NHI won’t fix the system – study
IRR research finds that improving private health care is more effective when delivering services
HARNESSING the strengths of the private health-care system will be more effective in delivering better health services to all than the government’s National Health Insurance (NHI) plan.
This is one of the key arguments in the latest report from the SA Institute of Race Relations (IRR).
The @Liberty policy bulletin, “Pressing Ahead with NHI Implementation”, warns that NHI will likely prove inefficient and unaffordable. It will also undermine a world-class private health-care system to which nearly a third of citizens (about 17 million people) already have access through medical schemes, health insurance policies, or out-of-pocket payments.
The report examines in detail the flaws in the government’s mega health plan. It also describes some of the alternative proposals that have been advanced to achieve what the World Health Organisation (WHO) refers to as “universal health coverage” (UHC).
UHC requires the equitable and effective provision of health services across society, says the WHO, but not “free coverage for all possible health interventions” as no country could afford this “on a sustainable basis”. Yet this is what the NHI is supposed to achieve.
The @Liberty report notes that “concrete proposals” for a new UHC system have been developed by the SA Private Practitioners’ Forum (an organisation representing private specialists), the DA, the Free Market Foundation, and the IRR, among others.
Dr Anthea Jeffery, head of policy research at the IRR and author of the @ Liberty report, says the alternative proposals all agree that the “most important need is to give the poor increased access to South Africa’s world-class system of private health care”.
By contrast, Minister of Health Dr Aaron Motsoaledi seeks to nationalise private health care and establish a state monopoly. He also accuses critics of NHI of wanting to retain an unfair system and deprive South Africans of the benefits of universal health coverage.
This, Jeffery says, is false, as opposition to NHI stems rather from the inability of the government’s proposal to meet the country’s health needs. Dr Jeffery writes: “far from bringing about increased access to health care… (NHI) will deprive many South Africans of the access they currently enjoy.”
What is needed, rather than the “revolutionary” change that Motsoaledi recommends, is a measured process of “incremental reforms” to “harness the strengths of the private health-care system, while rebuilding the capacity of public health care, increasing the supply of doctors and other providers, encouraging competition and innovation, and extending efficient health services to all South Africans”.
Overall, Jeffery says, “(d)espite some points of difference, there are many commonalities” in the five alternative proposals covered in the @Liberty report.
All agree that the most important requirement for a successful UHC system lies in giving the poor increased access to the country’s effective system of private health care.
“Such access should be financed by the government (either through state-funded
vouchers, as the IRR suggests, or by some variant of these).
“Affordability should be increased by allowing low-cost medical schemes and primary health insurance products, and by either returning to risk rating (the most cost-effective option for most people) or introducing risk equalisation between medical schemes.
“Medical scheme membership and/or health insurance cover should be mandatory for all employees, with premiums for lower-paid employees buttressed by employer contributions for which businesses should be able to garner tax credits.”
(The IRR’s proposal suggests such premiums should also earn points on a voluntary new “Economic Empowerment for the Disadvantaged” or “EED” scorecard, which would be more effective than BEE in helping the poor to get ahead.)
Once millions of South Africans are empowered in this way, “medical schemes and health insurers will have to compete for their custom, helping to encourage innovation and contain costs”.
All five proposals also agree that the efficiency of public hospitals and clinics must be “greatly increased”.
“This requires merit-based appointments, strong internal discipline and accountability for performance, and effective action against corruption and inflated pricing. In the short term, it probably also requires sound public-private partnerships, with the administration of health facilities contracted out to private firms, within the parameters set by the state, through open and competitive tendering processes.”
All five further agree that the supply of health facilities and health providers must be greatly increased.
“Again, reform must start with the removal of current regulatory constraints, so making it easier for the private sector to establish day hospitals and other health facilities. Private institutions could then also start training the doctors, nurses, specialists, and other providers the country so badly needs. In addition, every effort must be made to expand the reach of limited resources through increased efficiency and innovation.”
Finally, all five proposals concur in “recognising (explicitly or implicitly) that the government should focus on increasing the number of South Africans able to take care of their own health needs”.
Fashioning better health policy, as the IRR has emphasised, is inseparable from the wider policy environment and the principles that inform it.
As Jeffery argues, the government “must put the policy emphasis on promoting growth, rather than stepping up redistribution; on attracting investment, rather than threatening property rights; on increasing the quality of education, rather than trying to level it down to the lowest common denominator; and on stimulating the generation of millions of new jobs, rather than deterring employment via ever more onerous regulation”.
With the right policies in place in health and other spheres, the country could start achieving growth rates of 6% to 7% of GDP. Such growth would be “more effective than anything else in expanding opportunities and building prosperity”.
These are also the key building blocks of a wealthier and healthier society, with increased longevity and a better quality of life.
- Morris is head of media at the IRR, a liberal think tank that promotes political and economic freedom
MEDICAL SCHEMES AND HEALTH INSURERS WILL HAVE TO COMPETE FOR THEIR CUSTOM HELPING ENCOURAGE INNOVATION AND CONTAIN COSTS