By

Dr. Olive Shisana

Executive Director Social Aspects of HIV/AIDS and Health Human Sciences Research Council

Introduction

The focus of this presentation is on two issues: (a) the need for including national health insurance on the social security scheme and (b) more funds for research.

The 2004 Medium Term Budget Policy Statement tabled in Parliament by the Minister of Finance states that "South African's social security net is under severe threat." It attributes this threat, among other things to rapid growth in disability and foster care grant as well as the rising caseload of patients in clinics and public hospitals, largely due to AIDS.

From the HSRC's perspective, we agree with this statement. The reason for such high increase in disability grants is probably because we have increasing numbers of AIDS cases. A year ago we published a paper that showed that without AIDS, the number of deaths in South Africa in 2003 would have been about 340 000, but because of AIDS that figure is about 700 000. In the last two years of life, many of these people would have been so ill that they probably qualified for a disability grant and probably some of them accessed the grant.

Figure 1: Projected Number of Deaths, South Africa 1985-2020

Source: Rehle and Shisana, African Journal of AIDS Research 2003, 2:1-8

[PMG note: diagram not included in electronic copy]

Many of these people are dying at child-bearing age, hence they are likely to leave orphans who were depended upon them. Relatives who are left to take care of them would need additional money. Naturally if the state provides a foster care grant, they will apply for it. As shown on Figure 2 it is expected that there would be an increase in the number of orphans because of AIDS and hence the pressure on the social security system will become relentless.

Figure 2. Projected Number of AIDS Orphans

Source: Rehle and Shisana, African Journal of AIDS Research 2003, 2:1-8

[PMG note: diagram not included]

Another major pressure on the security system mentioned earlier is the increase in the number of AIDS sick patients using the public health system. In the study we conducted for the Department of Health in 2002, which they and the US Center for Disease Control and Prevention funded, we found that 26% of primary care clinics and 46% of hospital patients were HIV positive. This happened at the time when hospitals were experiencing increases in the number of patients presenting with clinical science of HIV/AIDS-related illness. Clearly this is likely to exert a lot of pressure on the health budget. Hence it is critical that the government continue to increase the health care budget, at least to meet the agreement reached in Abuja, that 1 5% of the national expenditure should be devoted to health.

But we all probably would agree that the increase in the health budget without changing the financing method is unsustainable. I believe that is the reason why the Finance Department is recommending in the Medium Term Policy Statement that future reforms include contributory social health insurance. The solution proposed by the Finance Department may not really bring sufficient money to the health care system, particularly funds that are available in the private health sector. To understand this, we need information on the proportion of the population with medical aid cover.

It is clear that there are still racial disparities in access to medical aid. Africans are far less likely to get medical aide than all other racial groups. The medical aid costs though are increasingly unaffordable for many South Africans. Even for Whites we are seeing a large decrease in the proportion that have access to medical aid, from nearly 70% in 1996 to 47% in 2003.

Table 1: South Africans with medical aide cover (%)

The trend in the proportion of South Africans with medical aid shows there has been a decrease in coverage overall from 18.1% in 1996 to 11% in 2003. This suggests that increasingly the public health sector is absorbing the patients who previously had medical aid. Yet the R66 billion of funds in the private health sector continue to provide services for these 11% , while the public sector budget for health care of R42 billion is expected to provide hospital care to 89% of the population.

I want to argue that the social health insurance policy that the Department of Finance is proposing will lead to further racial disparity in access to medical aid cover and to disparity in access to health services, at a time when the AIDS epidemic is overburdening the health care system. The Department of Finance could establish a committee to assist in developing a full national health insurance that will draw in the private sector funds and the public sector funds and ensure that all South Africans receive the constitutional requirement of access to health care. Only when we have one national health insurance, will the rich subsidise the poor, the healthy subsidise the sick, the young subsidise the old. Segmenting the population into those who have money to buy medical aid and therefore can be part of the social health insurance and those who have a little and hence rely on the public health system will only relegate each to different types of health care. It can only lead to more disparities in access to health care by race, sex and age. The result of this policy means men will continue to be the majority of users of the private health care system, while women and children the majority of the users of the public health care system.

What we probably need is a national health insurance with the following attributes:

· Universal access to health insurance;

· Based on capitation (every doctor is given X number of patients to look after and paid by the insurance to do so)

Funded through additional payroll tax plus existing public sector contribution of

R47 billion to support those who do not have money;

· All health services covered, except cosmetic surgery

· Anyone who wants to get additional private medical aid gets it only after contributing to the national health insurance.

Such a system has the following advantages:

· Enables our country to ensure the constitutional right of access to health care is attained

· Helps to contain costs in both the public and the private health sector

· Reduces disparities and inequities in access to health care and improves quality of life

People living with HIV/AIDS will also be covered by this system

Research Budget

I cannot end my presentation without making a strong appeal for additional funds for social science research that makes a difference in the lives of South Africans. We need, R40 million to support research on social sciences currently being conducted by the HSRC. We spend more time seeking funds elsewhere when much of that could be alleviated with an increase in the budget of the HSRC. An additional R40 million, escalating by R20 million each year for the next three years could see the HSRC able to undertake research to do the following:

· To support public policy development and evaluation of government programmes

· To evaluate health services provision and propose options for improvement

· Support Parliament's oversight role with evidence