Question NW631 to the Minister of Health

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15 April 2021 - NW631

Profile picture: Chirwa, Ms NN

Chirwa, Ms NN to ask the Minister of Health

In view of the repeated statements by the Council for Medical Schemes that their failure to successfully regulate and execute their duty in relation to the private sector is prompted by the fact that they have a limited workforce of just above 120 employees, what steps will he take to resolve the crisis, noting that there are heaps of grievances from patients and consumers and that these are the same medical schemes being considered for facilitating the National Health Insurance?


The functions and operations of the Council for Medical Schemes (CMS) are provided for in the provisions of the Medical Schemes Act (131 of 1998). The primary function of the CMS is to provide regulatory oversight over the medical schemes industry. The CMS’ annual performance plan, including the targets outlined in this plan, are developed and finalised by the CMS’ executive team in full consultation with the Board. These plans are intended to address the challenges that the industry is facing, especially beneficiaries. The budget for the CMS is determined through an analysis of the previous year’s expenditure including any emergent projects – this budget is based on the provisions of the CMS Levies Act (58 of 2000). The CMS budget is based on the quantum of the levy that they can raise based on the number of principal members registered with medical schemes; and the number of medical schemes members is causally linked to the level of economic growth and performance.

The resource constraints plaguing the CMS are multifaceted and include a funding model that is heavily reliant on levies, regulatory tariffs that have not kept pace with consumer price index increases over time and the overall poor performance of the economy in recent years. To assist the CMS in addressing their budgetary constraints, the National Department of Health has been engaging with CMS to develop a new funding model that is more sustainable and reduces reliance on the fiscus, innovatively minimises reliance on medical scheme member levies and progressively increases the quantum of the budget that comes from regulatory tariffs (i.e. fees charged for accreditation of administrators, managed care organisations and registration of schemes and rules). Other innovative revenue generation considerations include raising additional revenues from Board of Trustee and Principal Officer training sessions as well as from webinars and conferences.


Finally, I would like to take this opportunity to correct the impression that Government is considering medical schemes for facilitating National Health Insurance (NHI). The administration of National Health Insurance (NHI) is not going to be outsourced. There is no contemplation of subcontracting any administrator/s or schemes to manage the affairs of the NHI Fund.


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