1. Social Health Insurance Policy Development

2. Presentation Policy process to date Constitutional mandate Policy context WHO Ranking Key objectives Future policy options

3. Policy Process 1994 Finance Committee 1995 National Health Insurance Committee 1997 Departmental Task Team 2000 Social Security Committee of Inquiry –Health Subcommittee –Dept/Council workshops –Research –WATP –Financing research –Stakeholder reviews

4. Constitution Everyone has the right to have access to health care services, including reproductive health care (ss27(1)) The state must take reasonable legislative and other measures, within available resources, to achieve the progressive realization of these rights (ss27(2)) No-one may be refused emergency medical treatment (ss27(3))

5. Current Policy Context Public sector Private sector

7. Per Capita Public Health Expenditure 1996/97 to 2000/2001 Source: Department of Health (NHA)

8. Public sector Link between policy and implementation Centralized responsibility and accountability Flawed user fee system Declining budgets Impossible to address inequity

9. Private Sector Systematic cost increases due to fee-for- service Tax subsidy Residual risk selection Residual adverse selection Difficulties in linking to public sector Evolving low-cost market – limited due to high private hospital costs Intermediary problems

10. Medical Scheme Reimbursement of Public and Private Hospitals: 1988 to 1999 (1995 prices) Source: Council for Medical Schemes

11. Per capita health expenditure/outcomes (WHO)

12. Research Findings Conditional support for SHI Improve the public hospitals Critical to address inequities Ensure additional funding goes to health Differential amenities, not clinical services Injection of funds into public system

13. National Health Insurance Only becomes feasible over time Is not a substitute for SHI – but an end result Universal systems only exist in industrialized countries Middle-income countries typically combine tax-funded, contributory systems, and regulated voluntary environments

14. Key Objectives of Proposed Reforms Attract additional resources to social risk pools –Tax funding –Contributory (voluntary and mandatory) Entrench systems of cross subsidy –Income-based (equity) –Risk-based Reinforce public provider system –Decentralize hospital management –Basic essential services Restructure budgeting system

15. Phase 1: Development of enabling environment Phase 2: Implement preparatory reforms Phase 3: Implement statutory mandates Phase 4: Implement national health insurance

16. Development of Enabling Environment Preparation of public health budget system –Centralization of health budget –Create unit to manage conditional grants Preparation of public hospital system –Management decentralization –Coherent enhanced amenities policy –Financial injection to improve public services –Creation of minimum norms and standards –Human resource management improvement Consolidation of medical scheme reforms –Expansion of prescribed minimum benefits –Review of savings accounts, benefit options and late joiner penalties –Mandatory membership for restricted schemes –Improved regulation of intermediaries Development of policy on universally accessible basic essential services Development of integrated subsidy system –Revise the tax subsidy –review risk equalization Implement private sector cost containment measures –Address over-concentration of services and technology –Public private initiatives

17. Implement preparatory reforms Introduce the risk equalization fund Implement the revised tax subsidy Mandatory cover for civil servants State-sponsored medical scheme

18. Implement statutory mandates Mandate medical scheme membership Apply only to high income groups Implement voluntary cover for low-income groups –Move towards pre-payment system for public hospitals –Pre-payment allows access to enhanced amenities –Non-contributors still entitled to free services

19. Final Implementation of National Health Insurance Universal coverage Choice of provider still available Private providers funded via medical schemes Public providers funded mainly via Public Sector Contributory Fund, but also free to contract with medical schemes for additional revenue Central Equity Fund to allocate the reformed per capita tax subsidy to medical schemes and to the Public sector Contributory Fund Central Equity Fund to allocate revenue from risk equalization contributions back to medical schemes, according to their risk profile

20. Central Equity Fund Public Sector Contributory FundMedical Schemes Public Health Service Basic Amenities Public Health Service Enhanced Amenities Private Health Services Universal Mandatory contribution Tax subsidy

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