Tshabalala-Msimang, 8th annual Board of Healthcare Funders (BHF) Conference,
Sun City
23 July 2007
The Chairman of Board of Healthcare Funders of Southern Africa (BHF), Mr
Mbasa Mxenge
Board members
Distinguished guests
Ladies and gentlemen
I am happy that I have managed to attend your conference this year. I
unfortunately could not attend it last year.
Thank you very much for the invitation to attend, give a keynote address and
officially open this eighth annual BHF Conference. It is a real honour and
privilege for me to do so.
The theme of this conference, "Squaring the Circle", is appropriate and
aptly defines what we have to do in the health sector in South Africa.
Presently in many ways it feels like being caught up in "a vicious cycle" that
has to be "squared" to bring about order, certainty, structure and
sustainability.
As the Minister of Health, it is my duty and responsibility to uphold the
provisions of the South African Constitution which state that "everyone has a
right of access to healthcare services and that no one may be refused emergency
medical treatment".
The Constitution also imposes on government an obligation to ensure
progressive realisation of this right. I take this obligation seriously.
The constitutional obligation of the State is to take reasonable legislative
and other measures within its available resources, to ensure the progressive
realisation of the right.
It is therefore within the power of the State to legislate not only with
regard to the public health sector but also the private health sector. I must
say that the National Health Act No 63 of 2003 mandates the provision of a
"structured uniform health system", taking into account the obligations imposed
by the Constitution and other laws on the national, provincial and local
governments with regard to health services. The approach therefore is to treat
the public and private health sectors as elements of a "single national
system."
It is encouraging to note that in your invitation to me you indicated that
BHF subscribes fully to the tenets contained in the National Health Act through
working with your member schemes to attain access, affordability and quality in
the private healthcare sector.
We have to agree that both the public and private healthcare sectors in
South Africa are faced with huge challenges. There are problems in both sectors
albeit different in nature and substance. It is my duty and constitutional
mandate to create an environment and establish systems and processes that must
address the challenges and problems that exist in both sectors of healthcare in
South Africa. Failure to do so can be regarded as abdicating my responsibility
and thereby failing the people of this country.
Allow me to raise a couple issues that concern me when it comes to the
private healthcare sector.
Clearly the cost of healthcare in the private healthcare sector in South
Africa is high and cannot be accessed by the majority of people.
While the quality of healthcare in the private sector may be perceived to be
good, it is difficult to evaluate it intelligently in the absence of robust
health quality assurance systems in place. This matter is crucial when this
perceived quality is used to justify the high cost.
We must therefore appreciate the provisions in Section 77, 78 and 79 of the
National Health Act No 63 of 2003 which mandate the Ministry to establish an
inspectorate of health establishments, office of standards compliance and
inspections by the office of standards compliance. We have to do this so that
we can ensure that South Africans get value for money spent.
It is concerning to note that while we observed a 8,8% decline in the
expenditure of medicines dispensed by pharmacists and providers other than
hospitals compared to 2004, there was an increase in hospital expenditure from
R11 billion in 2001 to R16,1 billion in 2004/05. There was also an increase in
specialists and total non-healthcare costs. So clearly the private healthcare
funding industry paid 12,1% more for services in 2005/06 compared to the
previous year (R45,8 billion in 2005/06 compared to R40,8 billion the previous
year).
From the Council for Medical Schemes annual report, it can be deduced
that:
* almost every year, the medical schemes increase the contributions paid by
the members
* the medical schemes pay out more for services on annual basis
* there is an increase in non-healthcare costs viz. administration, managed
care and broker fees
* there is also an increase in hospital and specialists costs
* there is no direct relationship between the quality of healthcare rendered
and these increases
* there is a decrease in the medicine costs but no decrease in the total cost
of healthcare
* there is no increase in the number of participants of medical schemes.
Considering this scenario, the following questions therefore have to be
asked:
* Are there 'inappropriate gaps' in the private healthcare system that are
largely exploited by the funders and providers of healthcare in a way that does
not benefit the members?
* Is the current model for providing private healthcare insurance in South
Africa appropriate and adequate to meet the requirements of the participants
and is it sustainable?
* To what extent is the current arrangement of not regulating the fee structure
and quantum for rendering health services by hospitals and health professionals
suitable for South Africa? Or is it entrenching exploitation?
* Will we not see a decrease in the cost of healthcare if we regulate this
tariff and fee as we did with medicines? Should we not change the current "fee
for services model" to prevent over servicing?
* Do we not need more transparency with regards to the costing structure and
system of health providers so that we eliminate any perceptions of
exploitation?
Relating to these questions, the Ministry of Health is embarking on a number
of initiatives that are aimed at addressing these issues.
We are setting up a legislative framework relating to the reference price
list which will determine the cost of health services. We are establishing the
office of standards as provided for in the National Health Act to critically
look at the quality issues.
The current Prescribed Minimum Benefits (PMBs) must be reviewed as required
by legislation, so that they adequately respond to a comprehensive package of
healthcare including primary healthcare.
Legislative amendments are being made to allow for the establishment of the
Risk Equalisation Fund (REF).
We will appreciate your co-operation and contributions to these initiatives
that are aimed at improving this precarious situation. The theme of your
conference "Squaring the Circle" does help to set the tone for this so that we
can break out of the "vicious cycle" we find ourselves in. Treat these
initiatives as some of the tenets of the square we have to design.
Programme Director, I would like to wish all of you fruitful deliberations
on the issues in your programme that are aimed at "squaring the circle." It is
now a great pleasure for me to declare this conference open.
Thank you!
Issued by: Department of Health
23 July 2007
