society left feeling that the government is not delivering on their promises, and achieving minimal social value.

The private sector is an important player but it is the configuration of the players in the private sector that poses risks that should be addressed during the NHI discussions.

I

NHI will Strugglewithout the Private Health-CareSector Reform

Pg 12 | Issue #1 | July 2011

Why can’t we have more companies in the private sector?

The government needs the participation of the private sector in order to implement the NHI successfully. The private sector is instrumental in addressing the capacity challenges faced in terms of facilities, beds and human resources. If, in the next 15 years, we want a private health-care sector that is more competitive, has more players of varying sizes, reaches out to the broader society instead of 16 percent of the population, and offers the public a variety of services at a broader price range, then we must recognise the existing key barriers to entry and sustainability.

These barriers are primarily access to funding and government regulations and processes, but also include:

• the red tape involved in obtaining hospital licences in some provinces

• the lack of clarity and transparency around the Department of Health’s processes when it comes to issuing licences

• the lengthy turnaround time in issuing hospital licenses

• the fact that both private and government financial institutions are more inclined to provide funding if the entrepreneur is embarking on a large scale project

• how innovative concepts are viewed with scepticism and as too risky for financial institutions

• the fact that public-private-partnerships that are government initiated tend to favour well established businesses instead of smaller businesses that are not that well capitalised. This actually strengthens the dominance of the few players in the private sector.

The inflexibility of financing institutions to see beyond check boxes and “known successful models” limits innovation not just in health-care but across all industries and consequently suppresses entrepreneurship in South Africa. We can only grow what the government’s development financial institutions are willing to invest money in.

What role can the Government play in changing the private sector landscape?

The government has significant influence on how financial resources are allocated to new and existing players in the health-care sector through development financial institutions such as the DBSA, IDC, PIC, and so on. The government also decides on who gets the licences and for which geographical areas. The government can significantly alter the landscape of the private health-care sector if it so desired.

This is not implying that the government should attempt to control the private sector but rather highlights the opportunity the government has to open up the private sector to a number of smaller players through making licences and funding available to new players. If more licences are issued for rural areas and townships, then South Africa will have more medical facilities in these previously under-developed areas. If funding is made available to new entrepreneurs, then in 15 years time we will have an industry that has a radically different landscape.

Redirecting funding and hospital licenses to new players could have the following benefits:

• an increase in the number of medical facilities, beds and human resources

• attracting the health-care workers who are currently working overseas – providing the new players can provide better working conditions

• job creation, which will increase the tax pool

• penetration of the under-developed areas, thus enabling the majority of South Africans to have easy access to health-care, a short distance away

• development of innovative and affordable health-care solutions since new players will most likely seek market niches and not compete directly with the existing few industry leaders

• a cheaper health-care alternative for people who currently cannot afford the existing private health-care services. This will reduce the number of people dependent on free health-care

• the government will have a wider variety of choices for private partners when implementing future initiatives.

Do we need a lot more money to change the private health-care industry landscape? No, we just need to repackage and allocate resources differently. We need the Department of Health to streamline its process of issuing licences and the development financial institutions to be willing to take risks with smaller entrepreneurs with viable projects.

The precise nature of the proposed NHI is still the subject of discussion, and these discussions should involve a wider audience. The government must be fully aware of the important role it plays in shaping the private sector through financial resources and hospital licencing.

The government cannot afford to shy away from using these levers to shape the private health-care industry landscape – not if it wants to implement the NHI successfully.

n seventeen years of democracy, significant progress has been achieved in improving access to health. However, more remains to be done to ensure that

all South Africans enjoy quality health services without catastrophic medical costs and consequences.

The South African health system has multiple challenges that need to be addressed to improve the delivery of services. At the 52nd ANC National Conference in Polokwane the meeting provided the policy impetus by calling for the “implementation of a National Health Insurance (NHI) to further strengthen the public health-care system and ensure adequate provision of funding”.

This resolution acknowledges that the South African health system has challenges that can only be addressed through a comprehensive transformation of the system.

The implementation of the NHI plan means transformation of the funding model for health as well as reorganisation of health-care delivery. Universal access to health services can only be achieved through a simultaneous and two-pronged approach. First, significantly strengthen the public sector so that it becomes the provider of choice. Second, design mechanisms for ensuring that scarce and critical health service resources in both public and private sector are shared and optimally used by all to maximise social value.

The transformation process intends to fundamentally address structural and systemic aspects of the health system that are sustaining current inequities, and engender solidarity through redistributive and social justice in the delivery of health services.

The establishment of a National Health Insurance is predicated on two core principles:• First, the right to health: the state must take reasonable legislative and other measures, within its resources, to achieve the progressive realisation of the right to access health-care services. A key aspect of ensuring access to

health-care is that services must be free of any charges at the point of use. • Second, social solidarity and universal coverage: the commitment to social solidarity in the South African health system means a mandatory contribution by South Africans to funding health-care according to their ability to pay. Given the massive income inequalities, progressive funding mechanisms must be used (that is, the rich

should contribute a higher percentage of their income to funding health services than the

poor) and the government contributes for the indigent. There should be

universal access to health services that meets established quality standards so that everyone is able to use health services according to the need for health-care and not on the basis of ability to pay.

The main sources of funding for the NHI will be allocations

from general tax revenue with a progressive increase of the

public-health sector budget over five years and a small mandatory health

insurance contribution. All of these funds will be combined into a single NHI fund, from

which all services covered by the NHI will be funded. The resources pooled in the NHI Fund will be managed by a public authority that will allocate them according to an agreed annual national health plan and be responsible for central purchasing of health services for the NHI through sub-national levels.

Central allocation of funds and purchasing is critical in ensuring that national public health policy objectives are achieved and unnecessary disparities are avoided. The allocations will be based on relative health-care needs, such as the size of population, age and sex composition of the population, HIV/AIDS/tuberculosis and levels of ill health.There will be a separate mechanism for allocating capital funds under the NHI. Underlying this separate allocation mechanism is the need to redress historical inequities in the availability of health infrastructure and improve physical access for all.

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A Revolution inHEALTH-CARE

Pg 13 | Issue #1 | July 2011

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Purchasing refers to the transfer of financial resources to both private and public health service. The NHI, through its sub-national levels, will assess the specific health-care needs of the community served, decide on what type and quantity and quality of health services are required to meet these needs, and which health-care providers should provide these services to ensure that appropriate services are available to the population.

This process of assessment applies to services directly provided by the purchasing organisation itself and to services provided by independent contractors. A single purchaser will fundamentally address the current fragmentation, spiralling costs and allow the government to implement public health policy effectively.

There will be a comprehensive package of services that includes primary health-care services as well as hospital inpatient and outpatient care. People will be expected to follow the appropriate referral route to ensure effective gate-keeping as at the primary health-care level before referrals to specialists and hospital-based care when necessary. This will ensure that resources are used efficiently and appropriately. People will have choices as to where to obtain care.

The main provider mechanism will be capitation payments (that is, a set amount per person per year) in its various forms. The payment arrangements will be structured to ensure that both providers and users of services are less inclined to overuse or over service patients and hence control spiralling of costs. Health-care will be purchased from either public or private health-care providers which have been accredited by the NHI. Providers will be accredited on the basis of their ability to provide services of acceptable quality, willingness to accept payment levels affordable to the NHI, and the need for such providers within a particular area.

At the primary care level, existing private general practitioners (GPs) can be accredited if they work in group practices, which include primary health-care nurses and a range of allied health professionals. Similarly, public and private hospitals at various levels will be accredited to provide NHI services. People can then choose between accredited providers in their area.

However, it is important that other health system challenges are addressed and this includes: interventions to improve human resources for health, infrastructure revitalisation, maintenance and new developments, reforming management of hospitals and general quality improvement plans. To ensure effective stewardship of the health system, there must be an appropriate and integrated framework for regulating the quantity, distribution and quality of care of both public and private health-care providers.

Although in the past recommendations for substantial health systems transformation in South Africa have not been taken forward, the Polokwane resolution to proceed with an NHI combined with the prioritisation of health and education sectors, suggests that the pace of change is likely to be faster than seen hitherto.

The challenges for such substantial transformation of all aspects of funding and providing health services in South Africa are well appreciated and understood; that is why it is critical that the process be phased over a period of up to five years.

However, each year will be characterised by significant changes towards the full implementation of NHI. To facilitate the transformation process appropriate legislative reforms will be implemented soon to provide the legal framework for introducing change and formation of appropriate institutions for NHI. It is only through such bold changes that universal access to quality services can be guaranteed.

Pg 14 | Issue #1 | July 2011

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Nkosinathi Biko

Nkosinathi Biko is the Chief Executive Officer of the Steve Biko Foundation. He is a founder member of the Board of Trustees and chaired the Steve Biko Foundation for the first five years. Biko graduated from the University of Cape Town where he pursued a Bachelor of Social Science (Economics) and a Postgraduate Diploma in Marketing Management. He studied Property Development and Finance through the University of the Witwatersrand. He is also a published writer and speaker and has given lectures on the international circuit.

Pg 15 | Issue #1 | July 2011

Obenewa Amponsah

Obenewa Amponsah is the Steve Biko Foundation’s Director of Fundraising and International Partnerships. With a background in African affairs, Amponsah is particularly interested in the creation of Pan African solutions to foster African development. She holds an undergraduate degree in International Relations from Boston University and is currently pursuing a Masters in International Relations at the University of the Witswatersrand.

Ghairunisa Galeta

Ghairunisa Galeta is a black South African-American and lives in Johannesburg. She holds a BA in Sociology/Anthropology from Spelman College in Atlanta, Georgia in America and an MPH in Socio-medical Sciences and Health Policy from Columbia University, New York. As a freelance consultant, she has a cross sectoral interest and focuses on social justice, community engagement and cultural activism.

Contributors

Tejal Mistri

Tejal Mistri has a BA Degree majoring in Psychology and Media Studies from the University of the Witwatersrand. She joined the Steve Biko Centre for Bioethics as a research assistant in January 2010. Mistri is actively involved in compiling and coordinating research projects at the centre. She is also involved in planning Ethics Alive, an annual Ethics Week hosted by the Faculty of Health Sciences and the Steve Biko Centre for Bioethics.

ContributorsHarriet Etheredge

Harriet Etheredge holds an MScMed degree in Bioethics and Health Law from the University of the Witwatersrand, Johannesburg. Currently working at the Steve Biko Centre for Bioethics, Etheredge is involved in lecturing and research. She has presented at conferences both locally and in the United States. Etheredge has authored and contributed to numerous articles and book chapters. She is also the author of a book entitled: Looking at the Living Will: Your Death, Your Dignity and Your Doctor and she sits on the Wits Human Research Ethics Committee (Medical).

Pg 16 | Issue #1 | July 2011

Dr Jonathan Broomberg

Dr Jonathan Broomberg is the Chief Executive Officer of Discovery Health. A medical doctor and health economist, he studied Medicine at the University of Witwatersrand, and obtained an MA (Politics and Economics) from Oxford Univer-sity. He later completed an MSC and a PHD in Health Economics at the University of London. He has spent over 20 years working in the fields of health-care man-agement, health economics and policy in both the public and private sectors, in South Africa and abroad. He also plays a role in international public health affairs, and served on the Technical Review Panel of the Global Fund to Fight Aids, TB and Malaria for five years.

Roseanne Da Silva

Roseanne Da Silva is a consulting actuary with over 17 years of experience in the South African health-care and employee benefits fields. She graduated from Wits in 1993 and qualified as an actuary in 1995. She has presented the following pa-pers to the Actuarial Society of South Africa: “Managed Care and South Africa” in 1996 and “The impact of HIV/AIDS on Medical Schemes in South Africa” in 2006. She has served on the health-care and research committees of the Actuarial So-ciety and is convenor of the Actuarial Society’s NHI Task Team. Her current areas of practice are health-care, employee benefits and AIDS consulting.

Pg 17 | Issue #1 | July 2011

Contributors

Dr Howard Manyonga

Dr Howard Manyonga has a Bachelor of Medicine and Bachelor of Surgery from the University of Zimbabwe he also holds an executive MBA from UCT. Dr Man-yonga has been an obstetrician and gynaecologist for the past 10 years, and is an honorary lecturer and external examiner at the UCT Medical School. His main interest is strategic communication and the facilitation of strategic discourse in multi-stakeholder environments. He has a keen interest in the application of ICT as an enabler of communications in health-care and is currently the ExecutiveDirector of PeoKura, which focuses on health-care solutions.

Mamosa Motjope

Mamosa Motjope holds a BSc degree in Electrical Engineering from the University of the Witwatersrand as well as an MBA degree from the Heriot-Watt Business School in Edinburgh in the United Kingdom. She has worked as an information engineer and strategy consultant. Her main interests are in the field of strategy, politics and entrepreneurship. Her opinions on the health-care system have been inspired by the projects she’s involved in with a start-up company called PeoKura.