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Experts mull ways to fund, manage National Health Insurance

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The National Health Insurance (NHI) is likely to revolutionise health funding. This could include new, business-like approaches to health and new roles for medical aids in the post-NHI world, according to latest South African Health Review released last night.

South Africa will have to boost public health spending to about five percent of its Gross Domestic Product

South Africa will have to boost public health spending to about five percent of its Gross Domestic Product

To implement the NHI, South Africa will need to increase government spending on health to about five percent of the country’s gross domestic product – or economic output, according to the review. Published by the Health Systems Trust, the review’s launch was accompanied by the annual release of the District Health Barometer.

How the country will foot this bill is uncertain due to continued delays in releasing both the White Paper on the NHI as well as National’s Treasury’s NHI financing discussion document.  However in his chapter for  the 2013 South African Health Review, international financing expert Robert Fryatt predicted that the NHI would be accompanied by major changes in the way we fund health and how services are delivered. Already think tanks have proposed an 8 percent tax hike for the middle and upper classes, as well as payroll taxes.

In this year’s review, Fryatt co-authors a chapter with National Department of Health Director-General Precious Matsoso and argues that government could stretch resources by using a franchise model to outsource some health services to cost effectively increase access to services while improving quality.

The South African government currently uses the model to work with international reproductive health organisation Marie Stopes to provide services such as abortion in 19 clinics nationwide, he notes

Private medical must respond to social, consumer concerns to survive

With about R118 billion in contributions last year, private medical aids could also help collect revenue for the NHI – just one of the many possible roles the private sector is keen to play in the NHI, according to fellow review author and University of Cape Town actuary Shivani Ramjee.

“There is an enormous amount of openness and wanting to be involved in some way,” Ramjee told Health-e News. “We have built up immense capacity in the private sector in terms of health networks, information technology, administration…now it’s about thinking about creative ways to harness what we have moving forward.”

While she notes challenges for the sector, including escalating costs, limited coverage, and stalled industry reforms, she argues that major medical aids may be in a position to help administer the NHI and collect funds.

Major medical aids may also be able to carve out a post-NHI niche by covering services not included in a possible basic government package – just one of the creative solutions that may be able to harness private sector resources for the NHI.

“As a country, we have to be open to a variety of possible solutions and thinking to achieve what we want to achieve,” Ramjee stressed.

An edited version of this story appeared in the 30 October edition of the Cape Times and the 3 November edition of the Daily News.

About the author

Laura Lopez Gonzalez

Laura Lopez Gonzalez was the Print Editor of Health-e News Service.

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