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The 97-page paper outlines the country’s path to universal health coverage over 14 years and proposes dramatic changes in the role of private medical aids and the National Health Laboratory Services among others.

Funding Shortfalls NHI

Projected NHI funding shortfalls under different growth paths.Click to enlarge graph

Released on 10 December, the long awaited white paper begins by providing the background and justification of the country’s moves to join other countries like the Brazil, the United Kingdom and Thailand in introducing universal healthcare coverage.

The document notes that healthcare in South Africa is comprised of a two-tiered system divided along socio-economic lines. The private medical aid sector is comprised of 83 medical aid schemes that fund healthcare services for about 16 percent of the population. The paper noted that spending through medical schemes in South Africa is the highest in the world and is six times higher than in Organisation for Economic Co-operation and Development (OECD) countries

The paper argues that this two-tiered system has led to fragmented funding and risk pools in healthcare and posits that the creation of a National Health Insurance (NHI) will improve healthcare equity by combining fragmented private and public health funding pools and eliminating out-of-pocket payments.

The notes that the NHI will ultimately deliver a comprehensive package of health services that include services such as rehabilitation and palliative care, mental health care including that related to substance abuse and maternal and child health care.

NHI to be rolled out in three phases over 14 years

The document then goes onto describe the NHI’s implementation during a 14-year period. The first five-year period will focus on strengthening of the service delivery platform and the overall improvement of quality in the public health sector. A second, five-year phase will feature the roll out of a NHI card to all South Africans and permanent residents.

Foreign nationals and students with or without visas and temporary residents will be required to have private medical insurance. The document notes that a special contingency fund will be established to provide basic health coverage for refugees while asylum seekers will be guaranteed access to care in case of emergency and for notifiable conditions of public health concern.

Potential revenue sources for the NHI

Potential revenue sources for the NHI. Click to enlarge graph

This phase will also see the introduction of long-awaited unique identifiers linked to the Department of Home Affairs and the creation of a transitional fund to purchase primary health care services from certified public and private providers. User fees in the form of direct out-of-pocket payments in public hospitals will be abolished to improve access to needed health services and to protect households from financial hardships.

The document notes that ultimately private medical aids may supply “top up” services over and above a basic package of services that has yet to be defined. It also notes that given recent problems in funding the National Health Laboratory Service (NHLS), a new NHLS funding model will have to be developed.

The third and final phase of implementation will take place over the last four years and will focus on ensuring that the NHI Fund is fully functional. Administered by a the NHI Commission comprised of a diverse range of national experts, the fund will be charged with:

  • Pooling of all the financial resources allocated for purchasing personal health services for the entire population;
  • Strategic purchasing of personal health services on behalf of the entire population;
  • Contracting with all accredited NHI public providers and identified accredited private service providers;
  • Facilitating the procurement of goods and services for all NHI accredited and contracted facilities, whether in the public or private sector, in order to increase the buying power of the fund;
  • Administering the funding and purchasing of all personal health services that are provided through accredited and contracted providers;
  • Developing and implementing strategic mechanisms for procuring of goods including drugs, medical equipment and technology on behalf of providers that will be contracted;
  • Developing contracting and reimbursement strategies for contracted providers at various levels of care;
  • Undertaking audit and risk management to mitigate moral hazard, collate utilisation data and implement information management systems;
  • Maintaining the national database on the demographic and epidemiological profile of the population;
  • Undertaking health economic analysis, pharmaco-economic analysis, cost-benefit analysis and actuarial research and analysis to ensure sustainability of the fund; and
  • Undertaking ongoing research, monitoring and evaluation of the NHI’s impact on health outcomes.

The document concludes with a discussion of possible methods to finance this fund such as changes in payroll or value-added taxes. The white paper admits that the NHI’s financing requirements are uncertain, and in part depend on public health system improvements and medical scheme regulatory reforms which have not yet been fully articulated.

File Download: National-Insurance-White-Paper-December-11-2015

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