opinionBy Olive Shisana
The Director of the Human Sciences Research Council weighs in on the current NHI debate.
The issue of the need to establish a national health insurance system is not a new phenomenon. Before the second world war which broke out in 1939, more than 30 countries already had compulsory national health insurance (NHI) schemes. Voluntary national health insurance schemes were also in existence. The working class were eager to pool their resources to set up health insurance schemes to provide social security that included health care for every one. In our country, the effort to set up a national health insurance system is older than many of us who are grappling with this issue.
The initiative to establish the National Health Insurance as well as the debate in South Africa began more than 70 years ago. In 1941 J. Collie, the chair of the Committee of Enquiry into National Health Insurance, published a national health insurance plan for South Africa in the South African Medical Journal. In the proposed scheme, Collie outlined a scheme that covered people of all races except those who lived in rural areas (largely occupied by blacks), mainly because the latter were considered unable to contribute to the fund; in addition, there were not enough medical personnel to provide care in those areas. The proposed NHI was to be paid by contributions from government, employers and employees; the contributions from employees were to be progressive. Anyone earning â‚¤400 per annum would be included in the NHI. The guiding principles were that patients were free to choose a doctor, doctors had free choice of treatment for the patient and each doctor would serve 2000 patients and payment was to be on the basis of capitation. The then Medical Association (Federal Council of the Medical Association of South Africa) disagreed among themselves, but eventually agreed on capitation rates.
Medical practitioners argued that the doctor would become an employee of the insurance society, that the status of the profession would decline or that standards of patient care would be lowered. But even then there was an agreed upon standard of care that medical practitioners were to provide to their patients. The proposed NHI was never implemented. Instead the government set up another commission headed by former Minister of Health, Dr. Gluckman. His commission made recommendations for a national health service, which was also never implemented.
From this historical account, it is clear that maldistribution of medical practitioners and inequities of access based on race and locality are not new. The maldistribution was further entrenched by the apartheid government, where racially-based services were legislated.
The African National Congress (ANC)-led government has also tried to implement the National Health Insurance since 1994, starting with the Department of Health option for NHI, which included universal cover, contracting of GPs paid through capitation, with no room for additional voluntary insurance. This plan was not accepted because it was considered inflexible, even though it would have contained costs and met the constitutional mandate of access to care for all. Subsequent to this, the government set up a Committee of Inquiry into NHI which presented its report in 1995. The plan departed from the earlier Department of Health plan and opted for a social health insurance (SHI), universal access to primary health care and regulation of the private medical schemes. The component on universal access to primary health care in public health facilities was implemented in 1996 and the regulation of medical schemes were partially implemented. Subsequent to this, in 1997, the Department of Health proposed a social health insurance based on the Committee of Inquiry into NHI and modified it so it could be used as a basis for the new Committee of Inquiry into Social Security. Under this plan, the SHI would support the public health system, there would be mandatory cover for those who earn above a specified tax threshold, all employed persons and their dependents would have public hospital health cover. The problem with the plan is that it did not cover the entire population, did not raise sufficient funding to improve the services provided and did not adequately link primary health care cover with hospital cover. The detailed analyses of these proposals are contained in an article I published in the South African Medical Journal December 2001.
It is instructive to revisit the ANC-led government's 1997 White Paper on the transformation of the health care system, which argued for the integration of the activities of the public and private health sectors, in order to maximise the effectiveness and efficiency of all available health care resources in a unitary national health system. The public and the private sectors are still worlds apart; in fact they have grown even further apart in terms of financing, service provision and the size of the population served. Some argued that rather than introduce a universal national health insurance, the country should move to a social health insurance, which will cover only those who are employed and so Government Employers Medical Schemes was introduced.
NHI is certainly a means to an end. It is a form of social security that provides people with access to much needed and quality health services, and with financial protection through a health financing system based on the social solidarity principle.
There is a move all over the world for countries to transform the financing of health care systems to ensure that all citizens can access quality health care and remove the financial barrier to access. User fees as a form of payment of health care is problematic because of its potentially catastrophic consequences on poorer households.
The system has been implemented in industrialized as well as developing countries. For example, countries such as Brazil, Peru, Tunisia, Ghana, Thailand and Canada have national health insurance systems. And in all of them, there are diverse NHI models but all are essentially dedicated towards the principles of universal coverage and social solidarity, amongst others. And indeed, there are many lessons that can be drawn from these experiences.
However the process of developing and implementing a national health insurance as a mechanism for risk pooling depends on social and economic factors of any given country. But it also depends on political leadership will and popular support. Whilst other countries have taken decades to achieve universal coverage, others implemented NHI and achieved universal coverage in relatively short periods. Planning for implementation in Taiwan for example, was less than five years and in 1995 NHI was implemented in the midst of the worst Asian economic crisis, covering nearly 98% of the population in twelve months; in Thailand it was implemented in 14 months, in Tunisia in two years, in the UK and Canada much longer. Even after implementation, planning continued in many of these countries. It was not the question of "fix the health system first and then implement NHI". NHI formed integral part of "fixing the system". The development of any NHI model needs to take into account peculiarities of a given country, and draw on the best aspects of accumulated international experience.
In many countries where NHI was successfully implemented there was always potential resistance by narrow interest groups, bureaucratic stifling, financing challenges and political opposition. To overcome this resistance, it always required strong political leadership which understands the social and economic importance of NHI and courageously seek to unite society behind the values and principles of NHI.
South Africa remains a highly unequal society, fifteen years after a hard won democratic dispensation. With a Gini Coefficient (a measure of income inequality) of 0.578 in 2008, our country has become one of the most unequal societies in the world. We have just surpassed Brazil at 0.57 and are slightly ahead of Columbia, Haiti and Paraguay. In a country without a national health insurance it means some of the people pay for health care out of their pocket depleting the very little income they have. Poverty levels remain unacceptably high for one of Africa's largest economies. All these inequalities have significant public health implications and the quality of life of our people.
With regard to health, these inequalities are exacerbated by the fragmented health care system with the public health care system serving 85% of the population (42 million) and the private serving the remaining 15%. This is not a problem per se given that our health care system is a mixed model, but what is a problem is the skewed resource allocation between the two sectors. The medical schemes expends more than 45% of resources to cater for a stagnant 7.4 million people whilst the public sector expends 40% on the rest of the population, with the remaining 15% being spent (mainly on the private sector services) on an out-of-pocket basis. This cannot be right and needs to be corrected through transformative health policies such as National Health Insurance.
Inequalities in access are also reflected in differentials in health outcomes as the poor account for the largest share of the disease burden. Key health outcomes such as infant, child and maternal mortality are on the rise: most of these avoidable. The country is way behind achieving the Millennium Development Goals and targets in this regard. These health system challenges call for innovative mechanisms for ensuring that the health care system is configured and financed in such a way that the noble objective of universal access is achieved.
What is a NHI system and it's objectives?
A National Health Insurance is a system of mandatory health insurance contributions, in which those who can afford contribute according to their ability and those who cannot afford are paid for through subsidies from government. The funds are pooled into one fund from which resources are drawn as people use services according to their need.
National Health Insurance systems address the problem of a fragmented health care system by integrating private and public sector activities using a financing instrument to achieve goals that serve the public at large.
Through larger risk pooling it is possible to facilitate fair allocation of resources including human resources, facilities and other essential services across the country. What is key here is achieving fairness of financing and risk protection for all. Those without medical aid and without financial resources face catastrophic health care expenses particularly in this economic crisis.
It is not uncommon for those who have private health insurance to exhaust their benefits early, and resort to the public sector unless they are willing and able to co-pay for services. NHI systems around the world seek to ensure that the resource pool is large enough to avoid any form of co-payments unless something is medically unnecessary. As a society we need to act in unity to achieve universal financial risk protection; more so now when the economic climate requires that individuals and companies begin to contribute to a nation-building process. The need to create a cohesive society that cares for everyone regardless of colour, class, religion, creed, ethnic group or any other division is a national imperative.
Concerns have been raised about the status of the public health system. It is true that the public sector has been facing major challenges in terms of both the quantity and quality of services it provides. Clearly, that cannot be explained by under-funding alone but by other health systems constraints such as shortages of human resources, management capacity constraints, sometimes cumbersome procurement processes and the ever increasing disease burden. Listening to the Minister of Health, Dr. Aaron Motsoaledi speak in Parliament, we should all feel assured that this is high on his agenda.
The private health sector also has its challenges. Cost escalations remain a huge challenge despite attempts to regulate the medical schemes industry. Some of the cost drivers are known: high non-health related expenditures (administration fees, managed health care fees, brokerage fees, commercial reinsurance) which in FY 2007/8 amounted to R8.9 billion. Furthermore, high specialist costs, low bed occupancies and excess capacity in the private sector, medicines (notwithstanding recent decreases) and over use (moral hazard) remain as challenges.
This debate should not be about whether or not to introduce NHI, but about what form it takes. The debate on form must take into account the challenges that are currently being faced in both the public and the private sector and if history is anything to go by the trajectory of introducing NHI through social insurance arrangements has not yielded the intended results.
These challenges of access cannot be achieved by a business as usual attitude but by fundamentally addressing the structural problems in the health care system. Such reforms will always have losers and winners but what is important is the overall gain for the public at large. We are in the most crucial period of our history, and we stand a better chance of seizing the opportunity to ensure that we realise a publicly funded, but publicly and privately delivered health care system for all South Africans.
Shisana is CEO of the Human Sciences Research Council and chair of the ANC NHI task team. She writes this in her personal capacity.