national health cover edges closer  
15 July 2008

Health Minister Manto Tshabalala-Msimang will present her department’s new policy on national health insurance (NHI) to the cabinet tomorrow.   The ANC has been debating NHI for over a decade, but the project received new impetus last year when the party’s conference in Polokwane identified it as a priority.

Tshabalala-Msimang declined to provide details of the NHI policy, but did indicate that it had yet to be costed. The policy would be made public once it had been approved by the cabinet, she said.
Speaking on the sidelines of the annual Board of Healthcare Funders (BHF) conference, she said NHI was intended to make quality healthcare affordable to more South Africans, and to address rising costs. The BHF is an industry body for medical schemes.

Addressing delegates earlier in the day she said the private health sector had faced an “uncontrollable” cost spiral since the 1980s and was unsustainable in its current form. The most important cost drivers were private hospitals, specialists and administrative costs, she said.  “Annual expenditure on private hospitals was R803 per medical scheme beneficiary in 1997, which increased to R2230 in 2005. Medical scheme contributions too have been increasing from (an average of) R3423 per beneficiary in 1998 to R7807 in 2005 (and) have become increasingly unaffordable”, she said.

Tshabalala-Msimang said some of the legislation required to support the implementation of NHI had already been developed, including the Medical Schemes Act, the National Health Act, and price regulation for medicines. Further amendments to support NHI were in the pipeline, most notably changes to the National Health Act that will pave the way for the government to oversee annual tariff negotiations between medical schemes and healthcare providers.

Health economist Di McIntyre described to delegates the growing gap between the amount of money spent on patients using the public and private healthcare sectors, one of the reasons why the government is keen to implement NHI.  Public spending on health per capita had “flat-lined” in real terms over the past decade, she said, hovering just below R1000. “We’ve just been keeping pace with population growth and inflation, yet the demands have increased dramatically, largely because of AIDS,” she said.

Private healthcare spending per capita had increased 50%, from about R4000 to R6000 between 1998 and 2005, she said. At the same time, growing unemployment and the rising cost of medical scheme membership had reduced the proportion of the population able to afford cover to 14%, from 20% a decade ago.

Tamar Kahn,  www.businessday.co.za