National Health Insurance
NHS in the UK compared to South African Hospitals
Download Full NHI Policy Brief 11 PDF Document
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.
IMSA NHI Policy Brief No. 6 dealt with the basics of costing and pricing healthcare from an actuarial perspective. Ideally, we would want to study the age-gender curves in the public sector in South Africa but despite several attempts over a nine year period it has not yet been feasible to estimate these curves. It is of course very difficult to use data from an under-resourced public service to predict cost in a future better-resourced system.
Researchers do have access to excellent private sector data and thus the technical issue becomes how to adjust the private sector age-gender curves to estimate the likely total cost in a well-resourced public system. There are some issues related to the shape of the curves but the most critical and most difficult adjustment is the estimate of delivery efficiency.
It has been widely held that the private sector is relatively inefficient and that the predominantly fee-for-service reimbursement system is at the root of the problem. There is thus often an assumption that a future system with changed purchasing behaviour (more strategic purchasing and less passive purchasing) and changed reimbursement (more capitation and use of DRGs) can deliver healthcare more efficiently than the private sector at present. In other words, models often make allowance for the cost of delivery to be cheaper in the public sector or NHI than the current medical scheme environment.
However hard evidence for the extent of any saving is much more mixed and the issue is not at all straightforward. This policy brief sets out some of the evidence for this critical assumption in costing and comments on some of the studies, their relevance to local conditions and newer evidence.
In early work on minimum benefits in South Africa, Söderlund & Peprah used data from the National Health Service (NHS) in the UK, blended with data from the mine hospital system in South Africa and a small amount of medical scheme data. They “combined individual data sources to yield a hybrid utilisation and cost dataset which selectively uses elements from each of the sources. The hybrid dataset was designed to represent the best possible estimates for the South African target population”.
The authors found “potential for enormous variation in the elective surgery rates ... . Admission rates for this category in the South African Medical schemes sector are almost double those of NHS hospitals, and approximately four times those of mine hospitals”.
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