By Tamar Kahn, 8 August 2017, businesslive.co.za.
The development corrects the unintended consequence of the government’s failure to adjust the means test for 15 years.
The Department of Health has adjusted the means test used to determine who is eligible for free or discounted fees at public hospitals, a move that could bring millions more people into the social security net.
The development corrects the unintended consequence of the government’s failure to adjust the means test for 15 years, despite increasing hospital fees. The situation rendered an increasing number of households on modest incomes ineligible for state support.
Contrary to perception, public hospitals may charge patients for services received, using a set of tariffs that vary according to household income.
The poorest households are entitled to free healthcare, those on modest incomes are charged subsidised rates and those that earn more than the upper threshold of the means test must pay in full. The extent to which hospitals collect these fees varies among the provinces.
The Western Cape health department had the most efficient bill collection system, partly because it provided incentives for hospitals to do so, said Department of Health deputy director-general for regulation and compliance Anban Pillay. “We’ve been discussing this with Treasury and the Financial and Fiscal Commission to get other provinces to do something similar,” he said.
“Most provincial health departments rarely collect [hospital] fees because their systems are not strong enough or the cost of following up is too high,” he said. Many hospitals lacked the capacity to verify patients’ income, he added.
Despite steady increases in the fees charged by hospitals, the means tests used to determine whether patients are eligible for free or subsidised fees was never adjusted for inflation and was held at the 2002 threshold until April, gradually squeezing out more and more previously eligible families. The result was a growing number of patients unable to afford medical scheme membership yet not eligible for free or subsidised public hospital fees.
The 2002 means test enabled households with an annual income of less than R100,000 to qualify for free or heavily discounted hospital fees. Had the Department of Health adjusted that threshold for inflation, it would have amounted to R213,300 in 2016.
The adjustment to the means test, which provincial health departments have been introducing since April, goes beyond an inflation adjustment and enables households earning less than R350,000 a year to qualify for subsidised or free care.
Pillay said the new income thresholds would ensure an estimated 29-million people were eligible for free or subsidised hospital care.