Vaccination uncertainties ahead, but for now a moment of hope

SA is at a hopeful moment. The first commercial doses of the Covid vaccine are due to land later this month. The next few months should see the arrival of millions of doses of Johnson & Johnson and Pfizer vaccines, if the government signs the contracts and manufacturers deliver on their promises.

Where until now all we’ve had is limited free test doses from J&J, soon we will be able to embark in earnest on the huge task of vaccinating 40-million adults. The government is targeting to get this done by the end of February 2022.

That means scaling up to 250,000-300,000 vaccinations a day, according to Business for SA, which is implementing a plan that could see as many as 150,000 administered by the private sector, in facilities such as pharmacies, GPs’ surgeries, workplaces and occupational health clinics and hospitals. It will also include 10 mass vaccination sites, at stadiums and malls that are being set up to treat at least 50,000 people a day.

Business is putting extensive time and expertise into a detailed plan that will support a rapid rollout and take some of the burden off an overstretched public sector; the government just needs to say yes. It also needs to ensure its IT system — the Electronic Vaccine Data System — is up to the challenge as the vaccination programme shifts from the million or so health workers in phase 1 to the 16.5-million people in phase 2.

It’s going to be complex and probably messy. And if the operational and logistics issues are tricky, so too are the funding issues — not least of which is how to reimburse the private providers for treating publicly funded, uninsured citizens.

The government has set aside about R7bn in the current fiscal year. But medical aids will be required to pay for their own 7-million adult members, as a prescribed minimum benefit. And the government — as the sole procurer and importer of the doses — will set the price at which they will pay for the vaccine doses, a price that is expected to be well above cost, effectively subsidising other non-insured citizens. There is some controversy about the technicalities. But most medical aids, and most medical aid members, support the principle of social solidarity — none of us is safe unless everyone is safe.

And as Discovery’s Ron Whelan emphasises, the returns for the medical aids, and for the country, on investing in an effective vaccine programme are “brilliant” — the GDP multiplier is estimated at five to 24 times each rand spent.

Ironically, too, SA’s medical aid industry can easily afford it, after a year in which the Covid pandemic had the net effect of reducing rather than increasing total health-care spend. It was not just that people were reluctant to go to doctors and hospitals for fear of infection, but also that the mask-wearing, sanitising, social distancing and closed borders (not to mention the lack of air pollution) meant SA didn’t have a flu season — and hospitals saw a 60% reduction in admissions for respiratory conditions, according to consulting actuary Christoff Raath.

Even including the high cost of treating Covid patients, he estimates medical aids “saved” a net 8%-12% of last year’s contributions. Against this, the cost to them of the vaccine would be just 1%3% of a year’s contributions, even if they crosssubsidise some of the uninsured. But it’s not that simple, or that certain. First, because — as Ahmed Banderker, CEO of AfroCentric, which owns Medscheme, points out — the likely scenario is we will need repeated doses or boosters over the next two to three years if the virus mutates. That could be a risk to medical aids’ reserves longer term.

A second big risk, if Covid persists, is the cost not only of treating members who contract the virus, but diagnosing it. Each PCR test costs R850, way more than the R150 or so landed cost of a vaccine dose — another reason the vaccine is such a good investment for medical aids. Discovery Health Medical Scheme (DHMS) alone has funded 1.2-million tests for members — in total SA’s private and public health-care system has funded 12-million — with pathology costs at DHMS up

27% year on year. Others have likely seen similar trends.

A third big uncertainty for medical aids is the low use of health-care services last year, and how much the catch-up will impact on costs this year and in years to come. Members will need the hip replacements or other elective procedures they delayed in the lockdown, and there is the bigger concern that those who didn’t keep up their chronic medication, or delayed mammograms or other preventative tests, will be at risk of much more serious and costly disease in future.

Meanwhile, though, we can wait eagerly for those doses to land.