South Africa has formally opened discussion and debate on the proposed National Health Insurance (NHI) plan, the primary goal of which is to “ensure that everyone has access to a defined comprehensive package of healthcare services.”(2) This plan is one step towards achieving universal health coverage in post-apartheid South Africa where the majority of South Africans do not have access to the available, expensive health care. Universal coverage means that all citizens would enjoy financial protection from the costly burden of ill health. The idea of the NHI has been present in the public sphere for decades and the release of the Green Paper by the Deparment of Health on 12 August 2011 signaled the beginning of the policy debate in official government capacity.
The 60 page document includes a variety of commitments ranging from broad policy statements on equity to specific plans to build new facilities, upgrade existing ones and plans to introduce community-based teams of health workers to take services to people’s homes. Whilst many experts and organisations hailed the release of the Green Paper, it has also been met with fierce criticism from a variety of actors. Many stakeholders see the NHI as a costly, unachievable pipe dream, destined to fail, while others believe it is necessary to reduce the inequities of the past and provide the much needed, long overdue health care for previously disadvantaged South Africans. This CAI brief explores the background of the NHI Green Paper and its relevance to the future of health care financing in South Africa.
Decades of inquiry into NHI
NHI discussions have their roots in the Gluckman Commission in the early 1940s. This commission accepted and approved the introduction of 44 community-based centres as a first step towards national health service in South Africa. At the time, South Africa was at the cutting edge of the primary health care approach with the famous Polela experiment.(3) However, the processes and proposals this commission accepted were reversed after the election of the National Party (NP) Government in 1948.
It was not until the early 1990s, that a national commission in South Africa would form once again to discuss and plan for a universal health approach. The Committee of Inquiry on National Health Insurance in 1995 was tasked with considering options and proposals from the Health Care Finance Committee for an NHI scheme in South Africa. This committee has been working under the premise that all publicly provided primary care services would be free of charge to South African citizens.
Through a series of discussions, negotiations and committees, the Ministerial Advisory Committee on National Health Insurance was established in 2009, which represented the culmination of these ongoing debates. The release of the Green Paper has now reopened age-old debates on the subject of a national health scheme but also, has drawn new criticisms, not least of which is the lack of consultation with medical professionals in drafting the document, as well as criticisms of non-existent implementation plans.
The process: Step 1 in a 15-year plan
The Green Paper proposal is in line with the international consensus on achieving universal health coverage, an issue which is at the core of the prevailing global health financing agenda. The Green Paper sets up a plan which aims to achieve universal health care for all South Africans over a period of 15 years (through three- to five-year phases). The first phase shall focus on those with the greatest need first, by setting up an NHI infrastructure. Some of the proposals in this realm include various primary health care improvements, the construction of new tertiary facilities in underserved areas, striving to remedy nursing shortages and setting up regulatory bodies such as Office of Health Standards Compliance (OHSC).(4)
The second five-year phase (2016-2021) aims to focus on bigger and broader actions, such as the establishment of the NHI fund. This includes amalgamating the administration for all health funds including the road accident fund (RAF) as well as the compensation for occupational injuries and disease (COID).(5) Phase 3 (2021-2026) includes similar goals with more focus on accreditation of private sector providers, capacity building and infrastructure improvement. Overall, the Green Paper estimates that NHI development would cost ZAR 125 billion (US$ 17.3 billion) in the coming year and up to ZAR 255 billion (US$ 31.4 billion) by 2025.
Key players and debates
The key players in changing health care financing are various stakeholders who hold different positions and criticisms of the NHI. Some opposition party members are concerned that mandatory contributions would increase an already high tax load. South Africa’s largest trade union, COSATU, is disturbed that the system could be a multi-payer and provider system and are critical of the role private health providers may play in a state-funded scheme. Health lobbyists and concerned taxpayers worry about the NHI’s autonomy, given that it would report to the Health Minister and Parliament.(6) The private schemes are concerned about what the NHI will mean for their future.
However, there has also been discussion in the private sector that members of private schemes are not accessing quality services despite high contribution rates. Gavin Mooney, an Australian economist and visiting Professor of Health Economics at the University of Cape Town (UCT), points out that private schemes exist in a market where competition has failed, which has lead these private schemes to “grow fat and inefficient, causing escalating costs alongside shrinking benefits…causing members of private schemes to legitimately moan and groan…”(7)
Despite customer dissatisfaction in the private sector, Mooney suggests that private health care consumers are simply afraid that the alternative (poor quality in the public sector) would be worse, even if they agree in principle that the idea of an equitable system for all is appealing.(8) Currently, a disproportionate share of the human and financial resources for health is found in the private sector, which serves 16.2% of the population.(9) Conversely, the public sector theoretically serves the remaining uninsured segment of the population, which finds itself under-resourced on all fronts while attempting to manage the overwhelming burden of disease that unequally falls on low and middle-income people in South Africa.
The average contribution to a private medical scheme in South Africa ranges from 5-14% of one’s income. As a result of South Africa’s stark income-related inequalities, wealthy individuals and employers are concerned that they will end up paying more for health care than they do currently. While the NHI may be financed progressively (the wealthier pay a larger proportion of their income than the poor), Di McIntyre, a health economist at UCT maintains that the cost of NHI contributions for wealthy South Africans would be far less than the current cost of private health schemes.
Equity, accountability and feasibility
One of the moral dimensions of this debate is whether wealthier South Africans should be contributing even if they choose not to use NHI services. McIntyre, who is also author of National Health Insurance: Providing a Vocabulary for Public Engagement argues that it is not unfair to ask the richest 10% of the population which controls 51% of total income in South Africa to contribute towards the NHI even if they choose not to use NHI services and continue paying for private medical scheme cover.(10)
McIntyre is urging the public to be critical, yet receptive of the Green Paper. She makes the case that South Africa cannot afford not to implement the NHI. She makes the case for equity by arguing that “We cannot continue to tolerate high rates of ill-health and death. We cannot continue to deny millions of South Africans access to health care when they need it. We cannot allow our horrendous health divide to continue.”(11)
However, heeding concerns of accountability and feasibility from many concerned with mismanagement of public funds, she suggests an independent institution that acts as purchaser for both the public and private providers. This is a method which has worked in other countries that have successfully implemented universal health care systems such as the UK, Australia and Canada.(12)
South Africa, a country with one of the most progressive constitutions in the world, is a country with strong rights-based policy documents. However, such high standards are often met with poor implementation outcomes and a political system, which is still struggling to maintain transparency and accountability. The NHI Green Paper risks paying lip service to a very important policy goal of affordable health care for all, with little focus on implementation and feasibility. However, Mooney points out that South Africa has history on its side in its journey to universal coverage, citing similar debates in countries like the UK and Australia.(13) It is clear from an equity perspective that the NHI aims to take substantive steps to effectively redress the inequities of the past and ensure previously neglected South Africans are provided with the health care they deserve.
(1) Contact Katherine Austin-Evelyn through Consultancy Africa Intelligence’s Rights in Focus unit (firstname.lastname@example.org).
(2) ‘RSA National Health Insurance in South Africa: A policy paper’, South African Department of Health, p.16.
(3) See Dubow, S. & Jeeves, A. 2005. South Africa’s 1940s: Worlds of possibilities. Cape Town: Double Storey Books. Pp. 108-109, http://books.google.co.za.
(6) Marianne Merton, ‘Experts examine NHI draft’, IOL, 13 August 2011, http://www.iol.co.za.
(7) Gavin Mooney, ‘Ask the people what they want for health care’, Mail & Guardian, 12 July 2009, http://www.bhfglobal.com.
(10) Di McIntyre, ‘Can South Africa afford not to have NHI?’, 22 August 2011, Health-E News, http://www.health-e.org.za.
(13) Gavin Mooney, ‘NHI: History repeats itself’, 26 August 2011, Mail & Guardian, http://mg.co.za.