NHI Bill impact: Dispelling misconceptions around medical schemes
In a historic move aimed at transforming the South African healthcare landscape, President Cyril Ramaphosa signed the National Health Insurance (NHI) Bill into law. This landmark decision promises to move South Africa towards Universal Health Coverage (UHC) for all citizens, regardless of socio-economic status.
While the goal of UHC is commendable, the rhetoric leading up to the NHI Act’s announcement has created misconceptions about the role of medical schemes, with many believing that they should cancel their memberships immediately to enjoy free health services for the foreseeable future.
Mothudi clarifies that the implementation of NHI will take several years, dispelling this misconception.
The NHI Act introduces a single-payer system, central to the idea is that healthcare is a ‘public good’, suggesting all healthcare funding should exclude medical schemes, and should be government-funded.
Healthcare misconceptions clarified
Mothudi counters that healthcare is more accurately described as a social good. A public good, like military services, is one that the government must provide and from which no one can be excluded, regardless of payment. While healthcare is essential, it is not feasible to provide it as a public good.
The Board of Healthcare Funders (BHF), concerned about the numerous misconceptions propagated by government representatives since 2009, commissioned Alex van den Heever, chair of Social Security Systems Administration and Management Studies at Wits Health Consortium, to investigate these claims.
Despite their hyperbolic nature and lack of systematic research, these statements have significant weight due to their endorsement by influential individuals. Heever's report identified frequently repeated assertions that he concluded were unsubstantiated and untrue.
Key findings from the report:
- 1. Medical schemes are unsustainable – False: In 2009, claims suggested that many medical schemes were headed for collapse due to unsustainable financing models, with 18 schemes reportedly nearing insolvency. Heever's report refutes this, showing stability in medical schemes from 2005 to 2022. The number of beneficiaries increased by over one million from 2009 to 2022, with consolidated reserves of R114bn in 2022, far exceeding the required 25% reserve ratio.
Broker costs have not been a systemic concern, and total non-health costs per average beneficiary per month for all medical schemes decreased by 34.7% in real terms from 2005 to 2020.
- 2. Health services are a public good – False: In 2011, health minister Aaron Motsoaledi claimed that private healthcare was a "brutal system" due to commercialisation. However, Heever clarified that healthcare is not a public good in the economic sense, as it does not meet the criteria of being jointly consumed without exclusion. Healthcare is a crucial service but providing it as a public good is not feasible.
- 3. Most medical scheme beneficiaries are white – False: Last year, Olive Shisana, an honorary professor at the University of Cape Town and special advisor to President Ramaphosa, stated that the private sector predominantly serves the privileged white population. However, Statistics South Africa's 2021 research indicates that of the total population utilising private healthcare services, 50.2% are Black African, 32.3% are White, 9.8% are Coloured, and 7.6% are Indian/Asian.
Need for balanced perspectives
While the BHF supports healthcare reform, it raises concerns about the NHI Act's constitutionality and calls for a factual review of claims about medical schemes. It is crucial to present both sides of the debate to understand the implications fully. Including government perspectives and addressing how the NHI will affect individual citizens would provide a more comprehensive view.
Medical schemes remain a valuable national asset that plays a crucial role in ensuring the long-term viability of South Africa's healthcare ecosystem. BHF advocates for a balanced approach to healthcare reform that considers both public and private sectors' strengths and weaknesses.