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HEALTH FINANCING REFORM PROPOSALS AND DEBATES

National civil society consultation August 2008

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Acknowledgement

With thanks to Professor Di McIntyre of the School of Public Health at the University of Cape Town for the statistics and information used in this presentation.

We have also drawn on;Consultation report: Observations on Social Security Reform in South Africa – Social Security Department International Labour office – July 2008

Please note the proposals are not necessarily positions of the

Black Sash.

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Current situation

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Current situation

Our nation’s health has worsened over the last decade.

For example; Under 5 mortality per 1000 live births: 1990: 60 infants 2005: 68 infants

There is an escalating burden of HIV/AIDS and other non-communicable diseases.

There is a stagnation and deterioration in mortality rates.

At the same time there is inequity in access to health care with the majority low-income population seeking and receiving less care than the minority high-income population

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Public and Private split: Percentage of population served

Private and Public Sector

21%Public Sector

64%

Private Medical

Schemes15%

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Public and private split: expenditure per beneficiary

Private Medical

Schemes, R9,500

Public SectorR1,300

Private and

Public SectorR1,500

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Public and private split: Resources

588 470 102 194616 399

1,852

4,193

22,879

10,811

0

5000

10000

15000

20000

25000

Populationper General

Doctor

Populationper

Specialist

Populationper Nurse

Populationper

Pharmacist

Populationper Hospital

Bed

PrivateSector

PublicSector

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Public sector under resourced

The public sector serves around 85% of the South African population

But about seven times the amount of money is spent on the private sector which serves about 14% of the South African population

Under these circumstances it is clear that we do not have an

equitable healthcare system

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Due to:

Spiraling costs, reduction of benefits, lack of comprehensive health care, health promotion and preventative services

Stagnant membership

Large number of schemes and packages: making it difficult for consumer to choose

But the private sector not all ok

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Therefore there is a need for debate, reform and a drastic overhaul of health care financing policies in South Africa for the

private and public sector - to improve cover for all and in particular to protect low-income and impoverished populations

from devastating costs of health care.

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How did we get here? Time line of policies and policy debate in SA

1994: ANC National Health Plan released 1995: ANC Health Care Finance Committee

established1997: Department of Health establishes Social Health

Insurance Working Group 2002: Taylor Committee proposed a path to a National

Health Insurance2007: ANC Polokwane Conference calls for a National

Health Insurance 2008: A revival of a process for healthcare finance

policy reform both within the ANC and various Departments of government but no formal proposal

on the table as yet.

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Progressive principles to inform our approach to health financing

The right to healthcare Section 27 of the South African constitution includes the following;“1) Everyone has the right to have access to: a) Healthcare services including reproductive healthcare;…… 2) The state must take reasonable legislative and other measures

within its available resources, to achieve the progressive realization of each of these rights

3) No one may be refused emergency medical treatment”

Universal CoverageThe World Health Organization (WHO) describes universal coverage as: A health system that provides all citizens with adequate healthcare at an affordable cost.

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Progressive principles to inform our approach to health financing continued

In order to achieve the right to health care – the health care financing system must allow for cross subsidisation from the

wealthy to the poor and from the healthy to the ill.

The principle of social solidarity does not allow individuals to opt out of the health care system.

To achieve social solidarity all living in South Africa must be able to benefit from the health system and all who can afford must contribute;

This is true whether or not individuals can buy additional private health care insurance. A discussion on equity is needed.

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Key functions within health care financing

Revenue collection: Where money comes from; how much money and how it is collected (Tax, contributions to insurance, out of pocket).

Fund pooling: The idea of an individual and or state putting in money and people being assured of care when they need it.

Purchasing: Buying what is needed to provide health care (medicines, supplies, services, expertise).

Provision: Healthcare being given to people.

For each of these functions civil society should consider the following advocacy issues…..

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Key functions within healthcare financing: Advocacy

Revenue collection: Where money comes from; how much money and how it is collected (Tax, contributions to insurance, out of pocket).

Increase tax (personal/transactional) as the major revenue source Mandatory contributions proportional to earnings shared between

employees’ and employers The employees contribution is to promote identification with the system State subsidies to the fund for unemployed and low income families No opt out: Everyone should contribute who can afford and everyone

can benefit Will people be able to continue to buy private health insurance or top

up the public healthcare?

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Key functions within healthcare financing: Advocacy continued

A National Health Insurance (NHI) fund to pool revenue from all economic sectors including private and public workers and possibly informal workers

This fund would finance a health system to benefit all who live in SA

Rationalise and regulate (or nationalise?) medical insurance schemes to bring them into NHI and prevent a two- tier system

Note that: NHI is proposed by Labour in particular COSATU and NEHAWU, the Peoples Health Movement and others

‘Social Health Insurance’ is normally used to indicate a different model: One that only benefits the contributors to the fund

Fund pooling: The idea of an individual and or state putting in money and people being assured of care when they need it

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Key functions within healthcare financing: Advocacy continued

Money allocated from NHI fund to hospitals and districts on a needs-based formula

The formula takes into account the size of population, demographics, socio-economic index, notifiable illnesses, infrastructure

Hospitals would require major governance and management improvement coupled with the right to spend

District structures make decisions on expenditure priorities Norms and standards established for providers who will need to be

accredited based on quality, acceptable fees charged, primary healthcare principles applied etc.

Civil society oversight, accountability and involvement at all levels

Purchasing: Buying what is needed to provide health care (medicines, supplies, services, expertise etc.)

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Key functions within healthcare financing: Advocacy continued

Provision: Healthcare being given to people.

Advocate for: Quality healthcare for all through

the same system. Indigent and unemployed households entitled

to same benefits as contributing population