Let’s be pragmatic — the NHI has constructive and contentious aspects

Global comparisons of life expectancy: 1970-2020. (Source: United Nations World Population Prospects, 2022, processed by Our World in Data. Accessed May 2024)

By Susan Cleary for Spotlight

21 May 2024

Professor Susan Cleary argues that the NHI is a wide-ranging reform with both positive and controversial aspects. The key will be to find a middle ground in order to continue the journey to universal health coverage.

President Cyril Ramaphosa signing the National Health Insurance (NHI) Act on the eve of the elections is a smart move from the perspective of a political party seeking to shore up its base. The concern, though, to those of us working to strengthen the health system is whether the NHI will enable the country to move closer towards universal health coverage.

For the NHI naysayers, perhaps it would be important to alleviate some fears and concerns. The NHI is a long-term project. In the 2024 budget, Treasury reduced the conditional grant allocations to the NHI in comparison with what was allocated in the 2023 budget. While signing the NHI Bill into law is a step forward, the reduction in resources towards NHI implementation reminds us that this is a long-term project. In addition, it is likely that there will be legal challenges which will lead to considerable delays for the scheme to be fully implemented.

The NHI is a wide-ranging reform, with many positive aspects sitting alongside some key controversial aspects. Positive aspects include the opportunity to enable greater use of evidence and transparency in priority-setting through the further institutionalisation of health technology assessment processes (akin to “NICE” in the UK), as well as the opportunity to use national-level purchasing power to drive down the prices of commodities such as medicines. The role of private multidisciplinary practices (GPs, nurses, health and rehabilitation professionals, etc) in the future NHI also holds some promise to improve access to healthcare, particularly to parts of the country with limited access to public clinics.

On the other hand, there are two key controversial aspects. The first is related to what may or may not happen to medical schemes and medical scheme administrators once the NHI is fully implemented. My sense is that there is no short-term concern in this regard. A bigger concern is whether a single pot of money in the NHI fund will present a larger or a smaller corruption risk than the current situation of many pots spread across provincial treasuries and medical aid schemes.

Another concern is that the NHI reform might disrupt our ongoing progress towards universal health coverage within our existing public sector. Our public sector is not perfect, but it is a system that has equity at its heart. The common definition of universal health coverage is to provide all individuals and communities with access to needed promotive, preventive, resuscitative, curative, rehabilitative and palliative health services of sufficient quality to be effective, while ensuring that the use of these services does not expose users to financial hardship.

The two main goals of universal health coverage are: (1) The provision of quality healthcare services to those in need and (2) The avoidance of financial catastrophe in this process. Clearly healthcare is far from free – indeed it is very expensive – and so the goal of avoiding financial catastrophe is about implementing prepayment and risk-pooling mechanisms, whether these are tax or insurance based.

Let’s first look at how we are doing on the provision of quality services. The figure below plots countries according to their achievements on the Universal Health Coverage Service Coverage Index. In this context, coverage of essential health services is measured based on indicators that include reproductive, maternal, newborn and child health, infectious diseases, noncommunicable diseases and service capacity and access, among the general and the most disadvantaged populations.

On this index, South Africa’s achievement is at just over 70%, similar to many other middle-income countries. While there would be room for improvement, our performance is in line with our global peers.

NHI Global comparison of countries in terms of service coverage and quality. (Source: World Health Organization – Global Health Observatory, 2024) processed by Our World in Data. Accessed May 2024.

The second indicator is financial risk protection. The figure below plots countries against the percent of total health expenditure that is paid out of pocket at the point of use. On this indicator, we score 5.7%, indicating extremely high levels of financial risk protection.

NHI Global comparison of countries in terms of the percent of total health expenditure that is paid out of pocket. (Source: World Health Organization, via World Bank, processed by Our World in Data. Accessed May 2024)

This does not mean there are no instances of financial catastrophe. Undoubtedly there would be, particularly for those seeking treatment for certain types of cancers. That said, over the past two decades I have studied this issue extensively. Across a wide range of conditions in diverse settings, we have interviewed tens of thousands of people to understand the costs they face in using health services – everything from transport to food, shelter or accommodation, childcare, lost income, under-the-counter payments to public sector providers (which we never found), fees paid to private providers or money spent at pharmacies. This research consistently showed that the level of catastrophic spending was very low. Our performance on financial risk protection is outstanding. I celebrate the work of those colleagues who shepherded in the removal of user fees in our national health system during the dawning of our democracy. We should all be thanking them.

Read more in Daily Maverick: NHI fund will take decades to roll out — we answer your burning questions

Read more in Daily Maverick: Everything you ever wanted to know about the NHI but were afraid to ask

Despite these successes on universal health coverage, there are areas of concern for the South African health system. We do not achieve health outcomes commensurate with our level of investment. My sense is that this is driven by our relatively high burden of disease; for example, we continue to have the world’s largest HIV treatment programme. While our average life expectancy steadily increased with the introduction of antiretroviral therapy (although note the downturn from 2020 which coincides with the Covid-19 pandemic – see the figure below), the HIV epidemic has been a cruel setback that needs to be considered when we seek to make global comparisons on life expectancy and avertable mortality.

NHI Global comparisons of life expectancy: 1970-2020. (Source: United Nations World Population Prospects, 2022, processed by Our World in Data. Accessed May 2024)

Now that the NHI Bill has become the NHI Act, it is time to move on from debates about whether we need NHI or not, and rather focus on how we can make the NHI work for us.

Our public sector will be the backbone of our future NHI and so we should seek to continue to strengthen this system. It would also be wise to put in place measures to strengthen our private system given that private providers are intended to play a key role in the NHI. We should be pragmatic.

The NHI includes many exciting opportunities for leveraging big data and artificial intelligence in health systems strengthening, but at this stage we hardly have any electronic health data. A clear step forward would be the further implementation of the National Digital Health Strategy (2019-2024) which includes the establishment of a patient electronic health record, among other needed developments.

In addition, the NHI places emphasis on the achievement of a purchaser-provider split via establishing “Contracting Units for Primary Health Care” (CUPS). These new entities will contract with both public and private providers within a defined geographic area, on behalf of a particular population. The establishment of CUP “proof of concept” sites is therefore a priority, but must be done in a way that generates learning and enables adaptation to different contexts.

Let’s continue to push forward on many of these complex undertakings. It is going to take time, but it is needed, irrespective of the name that we choose to give to our health system. DM

Cleary is professor of health economics and the head of the School of Public Health at the University of Cape Town.

This article was published by Spotlight – health journalism in the public interest. Sign up to the Spotlight newsletter.

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