National Health Insurance in South Africa
Government Documents on National Health Insurance
The purpose of this series of policy briefs on National Health Insurance (NHI) and the related IMSA web-site is to put in the public domain material and evidence that will progress the technical work of developing a National Health Insurance system in South Africa. This includes tools for costing NHI and evidence on where savings could be achieved in moving to a future mandatory system with universal coverage.
An initial background brief covered NHI developments from the 1940s up to December 2008 and a separate brief provides resources on the debate around mandatory insurance in South Africa during 2009. This brief covers developments during 2010.
The year began slowly with research being produced by many groups, but still no official documents on the NHI proposals. In late September the ANC released a document on the proposals, the first document in the public domain since the decision to forge a different path on NHI, taken at the ANC Congress in Polokwane in December 2007. This is still an ANC party document and there are no Government documents on NHI in the public domain.
In the last quarter of the year there has thus been substantial media coverage of NHI again and there have been several commentaries and evaluations of the proposals. A number of models of costing NHI have been made public during the year and research on mandatory health systems (NHI and SHI) has been made available.
The first ANC proposals were handed to the Department of Health for further development in late June 2009. There are still no documents by Government in the public domain on the detailed NHI proposals under development. The Ministerial Advisory Committee (MAC) on NHI has been meeting since late 2009 but has also not released any public documents. All that is available are hints from speeches by the head of the MAC, the Minister of Health and the Minister of Finance, as reported below. These are often contradictory, reflecting the intense debates taking place within Government on NHI.
State of the Nation Address by President Zuma, 11 February 2010
“Honourable members, Another key outcome is to ensure a long and healthy life for all South Africans. We will continue to improve our health care system. This includes building and upgrading hospitals and clinics, and further improving the working conditions of health care workers. We have partnered with the Development Bank of Southern Africa to improve the functionality of public hospitals and their district offices. We are also collaborating with the DBSA and the Industrial Development Corporation, in a Public-Private Partnership programme to improve hospitals and provide finance for projects.”
“Honourable Members, We must confront the fact that life expectancy at birth, has dropped from 60 years in 1994 to just below 50 years today. We are therefore making interventions to lower maternal mortality rates, to reduce new HIV infections and to effectively treat HIV and tuberculosis. We will also reduce infant mortality through a massive immunisation programme. We will reinstate health programmes in schools. We will implement all the undertakings made on World Aids Day relating to new HIV prevention and treatment measures. Intensive work is underway to ensure that this work is on schedule.”
“We will also continue preparations for the establishment of a national health insurance system.”
The Government Gazette GG32564 of 11th September 2009 announced the formation of the National Health Insurance Advisory Committee. MAC is to advise the Minister of Health on the development of policy and legislation relating to the introduction of NHI. A committee has been appointed and Gazette gives the terms of reference and allows for remuneration of committee members.
The appointments to the NHI Advisory Committee were announced on 5 November 2009 by the Minister of Health. The Committee is chaired by Dr Olive Shisana. Health-e News provided a short summary of the experience of each of the 25 committee members, see:
http://www.health-e.org.za/news/article.php?uid=20032555
The MAC has been meeting regularly since its inception but has not released any documents for public discussion or information. One of the sub-committees formed was to deal with the costing and pricing of NHI and this sub-committee is chaired by Mark Claassen of Price Waterhouse Coopers.
NHI tax deductions to start soon – Shisana
Tim Cohen of Business Day reported on 8 October 2010:
“Tax deductions for the National Health Insurance (NHI) may start in 2012, even if rural areas only were going to benefit initially. “Every single South African is going to be making a contribution,” chairwoman of the ministerial advisory committee dealing with implementing the NHI, Olive Shisana said. Government needed at least another R11bn to start implementing the NHI by 2012, she said.”
“But, government has said the NHI would be phased in over 14 years, with rollout starting in 2012 in under-served rural areas. Asked when the NHI taxation would start, Shisana replied: “There is a shortfall of R11 billion in order for us to be able to start... it becomes obvious... [that taxation] will start in 2012... . “I’m saying we’re expecting to fill the gap in 2012, but if the economy grows very well, you never know. I’m sure it [when taxation will start] will be in the legislation,” she said.”
“Shisana was addressing the media at a press conference in Johannesburg, where the SA Medical Association (SAMA) was hosting a health conference.”
“Earlier, health department Director General Malebona Matsoso, said the public would not yet see a dramatic difference in the health system in 2012. “We don’t have a big bang approach,” she said. The NHI would start in 2012 with health teams visiting people in rural areas to assess their health needs and provide transport to health facilities if necessary. Also by 2012, government planned to have all vacant posts in the public health system filled, Matsoso said.”
Statement by the Minister of Health, Dr Aaron Motsoaledi, on the National Health Leaders' Retreat 2010
[See also report under Research: Kaiser Family Foundation] http://www.doh.gov.za/docs/sp/sp0126-f.html
“We gathered as the National Health Leadership together with International Experts from more than eight different countries chosen because those countries have experience in dealing with many of the major health policy challenges we, as South African, are also faced with. Specifically, we worked on developing a shared vision and collective purpose on how we as the national health leadership will drive our priority health agenda for the next five years. As you are aware, these priorities find expression in the 2009 - 2014 Ten Point Plan. We specifically recognized and recommitted to the priorities of the National Health Insurance (NHI), full implementation of the National HIV and AIDS Plan, an improved Quality and Efficiency across the public health system. We determined that the yardstick against which our plans and progress should be measured are expenditure control, equity and efficiency.” ...
“We also recognized that while we are progressing on national macro-policy priorities such as the NHI, we must effect immediate and evident improvement in Quality and Efficiency particularly at Primary Health Care level. ... We, as the national health leadership, resolved to proceed with transparency and accountability recognizing the need to balance short-term deliverables with our long-term policy priorities.”
The Kaiser Family Foundation hosted that event and prepared an analysis of health and healthcare over the period 1994-2010. The report is available on:
http://www.doh.gov.za/docs/reports/2010/overview1994-2010.pdf
The Department of Health Ten Point Plan is available at:
http://www.doh.gov.za/docs/misc/tenpointplan09.pdf
New Deputy Minister of Health
The industry grieved the loss of the Deputy Minister of Health, Dr Molefe Sefularo, who was killed in a car accident on 5 April 2010. Val Beaumont of IMSA said “He will be remembered as a strong and impactful leader who worked tirelessly to take the important health agendas forward.”
Zackie Achmat described him as “a man of courage and integrity”. See
http://writingrights.org/2010/04/05/dr-molefi-sefularo-a-man-of-courage-and-integrity/
It was announced on 31 October 2010 by President Jacob Zuma that former Tshwane mayor Gwen Ramokgopa was to be the new deputy health minister.
On 1 November 2010, Tamar Kahn of Business Day wrote: “Dr Motsoaledi has been without a deputy since Molefi Sefularo was killed in a car accident on Easter Monday. Having delegated a wide range of tasks to Dr Sefularo, the health minister told Business Day recently that it had been “tough, very tough” to be without a deputy for the past six months.” “Dr Gwen Ramokgopa qualified as a medical doctor in 1989 . She also has a master’s degree in public health administration, which she obtained in 2007. She was Gauteng’s health MEC for seven years, from 1999 to 2006, after which she was appointed mayor of Tshwane.”
New Director-General of Health
The Cabinet meeting in Cape Town on 21 April 2010 confirmed the appointment of Ms Malebona Precious Matsotso as the new Director-General in the Department of Health (see http://www.info.gov.za/speeches/2010/10042210351001.htm ) IMSA welcomed the appointment of Ms Matsoso, saying “we look forward to co-operating with her and the Department in the implementation of the Strategic Plan for Health”.
National Health Insurance Implementation
Business Day reported on 14 October 2010:
“Government’s ambitious plan to establish the National Health Insurance (NHI) scheme will be tested in rural areas from 2012. The health department is planning to pilot the ANC-mandated policy for universal health care before extending it to the rest of the country over the next 14 years.” ... “The NHI will be publicly funded and publicly administered and government promises it will provide quality health care, free at the point of service.”
“Health minister Aaron Motsoaledi says eight critical districts will be the first to benefit. “NHI implementation is not an event, but the beginning of a gradual process,” he says . “It is not aimed at abolishing private health care. Private hospitals can choose to offer NHI, but they must have primary health care as one of the basic provisions.” A launch in rural areas is based on global best practice , Motsoaledi says.”
“The health department has identified six focus areas to be fast-tracked over three years to aid the implementation of NHI — improving the values and attitudes of staff, managers and patients; cleaning hospitals and clinics; reducing waiting time ; keeping patients safe and providing reliable care; preventing infections ; and ensuring medicines, supplies and equipment are available. Motsoaledi says the basics of health care service practice, such as cleanliness, are not always observed. “SA public hospitals’ cleanliness is not up to standard, and the attitudes of health-care workers, not only in public but also in private hospitals, need to improve.” ...
“Hospitals and clinics will have to meet quality standards before receiving NHI accreditation. An independent quality commission will be established within the next five years to measure shortcomings at institutions and improve them. A points system is being proposed to identify top and low-ranking hospitals. Last week the department held a national consultation on health quality and participated at a SA Medical Association conference on measures required to repair SA’s ailing health services.”
“The health ministry is working with other countries, including the UK, to identify what SA needs to consider before implementing the NHI.” Former NHS chief executive Nigel Crisp says the UK model is not perfect. “The implementation of universal health service is a long journey that needs partnerships and it has setbacks.”
“Treasury and the SA Revenue Service are devising a funding model for the NHI. This financial year government allocated R105bn for health. Speculation is rife that the shortfall for the NHI 2012 pilot spending might be raised through additional taxation.”
NHI Implementation: Quality Improvement
Issued by the Director-General: National Department of Health. 03 October 2010
http://www.doh.gov.za/docs/pr/pr1003-f.html
“Preparatory work on National Health Insurance (NHI) kick-starts this week with an international consultative workshop on quality improvement.”
“The National Health Insurance (NHI) is one of ten key priorities of the health sector Programme of Action. It is to be implemented in phases from 2012 over a fourteen year period. Its objective is to put in place the necessary funding and health service delivery mechanisms that will enable the creation of an efficient, equitable and sustainable health system in South Africa. NHI is one of the most ambitious reforms that our government has introduced and preparatory work for the implementation of the NHI requires a comprehensive and systematic approach.”
“NHI is founded on the Constitutional principle of the right to quality health care. From previous discussions we have recognized the existence of gaps in our approach to ensuring that this right is achieved. These gaps include amongst other things infrastructure backlogs, challenges in implementing quality improvement strategies and accreditation programmes for our health facilities and human resource shortages. The successful implementation of the NHI is dependent on the realization of a quality of care in our facilities. Our public health facilities will be required to conform to agreed-upon quality standards that have been approved by the National Health Council, if they are to be accredited to deliver health services within an NHI.”
“In preparing for the implementation of the National Health Insurance, an international consultative workshop is being convened to address one of these gaps, namely quality of care in our public health facilities. The aim of the workshop is to provide an opportunity for policy makers, public health practitioners and other health experts to apply their collective minds, to add value to our efforts aimed at improving the health profile of all South Africans through improvement of quality of care in public health facilities and communities.”
Parliamentary Portfolio Committee on Health
Members of the Portfolio Committee:
http://www.parliament.gov.za/live/content.php?Item_ID=215&CommitteeID=15
“Portfolio committee marks four key health areas”
Source: Slindile Khanyile: Business Report, 2 February 2010
http://www.busrep.co.za/index.php?fSectionId=561&fArticleId=5335164
“The parliamentary portfolio committee on health has four priorities this year: monitoring the private healthcare sector closely, pushing for the National Health Insurance (NHI), regulating traditional healers and ensuring South Africa is ready for health emergencies during the World Cup. Chairman Bevan Goqwana said that the committee would conduct an oversight study to understand what was happening in the private healthcare sector. .... Goqwana said the committee was expecting the Department of Health to deliver a policy document on the proposed NHI next month [i.e. expected March. This did not happen and there is still no document in the public domain from the DoH]. He said the committee wanted to make sure that it succeeded and was listening to quite a few people from other countries who were sharing how they had done it. He said that South Africa was unique in that there were huge inequities in the health system and the NHI must address that. The NHI implementation plan is expected to be ready by July. ...”
National Planning Commission
The Minister in The Presidency for National Planning, Trevor Manuel, has established the National Planning Commission (NPC). Nominations were called for and Commissioners to the National Planning Commission were sworn in on 30 April 2010.
During the establishment of the NPC, Minister Manuel had indicated that long-term social security issues and National Health Insurance would be subject to scrutiny by the NPC.
See http://www.thepresidency.gov.za/pebble.asp?relid=1692
The clearest statement on NHI from National Treasury was in the Medium-Term Budget Policy Speech by Finance Minister, Pravin Gordhan, on 27 October 2010.
See http://www.treasury.gov.za/documents/mtbps/2010/ for the speech and a substantial number of background and supporting documents.
“We are likely to achieve the 2015 MDG targets for reducing extreme poverty, for access to water and sanitation and in providing school opportunities and achieving gender equity in education. But on critical health indicators, such as maternal and child mortality, and HIV and TB prevalence, we are not on track to achieve the targets.”
“So we have to place health care and the creation of national health insurance, education, employment and the requirements of the growth path at the centre of our policy framework for the period ahead. This is in part about expenditure allocations, and it is also about how we manage public service delivery.”
“Several critical long-term public expenditure pressures need to be addressed systematically over the period ahead.
First, we have to complete the reform of social security arrangements that has been under discussion for since the 2002 Taylor Committee Report. A key aim is improved preservation of savings for retirement among working South Africans. Consolidation of the fragmented existing administrative arrangements for social security is also a priority.
Second, we have to implement a National Health Insurance system. The first phase will involve improved primary health services in rural areas and underserved communities, and an expanded programme of hospital construction and revitalisation. An inter-Ministerial committee has met to consider the fiscal and financial implications of further health financing reforms, and will develop practical transition proposals. ....”
During questions, the Minister was probed on NHI funding as Dr Olive Shisana had stated a few days before that NHI tax deductions would start in 2012.
Tamar Kahn of Business Day reported as follows:
“The government has no immediate plans to raise taxes to fund the proposed national health insurance (NHI), Finance Minister Pravin Gordhan said yesterday. He emphasised the government’s commitment to introducing the NHI, but said it would be “unfair to South Africans” to increase their taxes before the government had worked out what it would cost. The government would only consider additional taxes for the NHI once “we know exactly what the numbers look like, what the costs are, and exactly what cash flow is required per year over a five-, 10-, 15-year period,” he said. The government’s new growth path should create jobs and expand the tax base, helping pay for the NHI, he said.”
“Mr Gordhan made clear there would be no rush job. “Over a period of 14 years there will be a … systematic approach to implementing the NHI and the development and enhancement of the health service,” he said.”
“Preparatory steps under way include proposed changes to the current system of tax breaks for medical scheme contributions. A discussion document on the Treasury’s proposals would be released shortly, said its head of health policy, Mark Blecher. Medical scheme members’ tax breaks are a percentage of their monthly contributions. People who belong to expensive plans get more money back than those on entry-level options. The Treasury wants to replace this with a simple annual rebate independent of contributions, Mr Blecher said.”
“Changes have also been made to the equitable share formula, under which the central government allocates funds to provinces, to provide for a more specific and detailed health component, with subcomponents for primary healthcare and hospitals. These changes are to be introduced next year.”
“There were also hints from the Treasury of a greater role for the private sector in training staff, with a suggestion that private hospitals could help train doctors.”
Troye Lund wrote for Fin24 on 27 October 2010 as follows:
“Over the next 14 years, there will be a relentless and systematic approach to implementing the National Health Insurance (NHI) scheme, said Finance Minister Pravin Gordhan. Speaking to the media ahead of tabling his medium-term budget policy statement in parliament, Gordhan said that there must be no doubt about government's commitment to developing a national health system that serves all 50 million of its people and whatever number this is in future.”
"We will get the public health system right," said Gordhan, who also promised that government would ensure that there was funding to achieve this goal. Since 2005/06 government has increased spending in education and health by 50% in real terms. This means that public health funding stands at about 3.8% of gross domestic product (GDP) and about 11.5% of government expenditure. Gordhan played down speculation that this drive would be funded through higher taxes, saying it was not on the cards at this stage.”
“While he said that National Treasury was doing work to get a firm grip of what the costs of implanting the NHI would be, he stressed that everything possible had to be done to improve the efficiency of government spending in the public health sector. This, he said, was especially relevant for provinces. "One of the key areas is how to stop the wastage in the public health system and how do we stop provinces from diverting funds that are meant for health to other so-called needs in province. I say 'so-called' because some of these needs are pretty compared to the needs for public health," Gordhan said.”
“The mini budget proposes several changes that effectively start paving the way for the NHI. While this includes a proposal to do away with tax benefits for private medical aid contributions, the biggest changes will be made to the equitable share formula that provinces receive as part of their budget allocations. This change, which will be introduced next year, will allow for a more specific and detailed health component with sub-components for primary healthcare and hospitals. It will also introduce a new formula where the weights of education and health will be revised.”
“Gordhan stressed that provincial health departments are undertaking remedial measures to improve financial management and stabilise their finances. "To retain critical and skilled health staff, occupation-specific dispensations for 40 health therapeutic groups have been agreed, including physiotherapists, occupational therapists and psychologists. "Government has also prioritised funds to fill important posts, including medical registrars in obstetrics and paediatrics, and to recapitalise nursing colleges," states the mini budget.” …
“The mini budget also announces that "Amendments to improve the fairness of the tax treatment of medical scheme contributions will be introduced".
Consideration is also being given to ways of piloting improved family healthcare as part of an enhanced primary care system, including district-based contracts with independent general practitioners. The mini budget also calls for options to be explored for aligning procurement of medicines to optimise economies of scale from bulk purchases. "There is potential for private hospital participation in training doctors and nurses in conjunction with academic institutions, and for bringing private sector management capacity into public health delivery," states the medium-term budget.”
“It also stresses that these proposals form part of a broader drive to reform the public health system, which has to precede the implementation of an NHI.”
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