Monday, 2 September – Johannesburg, South Africa
Mandatory health cover of formally employed is tried and tested and if put to use in South Africa could reduce the public health burden, increase public per capita spend on health, and free up resources that could help address the country’s most pressing health crises.
With widespread concern that the National Health Insurance Fund is unaffordable and will take too long to implement while most South Africans already struggle to access quality healthcare services, Netcare Chief Executive Office Dr Richard Friedland has raised the possibility of near-term solutions including an under-explored alternative.
Speaking at the Hospital Association of South Africa Conference in Sandton, he stated that private hospitals wish to work with government to find solutions to our country’s healthcare problems. He pointed to mandatory medical cover for the formally employed as a potential solution that has been well-researched over two decades and is a “workable solution that if implemented will be quick to roll out and in a very short time provide enhanced healthcare to all South Africans.”
Friedland pointed out that the African National Congress’ 1994 Health Plan recommended mandatory cover for the formally employed and the National Department of Health Social Health Insurance Working Group in 1997 recommended that mandatory cover for formal sector employees should be confined to those above the income tax threshold, due to affordability concerns.
What this all offers, explained Friedland, is a middle ground option. If the government mandates those South Africans who are formally employed together with their families to be covered by some form of health insurance or medical aid, “This will enable public health sector resources to be dedicated to the informally employed, unemployed and indigent.”
“With a formally employed population of 11.5 million, together with the estimated number of dependants, based on a 2.4 beneficiary ratio, this could result in up to 27.5 million of our population that could potentially over time become covered, leaving the remaining 35.5 (56% of the population) people dependent on public health resources,” Friedland said.
Government public health per capita spend, he said, could increase over time by 52% without any additional funding of the public sector budget.
“In simple terms, if one considered the entire population in South Africa, government’s responsibility would reduce from the current 85% of the population covered by public health to 56%,” he said.
The latest per capita public expenditure based on a consolidated health budget of R271 billion works out to R5054, when considering the population and excluding medical scheme users. With formal employment coverage, that per capita public expenditure on public health users would increase 52% to R7 659, research shows.
Friedland also told the audience that getting the scheme off the ground could be done in three phases.
Phase one would involve including the formally employed and their dependants who are above the tax threshold. This would grow the medical scheme coverage from 9,2 to 15,4 million. The completion of Phase 1 would also expand public per capita spend by 12,9% at present day levels.
Phase 2 would include those formally employed and dependents who are below the tax threshold. This would push medical scheme coverage to 27,5 million and expand public per capita spend to 52%.
Phase 3, Friedland explained, will allow for the expansion of the economy through recovery and an increase in employment.
This will have further benefits to South Africa’s health care system with research showing that for every one million formal jobs created, the public health system would benefit with a reduction of approximately 2.4 million people, it will no longer have to serve. Additionally, this will add a 7% increase from Phase 2 on per capita public health spend.
“The health system stands to benefit in more immediate and visceral ways. The reduced load on the public sector will result in a reduced burdens on doctors, nurses and other healthcare workers, will reduce overcrowding, shorten queues and free up funding to fix infrastructure, fund unfunded medical posts, and grow our medical skills training capacity – remember, we have a shortage of 27 000 nurses in South Africa, and this is expected to grow to 70 000 by 2030.
Not only is the idea not new, says Friedland, but similar approaches are adopted elsewhere. In Africa 61% of countries have contributory mandatory programmes for civil servants and 50% of them programmes for sector employees.
The private hospital sector, says Friedland, stands ready to explore this idea and others that result in lessening the load on the shoulders of all South Africans who need accessible quality healthcare today.
“We stand ready to collaborate on further system strengthening, to more private public partnerships, to addressing public sector elective surgery waiting lists, to joint efforts on human resource training collaboration,” he says.
