16 July 2009, Inanda Club, Illovo
Members of the South African Medical Device Industry Association
Ladies and Gentlemen
It is indeed a great honour for me to be invited to address this meeting today. I have been requested to speak on the National Health Insurance (NHI), one of the issues that are very topical in the health sector.
The NHI has recently re-occupied the centre stage of discussions. These discussions have intensified this year from the time the African National Congress (ANC) announced in its 2009 Election Manifesto that the NHI is one of their key priorities of the coming five years, to its confirmation by the President of the Republic in his State of the Nation Address that the NHI is one of the key programs of government.
What is the National Health Insurance?
The proposed NHI is a form of universal health financing coverage. It is based on the key principles universality, that every South Africans would be entitled to benefit from the services it covers, and that it would be funded partly by compulsory contributions by all persons who are earning an income and partly by tax. All these funds would be placed in a single pool. This pool would be available to fund all health care in the public and private health sector under conditions that would apply to all health care service providers.
It is important to understand that debates about universal coverage are neither new nor unique to South Africa. It is also important to realise that the desire to improve the health status of nations, including that of South Africans, is at the heart of this debate.
Internationally, more than thirty (30) countries had already implemented some form of compulsory national health insurance scheme before 1939 before the start of the First World War. Some voluntary national health insurance schemes were also in existence. These schemes were aimed mainly at pooling resources to provide forms of social security for the bulk of the citizenry. These forms of social security that included the provision of health care for all citizens.
In South Africa, debates about universal coverage can be traced back to more than seventy (70) years ago, when in 1941 a national Health insurance plan for South Africa was published in the South African Medical Journal by J Collie, the Chairperson of the Committee of Enquiry into the National Health Insurance. This plan proposed a health insurance scheme that would cover people of all races except those who lived in rural areas. Contributors to this insurance would be government, employers and employees. This plan was never implemented because of resistance from various quarters. It was instead followed by another commission, headed by the former Minister of Health, Dr Gluckman, which made recommendations on a national health service. These recommendations also never saw the light of day.
National Health Insurance proposals
The current proposals on the NHI originate from the ANC policy debates and plans. Plans that were drawn to transform apartheid health into a democratic dispensation included proposals on universal coverage. These plans found expression in the 1994 ANC National Health Plan, which remains the foundation of current government health policies.
Since 1994, the implementation of the NHI remained a priority of the new democratic order. The Department of Health proposed the implementation of a Social Health Insurance (SHI), which would not cover the entire population. This plan also was not implemented.
Debates that have taken place, many consultations that were made and opinions that were sought on the state of the health sector and challenges facing the public and private health sectors resulted resolutions that identified health as a key priority for the period 2007 to 2012.
The major challenges that have been identified are mainly that, despite the great strides that have been made in the last fifteen (15) years to build a unitary National Health System from the ruins of a fragmented apartheid health system, and to increase access to health care, the public health sector has failed to significantly improve the quality of care. In many areas access has increased but quality has deteriorated. The country is faced with a heavier burden of disease, shortage of human resources, poor management of health institutions, poor financial management and inadequate funding, and deteriorating infrastructure.
The private health sector has to deal with cost escalations mainly from over servicing of patients and non-health related expenditures such as administration fees, managed care fees and brokerage fees. The medical aid industry is also in a state of flux and often operates in a crisis mode. Membership to medical schemes has become increasingly unaffordable. Medical schemes membership has declined considerably as a percentage of the population, from 17% in 1992 to less than 15% in 2005 (Council for Medical Schemes, 2006).
Faced with all these challenges, plans were drawn and presented to the electorate at the last national and provincial elections. This government received an overwhelming mandate at these elections. In order to give effect to that mandate, the health sector Program of Action is being implemented.
This Program of Action is based on the following ten key priorities, which are solutions to challenges that have been identified:
These are the priorities that you should hold us, as the Health Ministry and Department of Health, accountable for in the coming five years of governance. They are the same priorities that we will constantly call you to work together with us to ensure that they are implemented with urgency and successfully.
The Implementation of the National Health Insurance, which is the second of our ten priorities, is the main reason we are discussing here today. The Ministry has worked on this matter and believes that it is its duty to ensure that conditions must be created for meaningful consultations on the NHI. The public and all stakeholders must be brought into debates to allow the infusion of collective wisdom into decisions on this matter.
We are in the process of consulting colleagues in Cabinet and relevant government departments as we prepare a submission on the NHI to the National Cabinet for approval. Once approved, documents will be released for public debates and consultation. We had aimed to finalise this process by the end of June.
However, as formal processes for approval could not be completed on time, measures have been put in place in the Ministry to speed up work on the NHI.
To reiterate the fact mentioned above, the broad objective of the NHI is to put into place the necessary funding and health service delivery mechanisms, which will enable the creation of an efficient, equitable and sustainable health system in South Africa. It will be based on the principles of the right to health, social solidarity and universal coverage. It will aim at bringing about equity.
General tax revenues will form the core of the resources required to fund the NHI. However, additional resources must be mobilised from other sources of funding to complement the envelope of resources from national revenue.
One of the main concerns that have been raised by various commentators on the NHI is the future role of the private sector. We have stated clearly in past engagements and various forums that the policy of this government and the ANC is that the private sector is an important role-player in the delivery of health care.
We are currently improving public health care, which will make it easier for us to implement the NHI. The implementation of the NHI will need and result in the strengthening of the National Health System. It will also need and result in the improvement of quality of care. This means that health systems strengthening, quality improvement and the implementation of the NHI should be seen as parallel and complementary processes that we have to embark on in the public and private sector.
Current consensus is that the NHI be implemented in a phased manner to allow for consultation, policy making and legislation review.
I greatly appreciate your interest in this matter. I promise that you will be one of the first stakeholders to be engaged by the Ministry and Department of Health when we have taken the NHI documents through the necessary processes for Cabinet approval and release to the public. We have to maintain the necessary discipline in dealing with the business of government. I am confident that you will, at the right time, study our proposals on the NHI, engage in debates and contribute resources, skills and expertise to the final product that will emerge after consultations.
The implementation of the NHI will require that we develop partnerships to ensure accelerated transformation of the National Health System. Parallel efforts to improve health services and introduce efficiencies must focus on, amongst others, the improvement of human resources for health and physical infrastructure, effective and efficient management especially financial, the establishment of effective Information and Communication Technology for health, and special focus on Quality of Care, norms and standards.
The case for change in health care financing in South Africa is strong. The introduction of mandatory National Health Insurance is urgent. This is more so as we move towards the deadline for the achievement of the Millennium Development Goals for health.
We dare not fail to bring about a better life for all. Together we can do more.
As we said in the elections and continue to say, working together, we can do more.