Programme Director Dr Anban Pillay,
DDG for at NDOH, Professor Yusuf Veriava,
Chairperson of the Council for Medical Schemes Dr Monwabisi Gantsho,
Registrar of the Council for Medical Schemes Mr Tom Borrill,
Chairperson of the BHF Dr Humphrey Zokufa,
Managing Director of the BHF Distinguished Local and International Guests Delegates
Ladies and gentlemen
Thank you very much for the opportunity afforded to me to address the 14th Annual BHF Conference themed ‘’One Vision, One Future”. It is indeed an opportune time for such a theme as South Africa is at the cusp of a significant and historic milestone of introducing a universal health coverage system whose objective is to achieve a long and healthy life for all citizens.
On the eve of the 20th Anniversary of our democracy I believe it is important to take stock of the progress we have made as a nation in effecting the constitutional obligation of ensuring the realisation of health, including reproductive health, as a human right citizens. I would also take this opportunity to call on you to contribute a vision and a future that should build greater human solidarity and ensure security of access, quality, efficiency and effectiveness of the Health System for the benefit of all people of South Africa.
Delegates, The enjoyment of Peace, Justice, Democracy and Development have enabled our nation to improve her health, in particular to address significant socio- economic determinants for ill-health on children, women, youth, workers and the population at large.
The child mortality health has significantly improved, with deaths from severe malnutrition and preventable diseases like measles, malaria and diarrhoea almost substantially reduced. These achievements were largely because of better access to potable water, energy, shelter, poverty relief as well as the improved health specific intervention such as vaccine coverage and environmental health. Over 40% of PHC services, including Maternity Obstetrics Units, have been built and resourced and secondary and tertiary services strengthened as referral nodes.
Through regulatory policy interventions oesophageal and lung cancers are on the decline in our country. We have over the past few years begun to be effective in controlling the HIV and AIDS epidemics with a decline from 8,5 % to 2,7 % of Mother to Child transmission of HIV and over 2 million people on treatment. During this we have also intervened to reduce the cost of ARV`s by 53% which interventions we have extended to the purchasing of other medicines.
The South African health system has undergone a number of transitions over the past two decades. Within the area of health financing, government has at various times intervened in the determination of mechanisms in which health services should be financed. Under the leadership of President Nelson Mandela government declared primary health care services free of charge, initially for children, people with disability and pregnant women, and later on for the entire population. The introduction of the Uniform Patient Fee Schedule for public hospital services was intended to ensure that the population access health services in a rational manner but at the same time that mechanisms are in place to ensure that those that are not able to afford the stipulated fees are not denied access to the health services they require.
Similarly, for the private sector, interventions were introduced to strengthen overall private health insurance regulation in the form of the Medical Schemes Act in 1998. The Act brought into effect the key elements of community rating, open enrolment and prescribed minimum benefits. The department recognises that the Medical Schemes Act needs amendment to address a number of new developments that have adversely impacted on the performance and growth of the medical schemes industry. These matters are being considered and various efforts are being considered, in collaboration with other government departments and agencies, as to how best these matters can best be holistically addressed.
The medical schemes industry possesses a number of innovative skills and abilities that can be drawn upon to further strengthen the performance of the health system. Some schemes are at the forefront of cutting edge developments with regards to ICT innovations and have been able to yield benefits to members in the form of fraud detection and prevention. Other schemes have developed a niche by developing benefit options that are linked to a member’s lifestyle and consumption habits.
The Government Employees Medical Scheme, a relatively new scheme in the industry, has also recorded some key success in the areas of member enrolment and keeping costs down. These successes have been achieved as a result of the relationship that the scheme has with private partners, which provides a good learning platform of how best to draw on public and private resources for the benefit of the population.
We must be proud that by working together , by leveraging evidence based knowledge , by investing in innovative medical science and by strengthening the health institutions we have been able to also increase the life expectancy of South Africans from 49 years in ....... to 60 years in 2012.
Ladies and Gentleman, with health as core to the sustainable development agenda , finding an appropriate balance between health care financing and access to health as a basic human right has become a high priority for many if not all nations globally today. To highlight this point let me quote the President of the World Bank at the 66th WHO Assembly in May this year on the subject matter.
“First, let’s make sure that no family, anywhere in the world, is forced into poverty because of health care expenses. By current best estimates, worldwide, out-of-pocket health spending forces 100 million people into extreme poverty every year, and inflicts severe financial hardship on another 150 million. This is an overwhelming form of affliction for people, as the anguish of impoverishment compounds the suffering of illness. Countries can end this injustice by introducing equitable models of health financing along with social protection measures such as cash transfers for vulnerable households.
Second, let’s close the gap in access to health services and public health protection for the poorest 40 percent of the population in every country. Improving health coverage and outcomes among the poorer people of any country is critical to building their capabilities and enabling them to compete for the good jobs that will change their lives. We have to close health gaps, if we’re serious about reducing economic inequality, energising countries’ economies and building societies in which everyone has a fair chance.”
Delegates, A lot of progress has been made and we have reason to celebrate - but still a lot remains to be achieved.
South Africa is entering an important era in its history. Almost twenty years since its democratic dispensation in 1994, attempts to reform the health sector have yielded mixed results. As we move closer to the next target of life expectancy of 70 years, we should all acknowledge that even with the best partnerships and the best science available there can never be enough resources to fund uncontrollable rise in ill health - neither by the public purse nor the private purse. Our collective efforts as a society must therefore be to ensure that we work together and resolutely to reduce the disease burden and become more efficient in the use of available health resources so that every one of our citizens can access quality care in the eventuality of sickness.
I am certain that we all agree that part of securing our future is meeting the health needs of the current generation by entrenching a sustainable health system that will ensure that the health needs and expectations of future generations are adequately catered for. Health reform is a critical ingredient for achieving this as it is pivotal to the realisation of social and economic development goals.
HIV/AIDS with TB; Maternal and Child Morbidity and Mortality; Non Communicable Diseases like hypertension, diabetes and cancers; Trauma and Injury; as well as Mental Illness are five areas that present the highest burden of disease on our citizens, our communities , our economy and our nation. This is a burden our development project, within the National Development Plan 2030 framework, can ill afford.
Over the years, we have continuously experienced a two-tier health system that is divided along the lines of socio-economic status, with those having private medical insurance with access to a better resourced highly priced largely curative health services and those publicly financed with access to lesser resources comprehensive health services in a public health system. The public health system from time to time has to absorb those who are subject to catastrophic health experiences whose costs the profit based private health system is not prepared to carry.
Available evidence indicates that the majority of the South African population rely on the public sector for their health needs. However, the sector is still plagued by a mix of challenges including shortage of key human resources for health such as pharmacists and specialists, many people encounter long waiting times at many of our health facilities as well as poor management systems and processes, including quality assurance. This leaves many of our people despondent and makes them more vulnerable to the risks of only presenting in advanced disease or to catastrophic health-related expenditures as they consider the private health sector as an alternative.
Further evidence indicates that the private health sector is unfortunately also not innocent with regard to the challenges facing the South African population. Despite having a relatively well-developed medical schemes industry with what is generally referred to as world-class private healthcare, many people who rely on the private sector for their health needs face similar problems from a different perspective. The cost escalation that characterises many services in the sector directly impacts on the ability of individuals and households to maintain their contributions to the medical scheme of their choice.
Moreover, the tendency for private sector costs to increase way above inflation is detrimental to the ability of people to afford the medical scheme contributions as well as for the sustainability of the national health system. In fact, it is not uncommon for many medical scheme members to be faced with the full costs of care simply because their benefits have been exhausted long before the end of the financial year. The consequence of this is that people are expected to a wait until they are critically ill or meet a huge portion of their health costs out of pocket. This has been shown to be catastrophic in many contexts, with health care being continued in the already underfunded public health system as the only available alternative.
The current health services delivery approach is also fraught with serious shortcomings. Many of the health services that we render in our health facilities, more so in the private sector, are focused on hospital-based care. There is very little emphasis on providing health promotion and prevention services. Instead, the focus is placed on rendering curative care at the higher levels of care where it is known that it is more costly to provide care than at the lower level. The strong for-profit focus in the private sector has led to a hospicentric approach with inexorable commercialism which undermines the provision of health as a public good. Because of the elasticity of demand and the public good characteristics of health, it is important to note that the 8% of GDP in health has not only gone into direct health care but also into huge profit margins, especially by the private hospital sector which are one of the most lucrative investment options in the country even during periods of economic downturn.
The factors that I have just outlined clearly indicate that the status quo cannot continue. Government must take decisive steps to redress the fragmentation in the health system that is depicted in the two-tier system of the public and private sectors, as well as to protect the right of the population to health promotion and care services regardless of which sector they use. I trust our common vision as a nation is that we must transform our health system into a truly social institution, one that promotes social solidarity, risk pooling, efficiency, effectiveness and affordability. The National Health Insurance as a universal health coverage system of South Africa, aims to achieve this vision.
In this regard we agree with Dr Margaret Chan, the Director-General of the World Health Organisation, who states that:-
“… universal health coverage [is] the single most powerful concept that public health has to offer. It is inclusive. It unifies services and delivers them in a comprehensive and integrated way, It is the best way to cement the health gains made during the previous decade. It operationalises the highest ethical principles of public health. It is a powerful social equaliser and the ultimate expression of fairness. The recent enthusiasm for universal coverage occurs in a world in which social inequalities, in income levels, in opportunities, and in access to health care, are at the greatest levels seen in at least half a century.”
Following public consultations and feedback received on the Green Paper on the National Health Insurance for South Africa, the Minister of Health, Dr Aaron Motsoaledi led an extensive process of engagements with various sectors and stakeholders. We are aware that the nation is patiently awaiting the final policy and I can assure delegates that we are almost at the conclusion of the process and the introduction of the draft White Paper as a policy for the consideration of Cabinet is imminent.
The Policy on the National Health Insurance (NHI) in South Africa takes into consideration all three dimensions as outlined by the World Health Report 2010. We want to re-engineer the manner in which human, infrastructural and financial resources are mobilised and harnessed to promote universal health coverage. The following principles will guide the implementation of this NHI system, namely :-
- Progressive realisation of the right to access health care as outlined in the Constitution under the Bill of Rights;
- Social solidarity – that all the sick must be appropriately supported regardless of their socio-economic standing ;
- Equity – that all people should equitably contribute to a common fund;
- Effectiveness – interventions and health services covered must be evidence based and address the country’s burden of disease;
- Efficiency – that the resources available must be utilised to achieve the best possible improvements and health outcomes that contribute to optimal quality of life, productivity and increased life expectancy ; and
- Affordability – that the problem of higher that inflation cost escalation be tackled to ensure that the health system is sufficiently sustainable to meet the health needs of both current and future generations.
We realise that National Health Insurance is not a panacea for all the inadequacies that characterise the health system, we are certain that once it is implemented it will act as a catalyst to achieving key milestones. We have already begun to strengthen the under-resourced and under-performing public sector. We are working with the private sector and development partners to strengthen management, security of commodities, health professionals recruitment , infrastructure development as well as information technology systems. Already the National Health Act has been amended to provide for the establishment of the Office of the Health Standards Compliance which incorporates the Health Ambudsperson.
Program Director, let me take this opportunity to raise a few concerns that the medical insurance schemes industry need to be addressed as we advance towards the full roll out of the NHI over the next decade.
1) There are a number of products on the market that create the impression that they are doing the business of a medical insurance scheme when they are a short term insurance product. We need to regulate these products either as a medical insurance scheme or a short term insurance product. The Department of Health is currently working with National Treasury to finalise regulations that would provide clear guidance on the regulation of these products.
2) Should the currently trend of high costs continue unabated, the pressure that threatens the sustainability of medical insurance to meet the comprehensive health needs of members will increase. In this regard we support the initiative of the Competitions Commission on the Pricing Enquiry.
3) In their 2011/12 annual report the Council for Medical Schemes (CMS) revealed that there was a 5% decrease in the number of medical schemes over the period with 94 medical schemes offered over 300 benefit options. This creates immense difficulty for consumers to select a medical scheme option. We have noted that a significant number of medical scheme members have little understanding of the actual benefits that their selected scheme offers. The majority of medical scheme members are also the most educated South Africans yet they have difficulty understanding the product they have purchased, an indication that the industry should be more patient orientated by reviewing the structure and the plethora of benefits . The reported complaints related to the system of prescribed minimum benefits may also be an indication that between the scheme, provider and member there is often no clear understanding of the benefits within each option.
4) It is also concerning that a number of medical scheme members do not have the technical knowledge to engage with the scheme administrator when a claim is rejected. The Council for Medical Schemes role in adjudicating over member complaints is unknown to many scheme members. Whilst it is the responsibility of the Council to ensure that it is accessible to the public, I would like to appeal to schemes to inform your membership of the option of appealing a scheme decision with Council. This could take the form of a recording when members call the Call Centre.
5) One of the most significant contributors to the costs of the CMS is the cost of legal fees where there is a dispute between the scheme and the CMS. This is an extremely costly method of resolving disputes which medical scheme members ultimately pay for. I would therefore like to appeal to the industry and the CMS to seek alternative methods of resolving disputes that are more cost effective and produce a response within a short period of time.
The complexity and technical nature of the health industry for an ordinary person, including the medical insurance scheme products , clearly indicates the need for us as a society to acknowledge that indeed health is a public good that require us to work together to protect the population especially during the time when they are in need of care .
Programme Director, as government, we are continuously engaging with our counterparts in other contexts, specifically so that they may share with us the practical experiences with respect to achieving meaningful progress towards universal health coverage. The sharing of experiences provides us with a unique opportunity to practically engage with technical and implementation experts from countries where universal health coverage is a reality. It allows us the chance to learn in practical terms, how other countries determined their health entitlements, how they initiated various institutional and organisational changes in the areas of revenue collection and pooling, health services purchasing and the health delivery platform. We are also encouraged that local Research and Academic institutions have already begun to look at best practices and to build the knowledge pool and expertise to support full roll out of the NHI appropriate for local settings and health needs of our population.
I am most certain that the proceedings at this Conference will contribute towards guiding the future of the health insurance industry. However, it is important that industry also strategically contributes to the strengthening of expertise and know-how in the practical implementation steps that South Africa must consider as it progresses towards implementing health reforms intended to achieve universal health coverage.
This is the most apt way that the industry can positively contribute to realising a health system that is founded on “One Vision, One Future” principle and also play an indelible role in leading the way to a new era through rethinking our approaches to meeting the health needs of the population and drawing on the power of the collectively to yield maximum health benefits for the entire population.
Ladies and gentlemen, in conclusion, I would like to acknowledge the leadership of the Minister of Health, Dr A Motsoaledi in building this common vision for a common future where the health system enables the realisation of the Constitutional principles of inclusivity and fairness. I look forward to continuous strategic partnership and wish you productive deliberations and a successful conference.
I thank you all.
