Dr Richard Friedland | Member | Hospital Association of South Africa (HASA) | Chief Executive Officer | Netcare | mail me | 

Mandatory health cover of the formally employed is tried and tested. If put to use in South Africa this 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.

There is 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, we have raised the possibility of near-term solutions, including an under-explored alternative.

Finding solutions to the country’s healthcare problems

Private hospitals wish to work with government to find solutions to our country’s healthcare problems. The mandatory medical cover for the formally employed as a potential solution that has been well-researched over two decades. This is a workable solution that if implemented will be quick to roll out and will, in a very short time, provide enhanced healthcare to all South Africans.

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 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.

Reducing government responsibility

Government public health per capita spend 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%.

The latest per capita public expenditure based on a consolidated health budget of R271 billion works out to R5,054, 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.

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 – will allow for the expansion of the economy through recovery and an increase in employment.

The health system stands to benefit more

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, 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 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.

Related FAQs: Universal healthcare

Q: How does the NHI Bill relate to universal health coverage in South Africa?

A: The NHI Bill is a key legislative framework designed to provide universal health coverage by creating a national health system that integrates both public and private healthcare services, ensuring equitable access to quality health services.

Q: What are the essential health services included in the proposed healthcare cover?

A: The essential health services include primary healthcare, preventative care and treatment for various medical conditions, aimed at improving health outcomes for all South Africans.

Q: What role do medical aid schemes play in the healthcare system of South Africa?

A: Medical aid schemes play a crucial role in the healthcare system by providing private health insurance options that complement public health services, enhancing access to quality healthcare for those who can afford it.

Q: How will the proposed healthcare cover affect access to private hospitals?

A: The proposed healthcare cover intends to improve access to private hospitals by integrating them into the national health system, allowing South Africans to utilise private healthcare services while still benefiting from public health funding.

Q: What are the expected health service benefits from the implementation of the NHI fund?

A: The NHI fund is expected to enhance health service benefits by financing essential health services, improving the quality of care and ensuring that all South Africans can access necessary healthcare without financial hardship.

Q: How does the South African government plan to finance the universal health coverage?

A: The government plans to finance universal health coverage through a combination of taxation, contributions from the private sector and the reallocation of existing health budgets to ensure sustainable health financing.

Q: What is the impact of the World Health Organisation’s guidelines on South Africa’s health policy?

A: The World Health Organisation’s guidelines influence South Africa’s health policy by promoting best practices for achieving universal health coverage, ensuring that public health initiatives align with global health standards.

Q: Why is it important to achieve universal health coverage in South Africa?

A: Achieving universal health coverage is vital for ensuring that all South Africans have access to quality health care services, reducing health disparities and improving overall public health outcomes in the country.

Q: What challenges does South Africa face in providing universal health coverage?

A: Challenges include limited resources, disparities in healthcare access between urban and rural areas, a shortage of healthcare professionals and the need for effective integration of public and private healthcare systems.