As South Africa continues on the road towards adopting National Health Insurance, experts have warned that a sluggish economy, centralised state entities and an underperforming healthcare system will make that task all that harder.
Speaking at the Hospital Association of South Africa conference 2023, which was held in Cape Town, Dr Paula Armstrong of FTI consulting told the audience that the effects of the Covid 19 pandemic still held sway over the economy.
“The economic growth rate is not looking good,” she said. “South Africa’s growth is still constrained and is likely to remain that way.”
She painted a picture of high unemployment, dwindling salaries, rising inflation and the economic effects of loadshedding.
It is in this environment that she outlined what the costs of NHI would be if the government used a single payment system.
According to figures compiled in 2011, the South African government would have to raise 200 million rand through taxation.
“This would require raising VAT from 15% to 21.5%. And a 31% increase in personal income tax across the board,” Armstrong said.
However, to find a model to fund the NHI, Armstrong believes a priority is identifying the medically uninsured and getting them into the system. They constitute 84% of the population, are either on social grants or earn less than R70000 a year.
“These people should be prioritised in any kind of NHI or public sector provision,” Armstrong said. There are also another 14,5 million South Africans who are slightly economically better off who could be provided medical insurance through risk pooling or a low-cost benefit option, she added.
During his presentation, Professor Alex van den Heever of Wits University warned that if the NHI operated as a typical centralised government entity, it would likely fail as so many SOES have done in the past. This concentration of power can often remove the checks and balances that open them up to corruption.
“What we have is a governance problem. It is all about the accumulation of power, and the only way to stop it is not to allow it,” he said. “Now, if you allow your regulators to be captured, if you create legislative frameworks that aren’t enforced, then you’re allowing this accumulation of power to occur.” Van den Heever said that you needed people who respond to the communities they serve rather than political parties. A decentralised entity is more innovative, he said.
Economist Professor Ronelle Burger of the University of Stellenbosch added to the conversation by giving the South African Health Care system a medical check-up. She told the audience her research has shown a healthcare system that is not doing the basics right and is underperforming when compared to developing countries in the same category as South Africa. For a start, it is an unequal, polarised healthcare system. In this system, the private care sector employs two-thirds of the doctors and half the nurses while catering for the needs of one out of five South Africans. The poorest, Burger said, are likely to suffer the effects of stockouts, particularly TB drugs. “And these stockouts are more likely to lead to deaths,” she said.
There is also a disease divide in South Africa.
“We know that deaths from certain diseases are almost unknown amongst the affluent, while diseases like TB, HIV and diarrhoea are quite prevalent with the poor,” she said. Research also found that health professionals in some hospitals were not collecting enough information from patients.
Burger said collecting up-to-date data is essential to understand the challenges facing the South African healthcare industry and plot the way forward to adopt the NHI. Health Insurance, her research found, had a positive effect on those using it. People were more inclined to use it because of the convenience. Those on health insurance go to the doctor more often than those without.