National health plan ‘may cost extra R244bn’

Monday, 15 February 2010 00:00 National health plan ‘may cost extra R244bn’

CAPE TOWN — A new study commissioned by private hospitals has cast doubt on the African National Congress’s (ANC’s) proposals for national health insurance (NHI), raising tough questions about its affordability and feasibility.

Research by the Econex consultancy group shows the government will have to come up with an extra R165bn-R244bn a year, over and above the money it already spends on public health.

In the fiscal year 2008-09, the government’s health budget ran to R84bn.

“It’s fiscally unaffordable,” said Econex economist Mariné Erasmus. “We have a very small tax base, and the demand for healthcare is very high because of our disease burden.” The total tax revenue collected by the government in fiscal year 2008- 09 was about R628bn, according to Treasury documents.

The ANC’s position on the NHI scheme stems from a Congress of South African Trade Unions position paper drafted in 2000 that says everyone should be entitled to cover for virtually all medical conditions regardless of ability to pay, patients should be able to choose where they get their care, and no one should have to pay in advance. Exactly how the ANC-led government plans to make this happen is still unclear: a committee chaired by Human Sciences Research Council CEO Olive Shisana is working on an NHI policy that has yet to be made public.

Not only is there a question about where the money is to come from, but Econex has also shown that there are not enough doctors and nurses to provide the level of care the ANC aspires to.

A previous Econex study found that an extra 10000 general practitioners were needed to implement NHI. The ANC’s NHI model, described in documents leaked to the media last year, is based on a system that assigns everyone to a doctor within their community.

Erasmus also warned that the government’s plans to implement NHI within five years were “unattainable”. “No country has done it that fast. The fastest was South Korea, and even then it took 26 years,” she said.

Economist Alex van den Heever said the Econex study showed the ANC’s NHI proposals “were not technically feasible at all”.

“The major problem (with the ANC’s model) is that its an insurance-based entitlement. It’s the wrong model for SA.”

Resources should rather be directed to improving the public health system “where you plan and budget for services”, he said.

The Econex study was commissioned by the Hospital Association of SA, which includes SA’s three biggest private hospital groups Netcare , Medi-Clinic and Life Healthcare. “We wanted to put good quality research into the public domain,” said Hein van Eck, Medi-Clinic’s GM for health policy.

Shisana told Business Day last week that she expected the NHI committee would submit a policy document to Health Minister Aaron Motsoaledi by the end of the month, and then to the Cabinet. If the Cabinet was happy with the proposals, the policy would be made available for public comment.

President Jacob Zuma barely mentioned NHI in his state of the nation address, saying only that preparatory work was continuing.

Stellenbosch-based Econex, working with its academic associates affiliated to the University of Stellenbosch or the Bureau for Economic Research, covers competition economics, international trade, strategic analysis and regulatory work.

Source: BusinessDay

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