Category: Healthcare Politics and Regulations

Categories : Healthcare Politics and RegulationsTags : 1 Comment

Council for Medical Schemes Approves 5% Increase – but no Details on Low-cost Options

On By ModernMedia

In a media briefing on Tuesday, 8th August, the Council for Medical Schemes (CMS) sought to clarify its process and recommendations over the approved 5% increase to medical aid scheme contributions, levels above which the medical schemes must motivate for. As for low-cost benefit options (LCBO), the CMS indicated that they would only provide a report to the Health Minister by the end of the month. This could prevent medical schemes from applying for new LCBOs in 2023.

Mr Mondi Govuzela, Senior Manager of Benefits Management, explained that the 5% approved increase is based on the Consumer Price Index (CPI) for 2022, which indicated a 4.9% increase. Schemes therefore may raise contributions by 5%, in line with the Reserve Bank’s inflation prediction for 2024. A prudent percentage markup should be incorporated to take into account cost increases and demographic changes, he advised. Before COVID, contribution increases have typically been 2.4–5% above CPI. The years 2020 to 2022 saw contribution increases dip below CPI.

One of the cost drivers that Mr Govuzela noted in the media briefing was supplier pressure stemming from fewer doctors and specialists, who were pushing for higher remunerations. Increased costs elsewhere in the healthcare industry. On the member side, growing rates of chronic diseases, membership ageing and coverage for medical services also added pressure.

LCBO would appear to be a solution for many individuals to access private healthcare for at least some urgent conditions, but the CMS has yet to comply with a Pretoria High Court ruling ordering that they provide a report on their moratorium on granting exemptions to medical schemes to provide LCBO benefits. The case was brought by the Board of Health Funders (BHF).

As to what the CMS’s response to the LCBO ruling was, CMS Registrar Dr Sipho Kabane said that the CMS was preparing a report that would be delivered to the Health Minister “by the end of the month”, but would not be drawn on what it might say. The deadline for registering new benefit options is September 1.

In their circular explaining the decision increase, the CMS acknowledged the persistent macroeconomic headwinds facing medical schemes and their members, with a meagre 1% increase predicted for SA’s GDP next year. “Against the backdrop of the current adverse macroeconomic conditions characterised by multi-year higher interest rates due to stubbornly higher inflation rate, volatile domestic currency and surging energy prices and overall lacklustre economic growth, it is evident that most household budgets will remain constrained for a foreseeable future, leaving most consumers under a precarious financial position. To cushion members of medical schemes against further financial distress and the probable risk of losing their health insurance cover due to affordability constraints, medical schemes are advised to limit their cost increase assumptions for contribution increases for the 2024 benefit year to 5.0%, in line with CPI.”

Categories : Healthcare Politics and RegulationsTags :

Opinion: There are Paths to Quality Universal Healthcare Besides NHI

On By ModernMedia
One of the most damaging aspects of our public discourse on National Health Insurance (NHI) is the mistaken notion in some quarters that the only two options are NHI and the status quo. PHOTO: Rosetta Msimango/Spotlight

By Marcus Low for Spotlight

One of the most damaging aspects of our public discourse on National Health Insurance (NHI) is the mistaken notion that the only two options are NHI and the status quo. Often implicitly, sometimes explicitly, defenders of NHI suggest that any argument against NHI is one for maintaining the current system. Since the current system doesn’t work very well for most people, this line of argument gets some purchase, even though it is based on a false premise.

In his book “Which country has the world’s best health care?”, oncologist and bioethicist Ezekiel Emanuel outlines the key features of healthcare systems in 11 different countries. Two things that stand out are that health systems differ substantially between countries and that most systems are the relatively messy products of complex histories and political and other compromises. This latter point about the path-dependency of healthcare systems is an important point we will return to.

Many varieties

South Africa’s proposed NHI system is sometimes clumped together with systems in other countries such as Canada, the United Kingdom, and Thailand. At times this is fair, at times it skims over important differences.

For example, NHI will be a single-payer system, which is to say, the NHI fund will be responsible for almost all purchasing of healthcare services in the country. In some respects, Canada has a similar system, except that rather than one system for the whole country, they in effect have 13 single-payer systems for each of their provinces and territories. Even Thailand, at times referred to as an example of NHI, technically has three funds rather than one, although it resembles South Africa’s NHI plans in several other respects. In principle, a large single-payer should be able to negotiate better deals than several smaller payers, but on the other hand, having Canada-style provincial funds would be more closely aligned with South Africa’s current governance arrangements and in some provinces, like the Western Cape, chances are people would have more trust in a fund run by the province than in one run nationally.

Another thing that quickly becomes apparent when looking at the variety of healthcare systems out there, is that a simplistic dichotomy between NHI and private healthcare is a false one. Countries like the Netherlands and Germany have achieved excellent health outcomes with systems that are neither NHI-style systems nor examples of the private sector running riot. Though the details are significantly more complicated than this, you can think of the Netherlands and Germany roughly as having many strictly regulated medical schemes (called sickness funds in Germany) with scheme/fund membership being compulsory (with some exceptions). The German system is progressive in that people with higher incomes contribute more than people with lower incomes – an important difference from South Africa’s medical schemes.

Funds in the Netherlands are also not primarily funded directly, as with our medical schemes, but receive funding from a central fund via a risk adjustment process. Both the German and Dutch systems have significant social solidarity built-in in the way it institutionalises the cross-subsidising of the poor by the wealthy.

In South Africa, such a system could, for example, be implemented by dramatically tightening up the regulation of medical schemes, putting in place a progressive mechanism for cross-subsidisation between schemes, making scheme membership compulsory for those who can afford it, and, over time, using tax revenue to pay for scheme membership for the unemployed (although this last element, like NHI, does come with a big question mark on affordability. Those with long enough memories might remember that a system roughly along such lines was on the cards in South Africa around the turn of the century. (see for example the Taylor report of 2002 and this interesting paper.)

Getting to there from here

One striking thing about NHI in South Africa is that for all the column inches, submissions to Parliament, and oral hearings across the country and in Parliament, hardly anyone seems to have shifted their positions in the last decade and there has been very little serious consideration of alternative paths to universal healthcare.

Photo by Hush Naidoo on Unsplash

One reason for this is the sense that the design choices behind the NHI Bill were essentially decided on by a relatively small group of people in the National Health Department and the African National Congress (ANC) around 10 or 15 or so years ago. What followed since then often felt like an attempt at co-opting rather than meaningful engagement. This was particularly apparent in the way some members of the Portfolio Committee on Health continuously pushed people on whether they are for or against NHI, rather than engaging with the substance of people’s submissions. Though the boxes for public engagement were ticked, the reality was often a parody of what such engagement is meant to be.

We could have gone a different route. It would have been entirely feasible to have a process for NHI akin to the much more meaningful set of engagements we had for the Competition Commission’s Health Market Inquiry into the private healthcare sector. In that case, people could make submissions, be heard by the panel, and crucially, one never got the sense that the outcome was preordained. Such a process may in some respects have given government officials and members of Parliament a few more headaches, but it would also have built trust and understanding of the technical issues, and for major reforms like NHI trust and public understanding is half the battle.

Republished from Spotlight under a Creative Commons Licence.

Source: Spotlight

Categories : COVID Healthcare Politics and RegulationsTags :

Supreme Court of Appeal Rejects Appeal Over COVID Vaccine Sale Restriction

On By ModernMedia

The Supreme Court of Appeal has dismissed an application for leave to appeal by Solidarity and Afriforum over a 2021 court case where they challenged a condition by South African Health Products Regulatory Authority (SAHPRA) that the Johnson & Johnson vaccine be restricted to the government. SAHPRA said that this was not a condition that they had imposed.

On 26 July 2023, the Supreme Court of Appeal (SCA) dismissed an application for leave to appeal filed by Solidarity and Afriforum (the Applicants) on the grounds that there is no reasonable prospect of success.

The Pretoria High Court struck Solidarity and AfriForum’s application from the court roll on the grounds of an alleged lack of urgency, and the court also ordered them to pay SAHPRA’s legal costs which was filed in June 2021 by the Applicants, wherein they alleged that when SAHPRA approved and registered the J&J vaccine, SAHPRA imposed a condition that the sale of the J&J vaccine is restricted to the National Government. The applicants argued that SAHPRA was not mandated to stipulate the condition that only the government may purchase the J&J vaccine and questioned the legality of such a condition.

SAHPRA refuted this claim because this is not a condition that SAHPRA had imposed. Subsequently, the applicants proceeded to lodge an application for leave to appeal with the SCA . SAHPRA CEO, Dr Boitumelo Semete-Makokotlela said, “This court ruling indicates that SAHPRA is judicious in adhering to its mandate responsibly. We welcome the outcome of this judgement.”

Categories : Diet and Nutrition Healthcare Politics and RegulationsTags :

Health Activists Make Over 12 000 Submissions on Draft Food Labelling Regulations

On By ModernMedia
These are examples of the proposed new black and white warning labels on food packaging. Photo: supplied

By Mary-Anne Gontsana

Over 12 000 submissions have been collected by Community Media Trust and the Healthy Living Alliance (HEALA) in response to the Department of Health’s draft Regulations Relating to the Labelling and Advertising of Foodstuffs.

The draft regulations were gazetted in January and consumers had until 21 July to comment. These regulations, among other things, propose the mandatory use of new and bolder warning labels on unhealthy food which include items high in salt, sugar, saturated fats and items containing artificial sweeteners.

Community Media Trust (CMT) is a not-for-profit company, mainly focused on health and human rights and has partnered with the Healthy Living Alliance (HEALA), a coalition of organisations focused on nutrition.

In February, CMT and HEALA staged a flash mob as part of the “Less Sugar, More Life” campaign in Cape Town ahead of the Finance Minister’s Budget Speech, advocating for an increase in the sugary drinks tax. They were disappointed by the announcement that the tax would be frozen for two years.

Following a massive media campaign on the draft regulations, CMT and HEALA successfully collected thousands of submissions.

CMT’s co-director Lucilla Blankenberg said the warning labels had been tested with audiences and researchers. If you’re a diabetic shopping for food and there was a clear warning label saying, ‘high in sugar’, the consumer won’t have to spend time trying to work it out because the message is simple.

The proposed warning labels are black and white triangles and would clearly indicate when food is high in sugar, salt and fat or contains artificial sweeteners.

“The reason the food industry is fighting back is because if food has a warning label, it cannot be marketed directly to children. Which means cartoons and animation that will attract children cannot be used to market a food item that has a warning label. If a pack has a warning label they can’t make any health claims whatsoever,” said Blankenberg.

“We won’t see the results immediately, but it will happen over time, especially for the children. With warning labels, it will be easier for parents to avoid buying certain food,” said Blankenberg.

HEALA’s communications manager Zukiswa Zimela said conversations proposing front of pack warning labels started in 2016.

Zimela said research for the campaign was initially done by the University of Western Cape to determine which foods qualify to have front of pack warning labels. She said the research gave more insight into what consumers thought of the current information on packaging as well as what the new warnings should look like.

“We started the campaign in May and went to eight provinces, mainly to educate and inform communities about the importance of front of pack warning labels and the food they were eating,” said Zimela. She said they found that many consumers agreed that they did not understand the nutritional information on food packaging.

She said the food industry had used scare tactics like saying warning labels would cause job losses which was “completely untrue”.

“This is not something new, warning labels have been done in other countries like Chile, Mexico, Peru and Columbia and there has been no evidence that jobs have been lost because of it. This is just undermining the government’s plan to get people to eat better.”

Zimela said HEALA will be monitoring the responses to the regulations. “Should the regulations be implemented, we need to make sure that they are not watered down or seen as useless.”

Sugar industry warns against “demonising sugar”

The South African Sugar Association (SASA) told GroundUp it had also submitted comments on the draft regulations, and that the front of pack warning labelling system was of particular concern to the industry.

SASA executive director, Trix Trikam, said: “The objective of this system is to encourage the reduction of energy/calorie intake, saturated fat and salt to prevent obesity and non-communicable diseases.

“It is well known and there is evidence that sugar is not the sole contributor of kilojoules to the diet and should therefore not be singled out in a regrettable out-of-context manner,” he said.

He said the warning labels should not be done in a sensationalist or alarmist manner “which seeks to demonise sugar” because that would have “a significant adverse impact on the sugar industry”.

Trikman suggested that the warning labels should instead reflect the calories in a food product. “SASA is also not convinced that the perceived cut-off values for sugar is evidence-based. A possible solution to that would be to use the perceived cut-off values based on percentage of energy value and not the amount of sugar per volume of product,” said Trikam.

“The draft regulations make it mandatory for a warning symbol to be placed on the front of pack labels for foods that exceed a perceived cut-off value for sugar. In order to avoid the warning symbol for sugar, food manufacturers will seek to find ways of removing sugar from their products. This will lead to a decrease in the demand for sugar and will ultimately negatively impact the livelihoods of those dependent on the sugar industry in the deeply rural areas of KwaZulu-Natal and Mpumalanga.”

Trikam said SASA is concerned about the obesity rates in South Africa but added that the solutions should be evidence-based.

Disclosure: GroundUp was once a project of, and still has a close relationship with, Community Media Trust.

Republished from GroundUp under a Creative Commons Licence.

Source: GroundUp

Categories : Healthcare Politics and RegulationsTags :

High Court Ruling Paves the Way for Affordable Medical Scheme Benefits in South Africa

On By ModernMedia
Photo by Bill Oxford on Unsplash

The recent judgement by the Pretoria High Court in favour of the Board of Health Funders (BHF) carries substantial implications for medical schemes in South Africa. This follows BHF’s court application, which sought to compel the Council for Medical Schemes (CMS) to give a complete record, providing light on the LCBO’s decision-making process thus far.

The Court ordered the Minister of Health and the CMS to provide all of the papers listed in Rule 30A within 10 days of receiving the applicant’s notice of motion. The completion of this crucial milestone hinges on the provision of several documents, which we eagerly await.

This significant victory brings us closer to the ultimate goal of granting Medical Schemes exemptions to offer Low-Cost Benefit Options (LCBOs), which aim to provide greater access to affordable medical scheme benefits for low-income earners. The BHF’s success aligns with the mission of improving
healthcare accessibility and advancing progress towards universal healthcare coverage (UHC) in the country.

In the main application lodged on 8 August, the BHF requested the High Court to:

  • Lift the moratorium that prevents medical schemes from offering LCBOs when the Council for Medical Schemes (CMS) refuses to grant applications for exemptions to medical schemes, pending the finalisation of LCBO guidelines.
  • Declare the failure by the respondents to develop and implement LCBO guidelines as irrational, unreasonable, and unlawful, as per Section 6 of the Promotion of Administrative Justice Act and Section 1(c) of the Constitution.

The BHF represents the majority of the country’s medical schemes and healthcare funders, encompassing schemes and administrators serving nearly 4.5 million individuals.

According to Charlton Murove, the protracted process of crafting a framework for Low-Cost Benefit Options has taken over seven years and is yet to be finalised. Many policymakers have criticised medical schemes for their lack of affordability. The proposed solution aims to address these concerns and move closer to the principles of UHC, ensuring that the healthcare system grants everyone access to quality and affordable healthcare.

Murove stated, “This application seeks to drive a progressive agenda for the public and private healthcare sectors, fostering collaboration to alleviate the current challenges in our healthcare system. The Council for Medical Schemes and the Minister have pivotal roles in implementing policies that enhance access to healthcare. However, progress with LCBOs has been hindered by the CMS’s failure to take the necessary steps for reform, despite the publication of demarcation regulations in 2016.”

The BHF’s victory in the High Court represents a significant step forward in the pursuit of affordable and accessible medical scheme benefits. By addressing the current burdens faced by the state and ensuring that medical scheme premiums remain affordable, we can strive towards a healthcare system that benefits all South Africans.

Categories : Healthcare Politics and RegulationsTags :

Funding the NHI: ‘Political Suicide’ and Tax Revolts

On By ModernMedia
Photo by Jp Valery on Unsplash

According to a 27-page ‘factsheet’ purportedly produced by the Department of Health and the Presidency, the National Health Insurance (NHI) scheme would be funded through a payroll tax and additional personal income taxes. There are however better ways to go about this, according to a number of experts who weighed in on the topic.

Professor Alex van den Heever said that the payroll tax plan is misguided, according to Daily Investor. In the same vein as Unemployment Insurance Fund (UIF) payment, both employers and employees would make contributions to a payroll tax.

But Van den Heever criticised this, saying that those who suggested this do not have the qualifications to make financial comments such as NHI funding.

“They talk of introducing payroll taxes. You don’t introduce payroll taxes for a general government allocation,” he explained. “Payroll taxes are for contributory systems where you get a specific benefit or entitlement for what you contribute.”

The term “payroll taxes” in relation to funding NHI does not make sense, he said. Discussions on raising taxes and a new payroll tax shows that the government does not know how to fund the NHI.

He called them an “incredibly naïve set of fiscal proposals that you cannot even consider implementing,” and that they were “incoherent from a public finance perspective.” Introducing them as is would be politically suicidal: the tax base is already overburdened, and raising taxes beyond a certain point results in a reduction in taxes actually collected.

“It is very dangerous to overstress your tax bases. We are hitting the limit on the amount you can fund the government and the public health system from taxes.”

Huge tax increases needed to fund NHI

Van der Heever’s viewpoint is shared by Connie Mulder, Solidarity Research Institute head and Ryan Noach, Discovery Health CEO.

Mulder said trying to fund NHI through additional taxes is unfeasible because of the tremendous amount of money needed.

Mulder said that the massive additional taxation would “crush South Africa’s economic outlook.”

It is naive for the Department of Health to assume that medical aid contributions will be funnelled into a national health insurance scheme, said Noach. The NHI scheme would force South African taxpayers to pay much higher taxes but cut their healthcare entitlement by 72%, and would provoke a tax revolt.

South Africa has a unique situation where a very small tax base of 5.5 million people funds nearly all government expenditures, accounting for 80% of public healthcare funding, he said. Notably, their after-tax disposable income is used to pay medical aid and private healthcare.

The single-funder model described in the NHI Bill would not be able to achieve the government’s goal of equitable access to healthcare, Noach told Daily Investor. This is a model which Discovery Health does not endorse, calling it not only “risky and inefficient” but also not likely to be equitable because “cross-subsidies cannot be properly managed”.

He reiterated earlier comments where he said that the NHI Bill would have no immediate impact on medical schemes, but once it is fully implemented (with “implemented” remaining undefined), medical aid schemes would only be allowed to offer what is not covered under the NHI – at the discretion of the Health Minister. This would make NHI a single monopolistic funder for the NHI package of services, which he had said in an earlier interview with Newzroom Afrika was without a parallel anywhere in the world. 

Even though implementation is a decade away, this is going to drive off health sector investment, Noach said.

Noach recommended a multi-fund framework, which he described as “not only less risky and faster to implement, but also ensures that cross-subsidies are managed to ensure that social solidarity is achieved”.

Collaboration between the private and public sectors is the only way financial integrity and sustainability is achievable, something which has been built on the successful COVID-19 partnerships.

NHI ‘charade’ – but Obamacare offers an alternative

Business Leadership South Africa CEO Busi Mavuso has a similar view – and didn’t mince her words. According to Mavuso, NHI as currently envisaged, was a “charade” without any thought to funding, according to Moneyweb. One that would leave all South Africans worse off, and recommends instead a private-public partnership.

She also pointed to the public–private partnership behind South Africa’s COVID-19 response. The two entities sourced resources, rolled out vaccines and funded other interventions.

“It was a clear demonstration that national health outcomes are achieved faster and more efficiently when government and business work together, drawing on their respective strengths,” she said.

“With the right incentives, the private sector can complement government efforts, speed up the investment needed and reduce costs to the state and users.” 

One viable alternative to the NHI’s single buyer model was the US’ Affordable Care Act (aka Obamacare) in the US, wherein health insurers provide minimum cover, with the state subsidising those below a certain level. Insurers are however able to compete to offer coverage.

One other disadvantage of South Africa effectively ending the private sector was that it would discourage internationally mobile businesspeople from working in the country.

Categories : Healthcare Politics and Regulations Medical IndustryTags :

National Health Insurance: Finding a Healthcare Solution that Serves All South Africans

On By ModernMedia
Photo by Hush Naidoo Jade Photography on Unsplash

The Passing of the National Health Insurance Bill on 12 June 2023 by parliament has many stakeholders in the healthcare industry concerned as to what the implications are.  The reality is that there is a long and challenging process ahead, and the NHI Bill has many years to go before all of its provisions could be implemented.  

Putting all the challenges and debate aside, Jacqui Nel, business unit head of healthcare at Aon South Africa, highlights the salient points that are at the heart of the matter. “First and foremost, I would like to affirm that the private healthcare sector needs to focus all its efforts on objectively collaborating with all parties concerned to achieve a stronger and affordable healthcare solution for all South Africans. The concept and ideals of providing universal health coverage should not be in dispute.”

“The overarching principle of the NHI bill is to provide universal health coverage and social solidarity, providing all citizens with access to the same essential health care benefits, regardless of their financial means,” she adds.

However, the road to successfully implementing NHI is a long and costly one, with many experts saying it can take up to 15 years to achieve, if not more. Purely from a legislative point of view, there are no less than 11 pieces of legislation that will need to be amended to align with NHI objectives, and this is an onerous process. 

This includes:

  • National Health Act
  • Mental Health Care Act
  • Occupational Diseases in Mines and Works Act
  • Health Professions Act
  • Traditional Health Practitioners Act
  • Allied Health Professions Act
  • Dental Technicians Act
  • Medical Schemes Act
  • Medicines and Related Substances Act
  • Nursing Act
  • And various Provincial Health Acts.

The first of many court cases are already making headlines. “On the constitutional front, one of the 11 pieces of legislation requiring amendment is the National Health Act, which governs the ‘Certificate-of-Need’ (CoN), a piece of legislation that would dictate to private sector doctors where they are permitted to practice and what services they may provide. This ‘CON’ is essential to government to control doctors under the NHI plans and is being challenged by trade union Solidarity and six other parties,” says Nel.

About the NHI Bill

The NHI Bill lays out the duties and functions of the NHI Fund, which are primarily to strategically purchase health care services based on the principles of social solidarity. All permanent residents and citizens will be eligible as beneficiaries of the “Fund” as it is referred to; and temporary residents and foreigners will have access to emergency medical treatment and access to other health services as determined through a mandatory travel insurance.

“The Bill states that eligible beneficiaries will be able to access health services through registering as a user of the “Fund”. Each member will have a number that is unique to them and their dependents. The Fund will then reimburse health care providers directly for services rendered, provided they have met the accreditation requirements. It is envisaged that comprehensive health services benefits must be made available and these services will be determined by the Benefits Advisory Committee,” explains Nel.

The Bill also refers to the establishment of the ‘Board of the Fund’, and the remuneration and reimbursement of the members of the Board which will be determined by the Minister of Health in consultation with the Minister of Finance.  “There are various other functions of the fund for which further administrative departments will need to be set up to address planning, benefits design, price determination, accreditation, purchasing and contracting, payments, procurements, performance monitoring and a risk and fraud prevention unit,” says Nel.

However, there are major points of concern that remain and will need to be addressed to facilitate any implementation of the NHI into South African society, which include:

  • Ministerial powers, good governance and accountability.
  • Role of the different spheres of government.
  • Role of medical schemes.
  • Tax implications for taxpayers, both from an employee and employer perspective.
  • NHI funding models – increased taxes?
  • Health financing expertise.
  • Training of healthcare providers – consequence management.
  • Service delivery at state facilities and healthcare facilities.
  • Infringement on the right of choice.
  • Lack of detail around major parts of the NHI Bill.

In summary, this Bill is the roadmap to NHI, but many other pieces of legislation will have to be amended, and a crucial element is currently still missing which is the cost of NHI and what the basket of services will include.  “To enable the NHI will require an appropriation bill from National Treasury to detail how the NHI is going to be funded. However, detail on this has been slim, while government’s finances are heavily constrained and look likely to worsen in the future with various global and local factors coming into play,” says Nel.

“We fully expect that there are going to be significant challenges to the many technical and restrictive provisions contained within the NHI Bill, and these challenges may well alter its entire substance, and there is also the prospect of political shifts that could have a material impact on health policy going forward.  We simply do not see any material shifts to the private healthcare sector anytime soon,” Nel explains.

What is certain is that the Bill in its current shape and format is unlikely to remain as it is today.  “While the NHI Bill raises serious concerns, there is no disputing the need for structural change. There will be much debate and negotiation in the years ahead in unpacking the strengths and weaknesses of current public and private healthcare systems, and we look forward to a rational and workable solution to the achievement of better healthcare and to assist in a workable solution for all South Africans,” Nel concludes.

Categories : Healthcare Politics and RegulationsTags :

A Legal Look at The National Health Insurance Bill

On By ModernMedia
Photo by Tingey Injury Law Firm on Unsplash

By Martin Versfeld, Prelisha Singh, Glenn Penfold & Robert Appelbaum, Partners at Webber Wentzel

With the National Health Insurance Bill having recently been approved by the National Assembly, many questions and concerns about the practical implementation of the scheme remain unresolved.

The National Health Insurance Bill (the Bill) was recently adopted by the Parliamentary Portfolio Committee on Health and was approved by National Assembly on 14 June 2023. It will now be tabled before the National Council of Provinces.

The Bill provides for the establishment of the National Health Insurance Fund (the Fund) aimed at promoting the laudable purpose of universal access to quality health care. It is envisaged that the Fund will purchase health care services and products from accredited health care service providers and health establishments (including hospitals) (which we refer to, collectively, as “service providers”), including private service providers that choose to contract with the Fund.

Many stakeholders and experts have raised concerns that the National Health Insurance (NHI) scheme envisaged in the Bill is simply unaffordable, particularly as it would require an extensive administrative apparatus. A related concern is the extent to which the NHI will rely on the public health care system to deliver services, and the capacity of that system to provide an acceptable quality of services. Given the dire state of public health care in our country, it is surprising that the Government persists with plans to spend vast resources on implementing the NHI. Those resources would greatly improve the delivery of quality health care – and universal access to that care – if they were deployed directly in the public health sector.

In view of the questions about the affordability of the NHI, the provisions of the Bill providing for the income of the Fund are of particular interest.  Clause 49 states that the Fund’s chief source of income will be money appropriated annually by Parliament. This must be appropriated from collections of, among others, general tax revenue, a payroll tax and a surcharge on personal income tax. This taxation regime is, however, difficult to reconcile with clause 2, which states that the Fund will be funded through “mandatory prepayment” (a term that is defined as “compulsory payment for health services before they are needed in accordance with income levels”), and clause 55(1)(t), which empowers the Minister to make regulations on “all fees payable … to the Fund”.

One of the challenges in interrogating the NHI scheme envisaged in the Bill is that it leaves many of the key issues to be determined later.  For example, the extent of the benefits to be covered by the Fund and the rate of reimbursement – both of which are crucial to assessing both the affordability of the NHI and its impact on the provision of quality health care – are not yet known (eg see clause 10(1)(g)).  The Bill also leaves a broad range of matters for the Minister of Health (the Minister) to prescribe through regulations. These matters include the rules on portability, which will allow patients to be treated by service providers other than those with whom they are registered (clause 7(2)(b)); the referral pathways between service providers (clause 7(2)(d)(ii)); the coding systems to be employed (clause 39(5)(b));  the relationship between the Fund and medical schemes (clause 55(1)(n)); and “the scope and nature of prescribed health care services and programmes and the manner in, and the extent to which, they must be funded” (section 55(1)(w)).

The Bill’s preamble states that its purposes include to “create a single framework … for the public funding and public purchasing of health care services, medicines, health goods and health related products” and to “eliminate the fragmentation of health care funding”. A key question that arises is what role medical schemes will continue to play and, indeed, whether they will be able to continue to exist. Clause 33 of the Bill stipulates that, once the Minister has determined that the NHI has been fully implemented, medical schemes “may only offer complementary cover to services not reimbursable by the Fund”. Similarly, clause 6(o) states that users of health care services are entitled to “purchase health care services that are not covered by the Fund through a complementary voluntary medical insurance scheme”. In other words, medical schemes may not cover health care services that are covered by the Fund. Since the Fund is intended ultimately to cover a comprehensive range of benefits, the Bill envisages that the businesses of medical schemes will shrink dramatically which may, of course, threaten their continued existence.  This regime is likely to face constitutional challenge, including on the basis that it infringes: (a) the right to access health care services, by forcing many people who currently access private medical care via medical scheme funding to rely on what is currently a woefully inadequate public health care system; (b) the property rights of medical schemes and their administrators; and (c) the right to freedom of trade, occupation and profession.

Another crucial issue is how the Bill will regulate accredited service providers. Clause 39(2) imposes onerous requirements for accreditation, including the submission of a “budget impact analysis”. One area of concern, as mentioned above, is that the Bill does not clarify how reimbursement rates will be determined. Clause 10(1)(g) simply states that the Fund must set payment rates annually “in the prescribed manner and in accordance with the provisions of this Act”. Given its importance to sustainable access to health care, one would at least have expected the Bill to make clear that the payment rates must be set at a level that allows providers to cover their efficient costs and make a reasonable return. Another cause for concern is that clause 38(6) envisages that an accredited service provider must procure health-related products (including medicines and medical devices) according to the Fund’s formulary, and that suppliers listed in the formulary must deliver directly to the service provider or establishment. To the extent that this clause requires private service providers to procure from suppliers chosen by the Fund, this blurs the line between public and private procurement, reduces competition, and unduly restricts private service providers in the conduct of their business.

The role that the Bill contemplates for the Minister is also potentially problematic.  For example:

  • Clauses 4(1) and 7(1) provide that the Fund must purchase health care services “in consultation with the Minister” (which our courts have held means that the Minister’s concurrence is required).  It is wholly impractical to require the Minister to concur in the purchase of health care services.
  • It is unclear to us why the Minister must agree on detailed issues that require the application of clinical judgement, such as the benefits to be determined by the Fund’s Benefits Advisory Committee and the formulary to be employed by the Fund (clauses 25(5)(c) and 38(5)).

While seeking to secure universal access to quality health care is generally supported and rightly so, the Bill represents an over-hasty effort to fundamentally restructure the country’s public health service with potentially devastating consequences for healthcare providers and consumers alike.

Categories : Healthcare Politics and Regulations Medical IndustryTags : 4 Comments

‘No Need to Panic’ Over NHI, Says Discovery CEO

On By ModernMedia
Photo by Hush Naidoo on Unsplash

On Tuesday, June 13, South Africa’s National Assembly approved the National Health Insurance (NHI) Bill, signing this new law into effect in the face of strong expert objections. The CEO of Discovery Health, Dr Ryan Noach, said that at the moment there is “no need to panic” over NHI, although overwhelming negativity was a major concern. . This was reflected in Quicknews polls results, with 98% of respondents expressing skepticism over NHI implementation.

Speaking in an interview with Newzroom Afrika, he responded to comments that the implementation of the NHI would devastate the private healthcare sector, which he said “sounds like a panicky reaction”.

While he did not say that NHI implementation would be without consequences, the chief executive of the country’s largest private medical scheme reminded viewers that, even with NHI as promulgated now, there was still a long way to go before there was any impact on private healthcare schemes or systems.

Health Minister Dr Joe Phaahla hailed the Bill: “This is one of the most revolutionary pieces of legislation presented to this house since the dawn of our democracy in 1994.” Briefing the media, he was bullish on existing issues of corruption and mis management in healthcare, saying “Those issues must be dealt with.” He pointed to a number of “good examples” of institutions.

But serious questions about the impact, implementation and feasibility of the extraordinarily expensive and far-reaching Bill have yet to be answered.

The impact of Section 33

Dr Noach noted that one important point regarding the Bill is Section 33, which “talks about the full implementation of NHI before any impact on medical schemes.” Essentially, the NHI would have to be fully in place before the healthcare and health insurance sectors would be affected.

He added that the Department of Health’s expected that NHI would take some 10 to 15 years to fully implement after its promulgation. Speaking with the experience of a scheme that provides for 4 million people, he said that it is already a huge amount of work, and the task of catering to the entire population of South Africa would be even greater.

Dr Noach notes that as for the necessary financing bill for the NHI, it is nowhere to be seen. Little said about it by the Treasury, which has only noted that it is “nascent”. As the population contributes GDP of 8.5% to healthcare, the assumption seems to be that this 8.5% would simply be redirected into a NHI scheme, which is not likely to happen.

Medical funds are contributed from medical schemes after tax, are well-protected by schemes, and as trust funds they essentially belong to the members. By law no-one can take away access to those funds: it would be like taking away people’s pension funds.

No parallel with any other country’s public health scheme

This singular NHI fund would essentially be a monopoly, and there were also no other examples of this to be found anywhere in the world. Even with the UK’s NHS, 12% of the population opts for private medical insurance. No other countries exclude by law the participation of private insurance and private funders. The annual spend would be R500bn to R700bn, and the NHI would disburse this to about 100 000 healthcare providers – assuming that the healthcare market would remain in its present form, which would likely suffer.

The biggest short term risk of the Bill would be the emigration of skilled healthcare professionals from a very negative sentiment emerging among in that grouping.

Meanwhile, those working in the public sector are battling under corruption and a lack resources while those in the private sector are extremely concerned. According to a Quicknews poll which ran for the month of June, 97.78% of the 90 respondents agreed with the South African Medical Association’s objections to the Bill.

In early 2022, a Quicknews poll had found that 81% of respondents had either considered emigrating due to the NHI Bill or were actively planning to do so.

Dr Noach says that “we are doing everything we can to calm the health professionals, partner them and work with them and reassure them, because we do believe that the outcome here could be optimistic.” A version of NHI would be welcomed.

As for the eventual fate of medical aid scheme under Section 33, once the Minister determines that NHI is fully implemented (and it is unclear how that would be determined), only those services not covered by NHI would be covered by medical aid schemes – though there is no indication at this stage of what would be covered.

An alternative approach to NHI

Before this can even be implemented, the government needs to find R200 billion to fix the public healthcare system, something which Dr Noach applauds as a priority.

He described an alternative NHI, with policy reform one in both private and public healthcare to create a “multi-funded environment”, something which Discovery’s actuarial work had found to be a better fiscal option. The NHI has many favourable qualities, which are smart and feasible, he continued.

The current monopolistic approach to NHI would create a single pot of money which would be the largest fund in the country by far – with its attendant risks.

Notes: Updated to reflect latest Quicknews poll results and to include Dr Joe Phaahla’s comments on the Bill.

Categories : Ethics and Law Healthcare Politics and RegulationsTags :

124 Fake Doctors Arrested, Minister of Health Says

On By ModernMedia
Photo by Tingey Injury Law Firm on Unsplash

Minister of Health Dr Joe Phaahla has confirmed the arrest of 124 fake doctors as a result of a crackdown by the Health Professions Council of South Africa (HPCSA), reports IOL. He revealed the information in a response to a parliamentary question.

He said that the doctors were able to avoid the system by taking cash payments, or working in the practices of registered doctors. Dr Phaahla noted that it was a criminal offence to practice medicine without being registered.

The arrests came as a result of the HPCSA establishing an Inspectorate to crack down on illegal practising medical workers. The Inspectorate currently has offices in all of South Africa’s provinces save Northwest and Northern Cape.

The relevant section of the Act reads [PDF]:

  1. (I) No person shall be entitled to practise within the Republic–
    (a) the profession of a medical practitioner, dentist, psychologist or as an intern; or
    (b) except in so far as it is authorized by the provisions of the Nursing Act, 1957 (Act No. 69 of 1957), the Chiropractors Act, 1971 (Act No. 76 of 1971), the Pharmacy Act, 1974, and sections 32, 33, 34 and 39 of this Act, for gain any other profession the practice of which mainly consists of-
    (i) the physical or mental examination of persons;
    (ii) the diagnosis, treatment or prevention of physical or mental defects, illnesses or deficiencies in man;
    (iii) the giving of advice in regard to such defects, illnesses or deficiencies; or
    (iv) the prescribing or providing of medicine in connection with such defects, illnesses or deficiencies,
    unless he is registered in terms of this Act.

Source: IOL