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HMR 1st Qtr 2013: Executive Summary of NHI Policy, Brief 26. Multiple purchasers and NHI in South

HMR Africa

The NHI Green Paper, released in August 2011, envisaged a single National Health Insurance Fund operating as a single purchaser but allowed for the possibility of a multi-payer system to be explored. Public comments on the Green Paper and a promised document on funding NHI have not yet been made public. The current vision for NHI, as presented in the NHI Green Paper, arose from resolutions at the ANC National Congress held in Polokwane in December 2007. A significant development at the National Congress at Mangaung in December 2012 was the endorsement of the National Development Plan 2030 as a platform for united action by all South Africans.

This policy brief looks in more detail at what the National Development Plan 2030 (NDP2030) says about health systems reform. The brief then makes suggestions as to how to link multiple purchasers in what may be a prolonged period of multiple public and private purchasers in the South African health system.

The NDP2030 is the outcome of a process of wide consultation by the National Planning Commission under the leadership of Trevor Manuel (Chairperson) and Cyril Ramaphosa (Deputy Chairperson). While the initial Diagnostic Report was very critical of the collapsing public health system, the final report endorses the path for reform developed by the Ministry of Health, saying “In the view of the National Planning Commission, South Africa is on the right path, after a period of some difficulty.”

The NDP2030 takes a more pragmatic line on private healthcare, saying that “By 2030, the health system should provide quality care to all, free at the point of service, or paid for by publicly provided or privately funded insurance”. “In South Africa, the term national health insurance may be open to misinterpretation. South Africa’s NHI system will be predominantly based on public sector delivery at first, and mainly tax-funded (strong elements of the national health service)” [emphasis added].

Fig 1 : The Potential use of risk adjustment in the South African healthcare sytem.

A key difference to the NHI Green Paper is that the NDP2030 does not envisage new legislation to create NHI, saying that there are already a number of laws that are meant to ensure that different spheres of government and departments within a sphere work together. In interviews at the launch of NDP2030 it was also reported that NHI might take 15 to 25 years, longer than the 14 to 15 years envisaged by the Department of Health.

It might be some time before the impact of the NDP2030 is articulated in health reform documents but it would seem that the health reform debate in South Africa is beginning to emerge from the strong ideological position of having only a single new central fund as the single purchaser. In any event, the NHI Green Paper was always ambiguous about the number of purchasers, saying in places that there would be a single payer, a single funder or a single purchaser, yet in other places describing a system of 52 multiple district purchasers.

The longer time frames to the implementation of NHI (whatever that may come to mean) imply that medical schemes will be purchasers of healthcare for a section of the population for some considerable time. The figure below suggests a way in which risk adjustment can be used at various levels of pooling in the health system in order to accommodate the reality of a multiple purchaser model.

The first level of risk adjustment, described as the “National Health Insurance risk-adjusted allocation”, takes the total amount contributed via general taxation and any social security contributions and allocates this between the public national health system and all the other approved purchasers. The second level of risk adjustment then occurs within two sub-pools, the risk-adjusted allocation to provinces (or districts) and the risk adjusted allocation to approved purchasers. A variation is also explored in the policy brief with a separate risk adjustment pool for bargaining council funds. Medical schemes might be absorbed completely as approved purchasers but the opportunity is available to make a break with the past and use the new structure as an incentive for old medical schemes to make a shift to a new paradigm. The Department of Health could specify a number of essential features of an approved fund to align the funds with the public purpose.

Draft medical scheme legislation that was stalled in 2008 seems to be being prepared for parliament. However despite a well-argued submission by the Council on the reasons for including risk adjustment mechanisms, the Department of Health has excluded this element. This omission aside, there appears to be recognition at policy level that the reform trajectory of medical schemes, which had been stalled after the ANC Polokwane conference in 2007, must continue. This is to be welcomed as part of the recognition of the reality of South Africa moving to universal coverage via a multiple purchaser trajectory.

The use of multiple purchasers to achieve universal coverage is not only found in most countries, but is part of the platform of the International Labour Organisation (ILO) and the International Social Security Association (ISSA). A two-dimensional approach to social security is followed – one that ensures a minimum “floor” for the most vulnerable groups, but that promotes the development of a multi-pillar system to ensure comprehensive social security.

It is critical, as South Africa moves forward on its own trajectory towards universal coverage, that the minimum package of health benefits be more clearly articulated so that this can be applied to all funders of healthcare in a multiple purchaser model. South Africans should not have to wait for 15 to 20 years for some future vision of NHI. Rather, let us acknowledge the best of the available funding models and craft a national system that provides a minimum package of health benefits for all and improves cross-subsidies within and across the multiple funding pools.

Summarised for IMSA by Prof Heather McLeod; Jan, 2013


Posted on Monday, May 27 @ 11:52:18 SAST by E-Doc
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