Universal Health Care versus the National Health Insurance

Health (WCPP)

11 September 2019
Chairperson: Ms W Philander (DA)
Share this page:

Meeting Summary

The Western Cape Department of Health briefed the Committee on the National Health Insurance and the Universal Health Coverage. Members heard that the two healthcare initiatives are not exactly the same. The Universal Health Coverage seeks to provide health services to all people who need them without undue financial hardship, and ensures affordable, quality and accessible services to its beneficiaries. It also aligns to the National Development Plan and Sustainable Development Goal and strengthens Primary Health Care and community services; improves quality and patient safety; ensures the poor and the marginalised populations get quality healthcare and engages with non-state actors.

Members were pleased to get clarity on National Health Insurance being a funding mechanism that empowers government to have sufficient money to implement various models of health services. The National Health Insurance Bill seeks to establish the National Health Insurance Fund for South Africa. The Fund will be controlled by a Board, whose members are appointed by the National Minister of the Department of Health.

Members expressed concern about the failure of the National Health Insurance Bill to address the uniqueness of each community because they felt that there cannot be a singular approach to all health challenges across the nine Provinces. Members heard that there had to be buy-in from communities who had to be actively engaged in any proposed healthcare initiative. Members asked for clarity on the role of Provincial DoH in the service delivery, financing and governance; what will the impact be of the 38% cut in the budget to health services within the Province; will Parliament be given powers to have national oversight over the NHI; how will Parliament ensure accountability at the national level; will all services and items be nationally procured and paid for; and will they be acquired locally.

Members felt that health-related matters cannot be politicised as the Provincial DoH should give detailed explanations on the term medical scheme tax credits in line with the current proposal. Members did however express concern about how state-owned entities were mismanaged, and asked of the Provincial DoH was considering legal opinion on the constitutionality of its position on the NHI. Some Members expressed dissatisfaction with the presentation style of the Provincial DoH it was felt it did not reflect the status of engagements between the Provincial and the National DoH. The Committee suggested that an attempt should be made to try to invite both entities to relevant meetings in order to have a balanced view of the various healthcare initiatives.

Members suggested that the National Minister must consult widely before he approaches Parliament. The asked how the Provincial DoH should address the multitude of problems facing the PHC sector because measures should be in place to know the difficulties the communities have and improve the quality of healthcare services. Members noted that the Health sector is in a deplorable state at both Provincial and National levels. Members heard that the Provincial Treasury mainly funds UHC and the Department tries to optimise the limited funds that it gets. The Provincial DoH acknowledges the need for improvement in the health sector. The Committee advised that the Provincial and National DoH should work together to obtain a vibrant health sector and that it was very important that there should be active consultation with the potential beneficiaries of the healthcare initiative in order to facilitate buy-in from communities.

Meeting report

The Chairperson said that the agenda of the meeting was to provide clarity on the difference between the National Health Insurance (NHI) and Universal Health Coverage (UHC).

Dr Beth Engelbrecht, the HOD of the Provincial Department of Health (DoH) outlined the presentation as follows:

  • Introductory statements
  • What is UHC?
  • What is NHI?
  • Contents and comments related to the NHI Bill
  • What is the strategy for UHC in the Western Cape?

Introductory statements
Dr Engelbrecht said that health is a human and it is both emotional and personal. The health sector is a complex adaptive system as the various units and services are intertwined. For example, the hospital will be overloaded if the clinics are dysfunctional and vice-versa. The need to implement UHC is uncontested in the Western Cape. The National Development Plan provides a framework for it and Healthcare 2030 already confirmed this intention for the Western Cape. Role-players must address the various challenges confronting the public and private health sectors in the country in order to offer quality and affordable health services to the beneficiaries.  The World Health Organisation is in favour of decentralisation, continuity of care and a system's approach to healthcare services.

What is UHC?
Dr Engelbrecht said that access, quality and affordability are three important attributes of UHC. All people must have access to a comprehensive range of healthcare services, which must be of acceptable standard. It is important that this healthcare service did not constitute financial distress to the recipients. The UHC is aligned to the Sustainable Development Goal 3, which aims to achieve healthy lives and promote well-being for all at all ages. The Republic of South Africa can fast-track the UHC initiative by learning from other countries that have successfully implemented the initiative.

Understanding the NHI
There has been a lot of confusion on the NHI since the publication of the NHI Bill in August 2019. Dr Engelbrecht said that the confusion arose from the fact that the terms UHC and NHI are often used interchangeably. However, UHC is different from NHI.

She explained that NHI is a funding mechanism that empowers the government to have sufficient money to implement various models of healthcare services. It is similar to an insurance policy or a medical fund like Discovery Health. The fund purchases medical care with money pulled into it. The aim of the NHI is to achieve UHC but UHC can be achieved without the NHI. 24 developing countries like Thailand, Mexico, Argentina, Brazil, among others have successfully implemented UHC using various funding mechanisms. Each of the countries adapts unique funding models to achieve UHC for its citizens.

Dr Engelbrecht explained that the NHI Bills seeks to establish the NHI Fund for South Africa outlining its duties, functions and powers. A Board will control the Fund. The Board will be accountable to the National Minister, who appoints all the 11 Members. A CEO, accountable to the Board, will be the administrative Head. He/ she will take all decisions related to the rights of the users; responsible for all income and expenditure and establish an Investigating Unit. The Bill outlines the conditions for contracting healthcare services. It empowers the National Minister to determine healthcare benefits obtainable from the Fund. It outlines the governance of the Fund and it seeks to avoid undesirable effects. The Fund will be a sole purchaser and payer of healthcare services for all beneficiaries. Beneficiaries must enter at the Primary Health Care (PHC) level and follow referral pathways. Unfortunately, the NHI Bill does not provide information on the package of services/ benefits that the NHI will offer. Revenue sources for the NHI include general tax revenue; the Provincial equitable share and conditional grants may be diverted to NHI; medical scheme tax credits; a payroll tax and appropriations.

The roles of the Provinces in the NHI include; emergency medical services and forensic pathology services; environmental and pollution control services; health and medical services during provincial disasters. It is concerning that the NHI Bill requires Central Hospitals to report directly to the National DoH. The Fund will contract directly with health service providers for example regional hospitals, as well as District Management teams and private providers. It is concerning that the NHI Bill referred to Provinces as Citizens. The centralisation of financing, decision-making and governance of the fund, access to services and payment of providers at a national level duplicates the role of Provinces and Provincial Treasury. The implementation of NHI will drastically limit the power of Provincial Governments to provide quality and affordable healthcare to their citizens; and it will complicate accountability. The NHI Bill makes no reference to the existing public health system, which provides healthcare services to about 85% of the population. The Provincial DoH expressed concerns about the service designs, fund administration, training and flexibility of the NHI.

The Western Cape Government Draft UHC Framework of Action seeks to achieve capabilities in service delivery, governance, workforce and learning. The beneficiaries of the health system should enjoy a high quality and resilient services

Discussion
The Chairperson sought clarity on the role of Provincial DoH in the service delivery, financing and governance; the NHI Bill empowers the NDoH to buy healthcare for all South Africans. ‘What will be the impact of the 38% cut in budget to health services within the Province’? Will Parliament be given powers to have national oversight over the NHI? How will Parliament ensure accountability at the national level? Will all services and items be nationally procured and paid for? Will they be acquired locally?

Mr R Allen (DA) said that health-related matters cannot be politicised. The Provincial DoH should give detailed explanation on the term medical scheme tax credits in line with the current proposal. The Department should also give examples of countries where the initiative was implemented and the corresponding outcomes. The Provincial DoH should explain the various healthcare initiatives in terms of Schedule 2a and 3a. He expressed concern about how state-owned entities are mismanaged. ‘Is the Provincial DoH considering legal opinion on the constitutionality of its position on the NHI’?

Ms A Bans (ANC) expressed dissatisfaction with the presentation style of the Provincial DoH. The presentation did not reflect the status of engagements between the Provincial and National DoH. The Committee should try to invite both entities to relevant meetings in order to have a balanced view of the various healthcare initiatives.

Ms M Maseko (DA) commended the presentation of the Provincial DoH. She said the Bill did not specifically state the roles of administrators. It is important to note that the PHC plays critical role in the healthcare system. There are no societal and inter-governmental approaches to the NHI and this is unfair to communities in South Africa. The Members of Parliament (MPs) must be able to get buy-in from communities during public hearings. Unfortunately, most MPs do not know how to approach the public hearings when it comes to the NHI. The National Minister must consult widely before he approaches the Parliament. How would the Provincial DoH address the multitude of problems facing the PHC sector? Measures should be in place to know the difficult the communities have and improve the quality of healthcare services.

Ms R Windvogel (ANC) said the Health sector is in a deplorable state at the Provincial and National levels. The Provincial Department cannot deny the fact it was consulted on the NHI. There was a pilot in the Western Cape Province. The Universal Health Coverage requires a well-established structure and system to function. Does the Provincial DoH have that structure? Where will the funding come from? She agreed with Ms Ayanda that the National DoH should be invited to give more clarity on the NHI.

Response
The HOD said the Province started the implementation of UHC a long time ago. So, the Provincial DoH knows what the UHC is really about. The Provincial Treasury mainly funds the UHC and the Department tries to optimise the limited funds that it gets. The Provincial DoH acknowledges the need for improvement in the health sector. The Department tries to optimise its funds through active collaboration with other Departments in the Province and other partners. The Committee and other stakeholders should influence the NHI Bill in favour of the Province so that the Provincial DoH has more funds to ensure effective healthcare services to its people. The NHI Bill can provide adequate funds and UHC at the same time and these are the goals of the Provincial DoH. At the moment, there is no direct conversation between Provincial and National DoH on the Bill. The Provincial DoH does not really know if the Provincial Parliament will have oversight of the NHI. It does appear that the oversight mandate of the Provincial Parliament would be limited. The Provincial and National DoH should work together to obtain a vibrant health sector. Examples of countries that have implemented medical scheme tax credits include Ghana, Japan, Thailand, Brazil, Argentina, Mexico, among others. However, each of the countries has a unique approach towards the initiative. The NHI will purchase healthcare on behalf of the country. The current model needs refining because the current form will have a negative impact on healthcare services in Provinces. It will limit the ability of Provincial Governments to make positive difference in the health sector. It also reduces the amount of money in Provincial fiscus. The NHI has noble intention to provide healthcare to all but the approach must be well-structured. The Provincial DoH manages its procurement through a well-established Supply Chain Mechanism (SCM). The SCM is structured to ensure value for money. The Western Cape DoH has transversal tenders for 16 000 items, contracts NGOs and private providers already. It is already a purchase. However, National purchasing is critical for higher order items such as medicines.

The current Minister of Health, Dr Zwelini Mkhize, was not in Office when the NHI Bill was drafted. The NHI Bills needs to be refined if it must provide effective healthcare services to the people. The NHI makes provision for administrators, who will perform their roles when the NHI comes into force.

There should be active consultation with the potential beneficiaries of the healthcare initiative. There should be buy-in from the communities. The community must be involved in the design of a UHC that meets their health needs. The need for UHC in the Province cannot be contested. The PHC is the basis of healthcare services in the Provinces as it takes care of about 90% of healthcare services. The Provincial DoH needs more money to function optimally. The Provincial DoH considers the legal implication of its position on the NHI Bill. Inter-governmental relations are not cordial at the moment. The Constitution gave a level of authority to Provincial Government and a broader level of authority to the national government. The position of the Province on the Bill does not violate the Constitution.

Discussion
Ms Maseko sought clarity on the pilot studies that were conducted for the NHI.

Ms Bans acknowledged that the country needs funds to implement effective health services. She asked how the Provincial DoH would like the National DoH to implement the fund.

Response
The HOD said that the pilot studies were conducted in various areas across the countries. The pilot studies have its successes and failures. Overall, it does not strengthen the public health sector. The budget allocation of R20 million was not sufficient. The public health sector needs adequate funding as it provides 85% of healthcare services in the country. The National Treasury could pull the required fund from various sources and subsequently channel the fund through Provincial Governments. The national and provincial authority must ensure active engagements with other stakeholders at local levels, private sector, service provider and NGOs to ensure effective healthcare throughout the country. This will facilitate accountability and reduce the burden on the national Minister. Logic and the best interest of the beneficiaries should be considered in the design of any healthcare initiative.

Discussion
Ms Maseko sought clarity on the proposal of the HOD for an acceptable healthcare initiative. She asked further what the responsibilities of various role-players will be.

Response
The involvement of the private sector will require a Pricing Committee at the national level. The pricing must be controlled. The beneficiary does not need to pay for the service received as this will be paid for by the healthcare fund.

The Chairperson thanked the Provincial DoH for the comprehensive presentation. She also appreciated the contributions of Members and urged all role-players to facilitate active engagements during the consultation process.

The meeting was adjourned.

 

 

 

 

Share this page: