South Africa: Government calls on private sector to work towards universal coverage

Thursday, 20 September 2012: Government had come up with elaborate plans to improve access to healthcare and called on the private sector to work towards universal coverage so more South Africans could access quality healthcare, said health minister Aaron Motsoaledi on the opening day of the Hospital Association of South Africa (HASA) 2012 Conference in Cape Town.

Addressing delegates, Motsoaledi said National Health Insurance (NHI) should not be viewed as a contest between the public and private healthcare sectors and that the issue of regulation had dominated news stories over recent months.

“Some have argued that (the issue of pricing) should be left to market forces, but there is a realisation that this is risky and when the risk matures into a crisis, then the state is accused of poor stewardship,” he said.  “That is why I want to work with you (the private sector) under the stewardship of the state, but with your participation to come up with solutions.”

He said despite the financial crisis, the first thing governments did was protect their people’s health.  “At all times, health is a public good, not just any other commodity.” He said that when government talked about regulation, it meant its position was “actively for health” and that private healthcare players needed to come up with a clear position in terms of where they stood with regards to regulation and financing.

Meanwhile, Dr Ravindra Rannan-Eliya, director of the Institute for Health Policy, Colombo, Sri Lanka said given the historical legacies in South Africa, any transition to universal health coverage where all citizens could access quality healthcare would be “extraordinarily expensive”.  “Paradoxically, long-term cost control both for the fiscus and for the current private sector users may not be possible without universal health coverage.”

He said the decision to work towards universal health coverage was a choice South African society had to make – about solidarity, equity, collective action and the use of resources.

“There would always be those for and those against universal coverage; and winners and losers, at least in the short term.  “This is the choice for which democracy can answer, using the ballot box.  It is not a decision that can be made by experts, but rather through a participatory process.”

He added that many low and middle-income countries had achieved high, relatively equal levels of access to services with low levels of financial impoverishment.

But he pointed out that South Africa will have to overcome numerous challenges if it is to achieve equal access to healthcare services – especially since the country faced unique challenges including large disparities between the upper and lower elements of society.

Rannan-Eliya said the costs to the fiscus to achieve universal coverage were likely to be prohibitive.  “The burden of new funding  – around 2-3% of GDP – would fall largely on those not using public sector,” he said.  “In addition, public sector service quality and availability would need to reach current medical aid scheme levels and health professionals would need large incentives to switch from private to public sector.”

Rannan-Eliya said the existing public sector was an integrated delivery system, free at the point of delivery and was not designed to receive extra-budgetary payments.  “There is no global experience of shifting free systems to insurance financing,” he explained.

He said global experience strongly refuted arguments that cost control could be achieved in health insurance markets without the use of monopsony funder power.

A full integration at the level of financing between the public and private sectors would be necessary and South Africa had two choices he said. Either there could be a complete provider-payment split in the public sector and a shift to a unified financing system or private sector providers could be displaced by an improved public provider system.  “Neither choice has significant, relevant global precedence,” said Rannan-Eliya.

“Ultimately, South Africans will need to decide how important it is for their society to pay the fiscal and political costs required to eliminate disparities in access to healthcare.”