“The role of administrators, restricted NHI environment” by Blum Khan BHF Conference 2009 “The role of administrators, restricted and open schemes in the NHI environment” by Blum Khan

Agenda Introduction Typical Funding Models Political Realities NHI can work if… Administrators Medical Schemes

Introduction NHI build and implement phase has started Delivery, organization and funding Inherited a “Dual system” still here today “Progressive realisation” of constitutional right is an imperative Private and Public Sector polarization continues Medical schemes market remains static

Typical Funding Models Multi Payer Single Payer Competing health funds Public bodies, Private for-profit Private non-profit Minimum Standard of coverage No Risk Rating/No Risk Selection Single fund pays service providers and hospitals Run by Government or State Agency Regulated by legislation Simplicity for patients and providers with savings in overhead costs

Global Political Reality Spend accelerating as a % of GDP of OECD countries Aging populations drive health care utilisation PriceWaterhouseCoopers study - by 2020 = 21% of USA GDP =16% of GDP in OECD countries Will see far-reaching changes in national policy

SA Political Reality Total population >48 million Low life expectancy % of GDP 2006: 8.6% Burden of disease is vast e.g. HIV, TB and Malaria Public health system under-funded, over stretched Electorate expects service improvement Private healthcare seen as profiteering Ranked 175/191 WHO Overall Health System Performance Lives covered remains static (GEMS + Private Sector -)

NHI can work if…. Likely landscape Partnership between the public and private sector Most residents contribute to NHI NHI hospitals operated and administered by private contractors Licensing needs to change The private healthcare sector consolidates Likely landscape Single payer model Allow supplemental/Top Up health insurance Further consolidation of medical aid schemes Private healthcare members will pay more

Role of Administrators Available capacity Can fast track NHI rollout Sound industry experience Interfaced with providers and hospitals Governed by legislation Can deliver service standards

Role of Medical Schemes Facilitate consolidation Simplify benefit design Develop top up cover products Reposition value proposition Interface efficiently with NHI

Conclusion Planning for NHI started in 1994 Polokwane adopted the resolution Critical building blocks are in place “As Is” not sustainable GEMS = proof of concept phase Healthcare in SA is under construction Large private institutions can play a significant role Be ready to move on NHI…but proceed with caution