Spotlight on NHI: Era of NHI similar to early 1990s

By Russell Rensburg

The period following the release of Nelson Mandela in February 1990 is in many ways similar to the one we are currently navigating. In the nineties, the optimism of the oppressed and dispossessed was tempered by the fear of the previously advantaged of losing a way of life they had come to accept as normal. Stories of their imminent demise dominated fireside discussions. In the years that ensued we began to galvanise around the idea of a country where an ex-prisoner would be president and where the oppressed would work together with their former oppressor for a better society.

The world loved it and despite implementing a set of progressive pro-poor policies, the economy grew at an unprecedented level. Growth was as high as 5% in the noughties. For the emerging middle class the fruits of prosperity was decreased personal income taxes. While employment grew in high skill areas, like manufacturing and financial services, there was also growth in low paying jobs in the services sector. A recent study by Leibrandt and others confirmed that while wages grew at an aggregate level, when the wage growth is viewed at the income distribution level the top end of the labour market benefited to a larger extent. This suggests that despite periods of economic growth that may have benefitted some, income inequality has deepened.

The intensity of current public discourse on race privilege and entitlement – demonstrated in part by the strong showing of populist political formations such as the EFF on the left and the Freedom Front Plus on the right – is not surprising. The lack of temerity from the governing party in implementing reforms against a narrative of state failure has deepened the social divisions, and broader social cohesion is in tatters. Much of the response to the recent release of the long-awaited National Health Insurance (NHI) Bill is symptomatic of this lack of social cohesion.

A cacophony of commentators on the NHI has focused on state capture and the government’s attempt to limit their freedom of choice and destroy the country’s health system. Fix the public system first before you touch private healthcare, they argue.

What about private healthcare?

Some say first implement the reforms proposed in the report of the Competition Commission’s health market inquiry (HMI) into private healthcare (final report due end September). But it’s a little more complicated than that.

The public and private sector compete for skills and specialist doctors. Currently 70% work in the private sector with the remaining 30% in the public sector. Those in the public sector can work as much as 30% of their time in private sector whereas those in the private sector work almost exclusively there. This means that two out of 10 specialists service the needs of 80% of the patients with the remaining eight servicing the needs of the privileged. This commodifies health and the result is that access to the healthcare you need when you need it is based on your ability to pay rather than on your need.

While the HMI report was definitive on many issues regarding the private health market, it did not assess the extent to which health services were of greater quality than available elsewhere nor is there any independent evidence that the private sector does better on health outcomes. As such it makes sense to address reforms at the whole health market.

In addition, some draft HMI recommendations like the introduction of the proposed supply side regulator for private healthcare may become redundant within a universal health system with both public and private providers.

This is not to say that the NHI Bill or the reforms it proposes are without flaws – the challenges with the governance arrangements are clear – for example, the minister of health’s role in the appointment of the NHI FUND board and CEO and the lack of clarity on the role of district management offices, amongst other concerns (which Sasha Stevenson does a good job describing). The issues raised in Stevenson’s piece are fairly simple to address and will go a long way to building public trust in the system. Similarly, analysis provided by Prof Alex Van den Heever also accurately spotlights the particular context within which the reforms need to be implemented.

Is reform possible?

That is not to say that the bill is completely without merit. I understand that, given the current trust deficit in the government, the idea of a centralised fund may be prone to corruption, but to accept it as a singular reason to reject the proposals would suggest that no amount of reform is possible and that we are unable to learn the lessons from the masterclass in corruption of the last decade.

National Treasury is in an advanced stage in tabling a set of procurement reforms that will seek to address the gaps in current procurement – an indication that there is a real willingness to learn and to make our procurement systems more robust.

Over the last nine years we have experienced a number of governance challenges that impacted on the way that provinces dispense their concurrent responsibilities in respect of healthcare delivery. While we have a sophisticated resource allocation formula that distributes nationally raised revenue for the delivery of public services, such as health and education through the provincial equitable share, it is not replicated by provincial governments. In the case of health, as funding declined post 2012, provinces mostly maintained funding at historical levels despite increasing health need and population growth. This resulted in some blunt cost-cutting measures that included delays in infrastructure maintenance and moratoria on filing critical health posts, which have led to a decline in facilities’ capacity to deliver care.

In this context, the centralisation of public sector funding for health into the NHI Fund and decentralising the delivery of healthcare to the facility level is a step in the right direction because it suggests that budgets will be informed by health need rather than historical demand. It is here that we have an opportunity to begin to refocus the health system away from a narrow focus on prevention and cure to the promotion of health in general.

Rural focus

The prioritisation of rural health in section 57 of the NHI Bill presents an opportunity to reframe the discussion of the bill towards a broader development narrative. Returning to unemployment, rural populations are deprived of opportunities, which is compounded by poor access to health, education and housing. Rural youth have among the lowest school completion rates in the country, and have amongst the highest rates of teenage pregnancy. The leading cause of death among rural men is interpersonal violence. It is not surprising that these communities have amongst the highest unemployment rates in the country.

Rural communities, particularly those in former homelands, have amongst the lowest per capita health spending despite having the greatest need for health services. The government has some culpability for the state of rural health, particularly in its neglect of rural health systems as well as wasted opportunities in using its purse to create meaningful skills development for unemployed youth. However, there is an opportunity to do so now.

Through the creation of decentralised contracting units for primary care, dedicated health funding is availed at the sub-district level. Budgets for these units will be based on overall population numbers and adjusted for relative disease burden coupled with service utilisation targets that will take health into the community, as compared to the status quo where funding is based on expressed demand.

Currently 95% of rural communities rely exclusively on the often under-resourced public sector. The NHI proposals allow for the registration of integrated practise groups that will include professionals such as general practitioners and allied health professionals, including occupational therapist, physiotherapists and optometrists to contract with the NHI. The availability of these professionals will contribute to an improvement in primary healthcare by significantly improving current referral pathways. This has the potential to contribute to better health and development outcomes.

A simple example like improving screening of eye health could lead to greater access to spectacles, which could have a massive impact on school outcomes. It’s well documented that access to good nutrition in a child’s early years drastically alters their development outcomes. Community health workers and nutritionists can bring this service closer to the people who need it most. In time, access to health improves the developmental outcomes and could lead to greater economic participation.

A public good

But why can’t the public sector make these improvements themselves? Why do we need to mess with private healthcare as the people on medical aid are already covered? Since the goal is universal health coverage why not focus on those who don’t have cover?

A universal health system that contracts in private sector capacity can ensure that health is treated as a public good and not a commodity as it is currently treated.

Undoubtedly it will take time for the broader investment in health to pay off but there are more immediate benefits. The initial investment in creating the enabling environment for the full implementation of the NHI offers opportunities to contribute to bringing unemployed rural youth into employment and giving them skills. Planned investments in health information systems also provide an opportunity to broaden the availability of these skills to groups currently underrepresented in the technology sector.

So, to end with a rural analogy, will you be at the harvest knowing that to be there requires full participation in toiling and the cultivation required to deliver a successful harvest, or will you watch from afar contemplating all the ways in which the harvest might fail?

Rensburg is Director of the Rural Health Advocacy Project.