Strategic Health Reform

The Round Table on Health Reform, part of the HSF’s  Quarterly Round Table series held in association with the Open Society Foundation For South Africa, was attended by some one hundred and sixty members of the public, health practitioners, government officials, financial analysts, bankers and members of the insurance industry.

Headline presenters Tebogo Phadu of the ANC policy unit and Alex van den Heever, an independent health economist led the discussion.  Francis Antonie chaired the Round Table and Jonathan Broomberg, Chris Archer, Trevor Terblanche, Joe Veriava and Hein van Eck were discussants.

Tebogo Phadu gave the ANC overview and rationale for the implementation of national health insurance and Van den Heever offered an alternative perspective.  Phadu was quick to assert that the national health insurance policy work currently on the table was an ANC initiative, and not a government one.  He expressed appreciation for being able to address a civil society grouping as he said that a national dialogue on health delivery was now at a critical juncture.  The ANC were clear in its vision that health reform would be based on a ten point plan covering all aspects of health delivery, with national health insurance one component of that plan. He said that the ANC was determined in its efforts to transform the public-private reality of current healthcare and develop a universal system of healthcare for all South Africans.  The focus of its policy direction involved an interconnected  path of reform that would not simply try to ‘fix’ the public sector, but would see a unification of what he referred to as an existing two tier health system in the country (privately funded and publically financed health systems). 

This path would see the creation of a public national health insurance fund that would be pooled to pay for services that would cover every South African citizen. This would include a free point of service with access to public and private healthcare providers. Phadu argued that an NHI would cut out wastage in the current system and control costs through cost effective practices, capitation fees and bulk buying. The institutional framework supporting this fund Phadu likened to a SARS-type organisation that would work outside the national budgetary system, have high levels of accountability and be managed by specialists and dedicated professionals.  It would not be highly bureaucratic and running costs would be fixed at 3-4% of total cost, the level he said which was to be found in most countries.  Under the health system, there would be scope for medical aids to operate within an integrated system of provision. This system would put the entire health system in a better position to influence behaviour of providers with the majority of funds flowing through one single channel.

Van den Heever pointed out that the debate surrounding health reform had become complex, so much so that one is not sure whether the various parties are talking at cross purposes or whether they are disagreeing.  For this reason it is very important to clarify the key conceptual elements that make up health reform, namely the financial issues and the institutional design.

Institutional design is about the type of health system chosen. The financial aspect of the health system occupied an entirely different area in macro health management. Van den Heever sketched out the difference between national health service (NHS) and national health insurance (NHI) with the former being typically a base system or a publically delivered tax funded system and the latter not a system at all, but an insurance model that fell outside the tax funded system.  NHI and NHS he said represent competing models with NHS about decentralising operations and accountability through a well- constructed institutional design, and NHI an ancillary system pulling healthcare in the opposite direction with a centralising agenda that, he asserted, was an illogical social delivery model.  What was needed was a holistic approach in the reform of the existing system.  This approach would have to take into consideration:

•    allocative efficiencies - value for tax spend,  achieving the best returns;
•    resource allocation – the distribution mechanism (an institutional aspect)      which he said would involve rationing (more clinics versus more cardio units); 
•    budgeting and reimbursement. 

 Van den Heever asserted that the two tier system standpoint is a false debate and takes attention away from what is actually needed in the health system.  What was needed for South Africa he argued was a competent authority that since 1994 had not existed. He cited for example many mechanisms including legislation that could be implemented to integrate health systems  that had not been applied.  Many tools were available in the existing system whose ineffective usage had strongly contributed to the skewed growth of the private sector  to the disadvantage of public health services. Trying to impose a financial model to fix an institutional problem he added created a false debate and was a non-starter. The overriding issue of health reform is the design of the structure governing health provision – a structure that had to be neutral and depoliticised.

Voices from the panel and the floor:

–  developing the debate around assumptions such as efficiencies and inefficiencies –

–  benefit package scenarios– conservative, mid range and high risk – must be developed  –

–  central costing will not necessarily lead to price decreases  –

–  the concept of alternative reimbursement is one that requires a lot of expertise and trust  –

–  inaccurate human resource data – skewing the health provision landscape 

–  access to beds in the public sector a critical need and if an NHI is a way to provide more access it is welcomed  –

–  Taylor Commission recommendations should be taken up and implemented 

–  the proposed reforms could well privatise the public health system with the majority of patients seeking out private clinics for services  –

–  key to reform is the optimising of the public private interface and for the doors of the public health system to open to private health interventions  –

–  introducing universal health services could lead to the hemorrhaging of taxpayers and health practitioners out of the country  –

–  patients migrating to the private sector are about a negative perception of the public sector, not that it is better in the private sector  –

–  raising expectations by talking about free services is wrong as someone always pays. Politicians making wild assertions are irresponsible  –

–  South Africa needs to assign value to health professionals through a Professional Retention Institute  –

–  political leadership must bring in new mindsets, attitudes and approaches to enhance health promotion  –

–  will this proposed intervention add value or contribute to raising costs?  –

–  why are traditional healers being left out of the ANC health reform plans? 

–  health workers doing an honest day’s work and being accountable will solve health problems  –