A proposed state-run medical insurance scheme aims to give all South Africans access to quality healthcare. The National Health Insurance (NHI) would include both public and private healthcare providers. However, for the scheme to succeed, the government needs to simultaneously invest in the public health care system, and regulate the private one, says NAI researcher.

Since coming to power in 1994, South Africa’s ANC government has taken steps to combat health inequalities, reshaping a health system where high quality facilities were monopolised by the white population during apartheid.

Before starting to implement the NHI, a major reform aimed at achieving equal healthcare, the government had ordered the country’s Competition Commission to make an inquiry of the private health market, which would be merged into the state-run medical scheme.

According to the report, released on 30 September, South Africa’s private health market is uncompetitive, which is pushing up costs for patients. Furthermore, private hospitals tend to treat patients more frequently and for longer than is medically necessary.

According to the World Health Organization (WHO), the cost of private healthcare in South Africa is comparable to that in Organisation for Economic Co-operation and Development (OECD) countries, while people’s purchasing power is much lower than in those countries. Thus, private healthcare is only affordable to a small minority of South Africans. Around 80 percent of the population is served by the public health sector, which is chronically underfunded and understaffed.

Under the NHI, which is expected to be fully operational in seven years, public and private healthcare providers would cooperate to offer healthcare to all South Africans. The scheme aims to unlock private sector resources to users who have historically relied on the public sector.

However, integrating two systems that are both struggling with governance problems and low public trust is problematic, according to Lauren Paremoer, a South African scholar and NAI guest researcher. She is writing a book questioning the idea that for-profit markets are necessary and efficient mechanisms in achieving health for all.

“It seems to be a political priority of the government to strengthen the public health system and increase access to quality health care. This is an important goal. However, how it plays out in the absence of effective private sector regulation and greater investment in the public health system is unclear”, Paremoer says.

Real investment needed

The NHI is focused on increasing access to primary healthcare and strengthening the public health system. However, with limited funds, infrastructure in need of upgrading and human resource shortfalls, it will be difficult to meet demand as more people access health services.

“Unless more money is invested in the public sector and more staff are employed, the country’s nurses and community health workers, who are already under a lot of strain, will be the shock absorbers as demands increase”.

Under the NHI, only health facilities that meet basic quality standards will be considered accredited service providers. Public health facilities may struggle to meet these standards because they have historically been underfunded and overworked. In contrast, private facilities have not faced the same challenges and may more easily qualify to treat NHI-funded patients.

“Government must ensure that there is adequate staffing, that facilities are upgraded and support services like transport to hospitals, and clinics are functioning. If they introduce the NHI when there isn’t real investment in strengthening the public sector, it could result in big problems”.

Both sectors have governance problems

Both public and private sectors have difficulties with governance. Paremoer thinks that some form of oversight institutions would be necessary to ensure facilities are run in the public interest.

“Simply putting in more money is not sufficient. There needs to be an emphasis on how these resources are managed, how facilities are governed and, particularly, there needs to be an emphasis on including communities in this governance process”.

If local communities are given a say in how health priorities are decided on – through clinic health committees or representation at hospital boards – there will be more trust in the health system and greater transparency, according to Paremoer.

Risk of private push-back

The Competition Commission report in September made clear that lack of competition in the private healthcare industry is fuelling increasingly unaffordable healthcare costs.

“If costs are not contained in the private sector, people’s access to healthcare will be negatively impacted”, Paremoer says.

However, if the government tries to regulate prices, people with entrenched interests in the private sector may push back.

“Medical specialists and private hospitals might not like being told to cap their fees”.

If private sector groups feel that the introduction of the NHI has negative consequences for them, the health reform could get tied up in South African courts, according to Paremoer.

She says that the discussion relates to a bigger question of solidarity.

“How do you get people who are benefitting from the current system to make sacrifices in order to give more people access to quality healthcare? That is what it comes down to”.

TEXT: Mattias Sköld