1. University of Cape Town
Making NHI affordable
Di McIntyre
Health Economics Unit
University of Cape Town

2. Health warning !! P
S L
T R C

3. Background note Take as given that public health sector:
Faces enormous challenges
Requires major interventions
Focus today is on NHI, and more specifically, the private sector in relation to NHI

4. Views on NHI General agreement across stakeholders:
Universal access to health care
Reduce differentials between public and private health sectors
Private sector stakeholders:
Public sector is the problem
“Private sector needs to be seen as part of the solution” … not as part of the problem

5. cannot be part of the solution until it acknowledges that it is
My view
Remember the TRC:
Private health sector
cannot be part of the solution
until it acknowledges that it is
part of the problem

6. Speaking of affordability
McIntyre 2009

7. Also relative to wages
30%
20%
14% 7%
McIntyre 2009

8. Analysis of IES by John Ataguba
Affordable solution ?
30% of average formal sector wages
Ability to extend cover to low-income workers ?
SHI – at lower cost benefit packages but cover all dependents
Analysis of IES by John Ataguba

9. SHI era
30%
20%
14% 7%

10. LIMS process LIMS investigation: LIMS conclusion: LIMS solution:
Demand and distribution issues (utilisation, willingness- and ability-to-pay)
Benefit design, governance & regulation
Supply-side issues (cost of services)
LIMS conclusion:
Single greatest barrier - affordability
LIMS solution:
Formalise three tier system

11. Health sector TRC Different actors’ willingness to change:
Pharmaceutical companies – cheaper for LIMS (voluntary basis and limited time)
Private hospitals – lower cost for LIMS
Medical schemes – prevent ‘buying-down’
No willingness to introduce real change:
Protect current business and get more
Time for real efforts to address problems facing private health sector

12. Key affordability issues
Administrative efficiency:
Fund collection
If NHIF, clear demarcation of relative responsibilities and restructure DoH for reduced and different responsibilities
Pravin Gordhan for CEO !!!
Purchasing power:
Large integrated pool of funds (for the majority of services)

13. Key affordability issues
Address quality perceptions:
Primary care providers
Generic medicines
Primary care gatekeepers:
Improve prestige, remuneration and responsibilities of primary care providers
Provider payment mechanisms:
Fee-for-service only for very specific purposes

14. Key message Not just about whether or not a NHI can be affordable
Is the current South African health system affordable ?
The greatest affordability challenge currently relates to the private sector
Private health sector cannot be part of the solution until it acknowledges that it is part of the problem