Discovery is advocating for section 33 of the National Health Insurance (NHI) Bill to be “freed up”, saying NHI will be unworkable without private sector collaboration.
Passed by the National Assembly on 12 June, the Bill still needs to make its way through the National Council of Provinces before being sent to the president to be signed into law.
Once rolled out, which may take another 10 years or even longer, NHI aims to provide for “universal access to healthcare services in the country”. It envisages the establishment of a NHI Fund, which will “purchase healthcare services for all users who are registered with it”.
According to section 33, “a medical scheme shall apply to the Registrar for the approval of any benefit option (if such a medical scheme provides members with more than one benefit option) that constitutes complementary or top-up cover and that does not overlap with the personal health care service benefits purchased by the National Health Insurance Fund on behalf of users as provided for in the NHI Act, 2019.”
Simply put, once the Bill is fully implemented, medical schemes won’t be allowed to provide cover for treatment covered by the NHI plan.
In an interview with senior news anchor Alishia Seckam this week, the founder and chief executive of Discovery, Adrian Gore (pictured), said the funding needed for and the complexity of NHI required private sector collaboration, and if achieved, the Bill could be made workable.
Gore was headlining the latest episode of Think Big – a webinar series that engages prominent “thought leaders” on some of the country’s most pressing issues. The topic under discussion was the future of health care and medical schemes and whether the current NHI proposal would impact schemes and their members.
Gore said that when considering the way forward, much is at stake. Private sector medical schemes have about 9 million members and are used by about 15 to 16 million people.
“You’ve got a private sector that’s made up of thousands and thousands of doctors, 850 different healthcare facilities. It is funded on an egalitarian community-rated basis, and people in that medical scheme cover have prescribed minimum benefits. This is an incredibly powerful asset.”
He added that debates were vital to ensure that the sentiment was right, that investment in health care continued, and that the country ended up with a law that was workable.
“We have thousands of brilliant doctors in the private sector and in the public. We often talk about this stuff in the absence of making sure that we preserve the quality of those people; that we encourage people to go to medical school and qualify. This is not a static thing at a point in time. This is a dynamic thing that influences sentiment. This needs careful leadership as we go forward,” said Gore.
Can South Africa afford NHI?
According to a report by the Solidarity Research Institute, NHI will require an additional R295.93 billion.
The report found that this money could theoretically be generated by abolishing the medical tax credit (about R30 billion) and levying the following taxes:
- A 40% surcharge on income tax.
- Increasing VAT from 15% to 22%.
- A payroll tax of 13.4%.
- Increasing corporate income tax from 27% to 45%.
- A combination of the above.
The government spends about R465 per person per month on health care in the public sector. Gore explained that if a conservative 30% surcharge in income tax is applied and the government does succeed in raising that extra R2bn to R3bn needed for NHI, the average spend in the public sector would increase marginally to about R680 per person per month.
Medical scheme members or those in employment spend about R2 400 per person per month. He said that if a tax surcharge is implemented, taxes for people who are employed would increase by 30%. While the R2 400 per month per person contribution may fall away (if the scope of the private sector medical schemes is restricted by section 33), the government spend that will replace this will be R680. For some, this could translate into spending more for less.
“It illustrates the tragedy of affordability, the kind of the level of inequality in the country. It shows you that it’s not doable without breaking the employment sector. So, it’s not a healthcare issue. It creates a real problem in the economy.”
Gore said in the face of these numbers, for the NHI to be workable, the private sector needs to be retained.
“You can’t say, ‘when the NHI is fully funded, the medical schemes can’t (provide coverage for those things that are covered by the NHI Fund)’. We need their funding, we need more doctors, we need more hospitals. We need more money, not less.”
Hence the advocacy for freeing up section 33.
“Let the NHI Bill go through as it is. It’s got excellent attributes of use, but once it’s fully implemented, let’s then work out the role of the private sector medical schemes, and so on,” said Gore.
Looking ahead
So, what would a workable NHI plan look like?
Gore foresees a blended, multi-funded model.
“You need the NHI structure. And you’ll need medical schemes to be in the funding pool as well, and others, if that’s appropriate. The point we are making is we don’t yet know how to make it work. We’re saying once you get to collaboration, and we work together, there are ways to achieve it.”
However, Gore said getting there would not be easy.
“I don’t think the private sector businesses, or any one man, are saying we understand fully how to do this … these are not simple things, and that’s why our position has been collaboration. Listen and learn, find whatever works, amplify. And do not underestimate the quality of our private system. It is remarkably good. Preserve it, build it. Make it a national asset that is used in this NHI tapestry.”
Low-cost medical scheme options
Another aspect that is playing into the NHI debate is the option of providing low-cost medical scheme options.
Gore said he hoped low-cost benefit options would be an “and”, not an “or”.
“If we can solve that issue and have those (low-cost options) come into the medical scheme structure, we can cover millions more people and take the burden off the state. If we do that, I’m hoping that, over time, that forms part of the tapestry of an integrated NHI.”
Asked whether he anticipated any movement on the progress of these options, Gore said Discovery was still waiting on the Council for Medical Schemes.
“We’re hoping that that can be passed quickly. If that’s done, we can cover many more people in the private sector. I don’t see that as anathema to the NHI. It’s very helpful if we can achieve it.”
Gore said it should be kept in mind that even if the Bill was passed, the law was intergenerational which would evolve over time.
“This is something that’s going to take a decade or more to play out. I think health care is so complex. Anything that works, you need to do and do more of to take the burden of things that don’t work.”
