Page 51 - IRMSA Risk Report 2020

EXPERT OPINION

DR. NICHOLAS CRISP
CONSULTANT: NATIONAL HEALTH INSURANCE (NHI) FUND OFFICE, MINISTRY OF HEALTH

The risk to South Africa is not whether the NHI will work or not. The real risk is doing nothing to both a crumbling, under-resourced, under-performing
public healthcare service and an over-serviced, complex, and increasingly expensive private healthcare system that was, in 2017, accessible to only 8.87m
people. South Africa is ranked amongst the five worst performing health systems in the world based on about 8,5% of GDP spent on health with poor
population health outcomes. At least 45 other countries are in the process of implementing reforms to achieve Universal Health Coverage (UHC), some
through forms of NHI. Every country is different but there are lessons being learnt from one another.

A central healthcare system for all may increase the risks of poor service delivery or corruption. But NHI aims to centralise only the pooled funding while
provision of services will be more decentralised than at present. Now is the right time to implement such a funding system, while society is ‘still raw’ and
trying to staunch the open wounds of state capture. Civil society is going to be super observant and never allow grand theft again. Furthermore, lessons
learnt, and new digital technologies make it easier to prevent and detect theft and fraud.

The Fund will be created as the single strategic purchaser of a clearly defined ‘benefits package’. These benefits will be designed by clinicians and paid
for through capitation (primary health care) and diagnostic related group (DRG) payments for clinical interventions. There will be no more fee-for-
service (FFS). The Fund will purchase from both public and private providers who are certified compliant by the Office of Health Standards Compliance
(OHSC) and accredited by the Fund to provide specified packages of benefits, fit for their institutional capability. By purchasing strategically, the Fund
can systematically reduce over-servicing and improve access to services for under-serviced communities or groups. This Fund could manage payments
to health service providers to a value of as much as R5bn per week in 2026/27. The estimated administration fee of this administratively streamlined
Based on the latest version of the NHI Bill, Gazetted on 26/7/2019 (Gazette no. 42598), it is envisioned that NHI will: create a
system is 3%, which is substantially lower than the present 10 to 12 % administration fee of the private sector. The money will come from redirection of
unified health system by improving equity in financing; reduce fragmentation in funding pools; make health care delivery
part of the budget allocations that are presently made to provincial administrations through the Provincial Equitable Share (PES), from consolidation of
more affordable and accessible, thus eliminating out of pocket payments when individuals need to access health care
several of the existing ‘conditional grants’, and, in due course, from changes to the tax structure which may include a new payroll tax designed to replace
services; and ensure that all South Africans have access to comprehensive quality health care services.
voluntary medical scheme contributions. However, the choice of tax revenue options will reside with National Treasury and will be considered when the
time arrives. There is a need for some additional transition funding to leverage specific changes to the system.
The Fund will have a ‘Procurement Office’ responsible for Health Technology Assessment (HTA), determining what health products it will pay for and for
setting prices for these products. Providers of services will then purchase from any product supplier at the fixed prices.

There is understandable public anxiety about the potential for corruption. Oversight structures will need to be absolutely autonomous and accountable
to the public through Parliament, activities of the Fund will need to be transparent and in the public domain, and administrative systems must be
absolutely secure, must anticipate and prevent risks of fraud, and there must be mechanisms in place to act immediately when there are transgressions.
The Fund has a Fraud and Corruption Unit designed into its organisation and the President has announced an Anti-Fraud and Corruption Forum
comprising all law enforcement agencies in the county to address the challenges in the health sector.

Between now and 2026, the public healthcare services sector
(provincial health departments) requires a significant cash
injection to get the infrastructure and facilities to an acceptable
standard. In parallel, the private sector will need to implement
the recommendations of the Health Market Inquiry into anti-
competitive and collusive behaviour in the private sector that
are essential in improving quality, efficiency, and cost saving
in the private sector. (2019 Competition Commission Report)

The challenge going forward is to insist on an ethos of ‘Service
for All’ and keep consistency in our leadership and succession
planning. The country needs an informed, evidence-based
debate on NHI. We need engaged activists who are prepared
to contribute positively to our country’s vision of providing
healthcare for all of our citizens. There is evidence from across
the globe that improved health status of the entire population
is the single greatest stimulant to economic growth.

Sources: Health Market Inquiry Report, September 2019.
Article by Sasha Stevenson, Spotlight, 23 August 2019.
Article by Mark Heywood, Daily Maverick, 19 August 2019.
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