South Africa plans sweeping changes to health-care system

South Africa’s health-care system is set for a major overhaul as the government forges ahead with plans to implement mandatory national health insurance and reduce the cost of private care.

The revamp is part of an effort to broaden access to treatment in a country where first-rate facilities are available to those that can afford them, yet more than 80% of the population that doesn’t have private insurance largely relies on a public system with too few doctors and dilapidated hospitals and clinics. While South Africa spends about 8.7% of its gross domestic product on health, state facilities account for just 4.2%, government data show.

“We need a massive reorganisation of the public health-care system,” Health Minister Aaron Motsoaledi told reporters in the capital, Pretoria, on Thursday. “What we are designing here, no-one has done in the world.”

A draft law published in the government gazette proposes the establishment of a national health-insurance fund that would buy services from accredited public and private facilities, which would then provide care for registered members. While the law is largely silent on how the system will be funded, Motsoaledi said taxpayer contributions would be compulsory.

Pricing panel

A committee answering to the NHI fund board and the health minister would determine the prices the facilities could charge on an annual basis, while another advisory panel would determine what services should be offered. The government plans to fully implement the system by 2026.

A separate draft law published Thursday proposes that private doctors and facilities be compelled to charge uniform tariffs for services and that co-payments be prohibited. Under the current system, medical insurers negotiate their own rates with service providers such as hospitals and doctors, while members face varying degrees of additional payments depending on their plan.

The draft law also proposes abolishing the use of medical insurance brokers and scrapping prescribed minimum benefits in favour of comprehensive coverage.

Health insurance companies currently have close to R60 billion ($4.4 billion), or 33% of their income, in reserves which is more than the 25% they’re legally required to maintain. The additional money should be used to improve their members’ health benefits, the minister said.

The public has three months to comment on the two draft laws.

The government first proposed the phasing in of national health insurance over a period of 14 years in 2009, but it has been slow to get off the ground and operational problems have been experienced at several pilot sites.

Plan ‘impractical’

The insurance plan is “unaffordable, impractical and unfair,” because the government was unable to run an effective health-care system, Lungiswa James, a lawmaker for the main opposition Democratic Alliance, said in an emailed statement. “It does not matter how the minister tries to spin the NHI plan, the fact remains that it simply is not feasible.”

Motsoaledi dismissed the criticism.

“This issue of the poor quality of public health care is being used as a big stick to beat back NHI,” he said. “Fixing the quality of public health care is an ongoing event.”

An index of South African health-care stocks fell 0.8% Thursday, with hospital operator Netcare leading the declines, dropping 2.1% by 4:31 pm in Johannesburg. Discovery, the country’s largest health-insurance administrator, was 0.6% lower.