2007 South African Health Review (SAHR), Cape Town
5 December 2007
Thank you Programme Director
The Honourable James Ngculu, Chairperson of the Portfolio Committee on
Health
Patrick Masobe, Chairperson of the Health Systems Trust Board of Trustees and
other Board members present
Members of the media
Honoured guests
Ladies and gentlemen
Good evening,
It gives me a great pleasure to address you tonight as we launch the 12th
edition of the South Africa Health Review (SAHR). The Health System Trust
(HST), through all of its work, including the annual publication of the South
African Health Review has assisted the Department to build our national health
system.
The annual review - which is an external review of our health system - is in
its 12th year. The editors can correct me but I don't think there are many
countries in the world that have such a review done, independently and annually
for such a long time. When we are criticised for not being transparent we need
to hold up examples such as this as evidence of our democracy.
As you know, I have expressed my concern about the slow pace of
transformation of the private health sector as well as issues of cost
escalations, lack of transparency in pricing, its contribution to inequities
etc. To address these challenge, we called a private health sector indaba a few
months ago at which all stakeholders admitted that all was not well in the
sector. At the meeting there was consensus that government had to strengthen
its regulation of the private sector. The department is currently in the
process of examining ways of doing this.
This report therefore is timeous in that it both provides empirical evidence
of the challenges that we face as well as some suggestions of what needs to be
done. Whilst there are challenges in the private health sector, we view the
sector as a significant part of our national health system as it plays a
significant complementary role to the public health system. We need to ensure
that it plays a constructive role in strengthening the national health system
as outlined in the White Paper for the Transformation of the National Health
System as well as in the National Health Act.
As you are all aware, the ultimate responsibility for a country's health
system performance lies with government. To us, the health of our people will
always be a national priority and as the Minister of Health I have a
responsibility to safeguard the health of all communities in South Africa.
The inequities in our system, particularly between the public and private
health sectors should be a concern of all of us. It cannot be just or ethical
for the per capita expenditure in the private sector to be seven to eight times
that of the public sector. It cannot be just that the overwhelming majority of
doctors, pharmacists, and dentists are in the private sector. We have, over the
past years, exercised stewardship over the private health sector through a
number of legislative changes.
There has been extensive transformation on the funding of our healthcare
system. The Medical Schemes Act of 1998 and its accompanying regulations were
introduced as a cornerstone to regulate the financing of the private healthcare
industry. The objectives of the legislation are clear:
* First, we wanted to reverse the risk rating that had come to characterise
the sector, and we re-introduced community rating. We took the view that
cross-subsidisation should be re-established as the basis for the operation of
the healthcare market.
* Second, we introduced open enrolment, to improve access to medical schemes
for people who were previously excluded.
* Third, we introduced solvency and other financial and governance
requirements to improve financial management and governance of medical
schemes.
* Finally, we mandated a Prescribed Minimum Benefit Package to be funded by
all medical schemes. This intervention was for us, fundamental to the
reorientation of the private healthcare sector.
Similarly we also introduced a number of reforms that changed the way that
pharmaceutical companies have done business. We introduced the issue of generic
prescriptions and single exit pricing which reduced the prices of drugs. We
also abolished bonussing and other perverse incentives that characterised the
relationship between the industry and health service providers.
Despite these achievements, the private health sector is still faced with a
number of challenges, including:
* Significant increases in expenditure on private hospital. Actually, when
we introduced measures to decrease profits on pharmaceuticals, some players in
the industry looked for other places to increase profits - such is the logic of
the private sector.
* There is also an increase in specialist costs. To address this, we may have
to consider re-establishing the role of general practitioners as gatekeepers
into the system.
* Last amongst these challenges is the increase on non healthcare items such as
administration fees, managed care and broker fees.
Because of the high cost of medical aid membership, there has been a very
limited increase in medical aid membership. In fact, the only reason there is
an increase in total medical scheme membership in the country, it is because of
the introduction of the Government Employees Medical Scheme (GEMS).
The private healthcare sector urgently requires a coherent regulatory
framework to ensure that it operates in the best interests of all the citizens
of the country and not just its shareholders.
Next year, we will be using legislative changes and other means available to
ensure that the private health industry genuinely contributes to the
realisation of the right of access to healthcare as enshrined in our
Constitution. As we develop a regulatory framework for the private health
sector, we will ensure that our processes take cognisance of the views of all
the affected parties.
Therefore, the information being presented this evening comes at the right time
and I am happy that it is aimed at informing and influencing policy for the
creation of a 'better health for all.
I thank you
Issued by: Ministry of Health
5 December 2007
Source: Ministry of Health (http://www.doh.gov.za)
