Freepik
WORDS ON WEALTH 

The recent tabling in Parliament of the controversial National Health Insurance (NHI) Bill sent ripples of panic through the medical and financial fraternities, with Discovery’s share price taking a dive.

It is as if people had conveniently put NHI out of their minds, hoping it would magically go away. Perhaps they wrongly thought of it as one of those Zuma-era aberrations that our new president would quietly quash.

Suddenly, there’s no getting away from it. NHI is upon us.

Its final form and how it will be funded are still open to debate. Dr Sibongiseni Dhlomo, the chairperson of the portfolio committee on health, which will convene to discuss the bill, says there will be an extensive public consultation process.

More legislation is bound to follow – the current bill simply sets out the foundations for the NHI structure, which will take at least five or six years to implement in full.

The basic tenets of the bill, on which the government is unlikely to budge, are:

  • All South Africans will have equal, free access to health care.
  • The bulk of healthcare costs will be paid directly by the NHI Fund.
  • The NHI controlling body will control the prices and tariffs of almost all healthcare products and services.
  • Certain “complementary” services will not be covered by NHI.
  • Medical schemes and other health insurance will be necessary only to cover these complementary services.

NHI will incorporate both private health care and public health care under a single system. The booklet “Understanding National Health Insurance”, issued by the Department of Heath, states: “NHI will enter into contracts with private and public hospitals, as well as private health practitioners and public clinics, to provide services Public hospitals and clinics will be made to upgrade their facilities. Healthcare facilities will only be part of the NHI system if they meet certain standards of care and are accredited by an independent body called the Office of Health Standards Compliance.”

There is no denying, among even the most vehement critics of NHI, that private healthcare funding in its present form is unsustainable. The gap between actual medical expenses and what medical schemes pay out to cover those expenses is widening by the day.

I recently received an email from a pensioner who had to undergo an operation. On his meagre pension, he has to scrape together an extra R15 000 for specialists’ fees not covered by his medical scheme.

Insurance, known as gap cover, has been introduced over the years to cover this payment gap in the case of hospitalisation, where specialists routinely charge three or four times the medical schemes’ recommended tariffs. (This gap cover is relatively cheap – a few hundred rand a month per family. My question is, why have medical schemes not simply upped their premiums by this relatively small amount to guarantee hospital and specialist payments in full?)

One thing that seems certain is that medical schemes in their current form will not survive. Specialists charging what they like will also be a thing of the past. That said, any fee negotiations with specialists will have to take into account the high premiums many of them pay for professional liability insurance, which covers them in case they are sued for negligence. Obstetricians, for example, are paying more than R1 million a year.

Funding the system is, of course, the major hurdle, and the media has been abuzz with financial experts saying South Africa simply cannot afford the hundreds of billions of rands a year it will take to implement. But while commentators bemoan how much NHI will cost the overburdened taxpayer, none I know of has examined how much people may save in medical scheme contributions and those dreaded out-of-pocket expenses.


MEDICAL SCHEME NUMBERS 

Statistics from last year’s annual report from the Council for Medical Schemes provide valuable context to the NHI debate.

  • Out of a population of about 58 million, about 9 million South Africans, or fewer than one in six, are covered by a medical scheme.
  • Gross medical scheme contributions for the 2017/18 year were about R180 billion, which equates roughly to R20 000 per beneficiary for the year.
  • Gross expenditure by medical schemes for the 2017/18 year was about R175bn, or about R5bn less than contributions received. (Schemes have other sources of income, including investment income.)
  • Of the gross expenditure, about R160bn (91%) was on health-care costs and R15bn (9%) was on non-healthcare expenditure.
  • Of the non-healthcare expenditure, about R12.5bn (83.7%) was for administration costs and about R2.2bn (14.5%) was on broker fees and distribution costs.


WHAT THE NHI BILL SAYS 

Here are the salient points of the bill as tabled, as it applies to you, the user:

  • Its purpose is to establish an NHI Fund, funded through “mandatory prepayment”, that aims to provide sustainable, equitable and affordable universal access to “quality healthcare services” by acting as the single payer and single buyer of such services.
  • Services and products will be sourced from accredited and contracted providers.
  • It will apply to all health establishments, excluding military ones.
  • It will cater for the healthcare needs of South African citizens, permanent residents, refugees, prison inmates, and certain categories of foreign visitors.
  • Asylum seekers and illegal immigrants will be entitled only to emergency services and services for “notifiable conditions of public health concern”.
  • It will cover all children, including those of illegal immigrants.
  • You will have to be registered and you will be issued with an NHI card, which you will have to present on receiving healthcare services.
  • To register, you will have to provide an identity card or birth certificate, photograph, proof of residence and biometrics, such as fingerprints.
  • You will have the following rights:
    - To receive the service free at the point of care from an accredited provider.
    - To be treated within a reasonable time period.
    - To not be refused access or unfairly discriminated against.
    - To have access to information relating to your health as kept by the fund.
    - To be treated with a professional standard of care.
    - To make reasonable decisions about your health care.
    - To complain about a service provider or service by the NHI Fund, or appeal a decision made by the fund.
  • You will have to go first to a primary healthcare service (such as a clinic or general practitioner) in order to be referred, if necessary, to a specialist or hospital. If you do not follow the prescribed referral pathway, you will not have access to the healthcare system.
  • The bill provides for complementary voluntary services not covered by the NHI Fund. For these services, you will have to pay directly or use a medical scheme or other private health insurance.

PERSONAL FINANCE