Bank On This Man

Twenty eight million. That’s the number of people in Africa who will die from cardiovascular illness, diabetes, and other non-communicable diseases, according to the World Health Organization. That’s 46% of all deaths in Africa by 2030. Half of these deaths, according to a 2017 article in the BMC Public Health journal, are because hospitals aren’t good enough.
“Large numbers of our people continue to die prematurely and to suffer unnecessarily from poor health. Treatable conditions are not being treated on time and preventable diseases are not being prevented,” says South Africa’s Health Minister Aaron Motsoaledi on his department’s website.
It is because times are tough in South Africa. Gross domestic product growth was -0.7% in the first quarter of 2017, while unemployment increased to 27.7%. Medical aid is expensive. It costs about R4,500 ($340) a month, on average, for a family of four. That is almost half of South Africa’s average salary of R10,680  ($815) per month, according to BankservAfrica. It means a mere eight million people, out of 55 million, can afford cover.
To make matters worse, last year, 16 of the top 20 medical aid schemes had to reach into investment funds to stay afloat. It also meant that, this year, scheme members received price increases, on their cover, far higher than consumer price inflation.
<a href="http://www.forbesafrica.com/cover-story/2017/10/02/suffering-waiting-wrong-side-divide/" target="_blank" rel="noopener">READ MORE: Suffering And Waiting On The Wrong Side Of The Divide</a>
It is so bad the South African government wants to start National Health Insurance (NHI), the first step to free healthcare for all, by 2025, bankrolled by the tax payer.
The NHI White Paper says the money that people pay for private health should be directed to funding the NHI. According to Paula Armstrong, an economist at Econex, an economic consulting firm, even though medical schemes received about R18.5 billion ($1.4 billion) from a medical scheme tax credit, in 2014/15, redirecting some of this money won’t be enough and it is the poor who are likely to suffer.
“The removal of medical scheme tax credits will affect poorer medical scheme beneficiaries disproportionately. In total, 21.86% (1.9 million in 2016) of medical scheme beneficiaries will move above the affordability threshold with the removal of tax credits. The disproportionate effect on relatively poorer households will need to be considered when evaluating the rationale for removing medical scheme tax credits to help fund the NHI,” she says.
Some medical aid schemes are suffering anyway. Between 2000 and 2015, according to Alexander Forbes, the number of medical aid schemes reduced from 144 to 83. If government presses ahead with free health, they are going to lose out even more.
“I see small schemes consolidating and move into larger risk pools… Bigger pools provide bigger sustainability and that’s where I think we will see smaller schemes suffering, going forward,” says Gerhard Van Emmenis, Principal Officer of South Africa’s second largest open medical scheme, Bonitas Medical Fund.
The big question is how many of these medical aid schemes will survive.
“We do believe, at Bonitas, that we should have both, private medical schemes and NHI. You can’t just destroy or dismantle national assets like medical schemes that have proven over the years that they can contribute to the healthcare industry,” says Van Emmenis.
According to the White Paper, NHI will tackle the most needy first. That is healthcare at schools, childhood cancer, women&#8217;s health, the elderly and the disabled. Most of the people will have to wait.
“For NHI to be a success, collaboration between medical schemes and government is essential. There needs to be agreement on the roles of both players as well as which benefits will be covered by the NHI and which can be offered by the medical schemes.”
<div id="attachment_33740" style="width: 506px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-33740" class=" wp-image-33740" src="https://www.forbesafrica.com/wp-content/uploads/2017/10/Gerhard-Van-Emmenis-Bonitas-e1506931303492-300x199.jpg" alt="" width="496" height="329" />Gerhard Van Emmenis, the Principal Officer of Bonitas. (Photo by Motlabana Monnakgotla)</div>
According to Van Emmenis, specific conditions, such as mental and dental, may not be fully covered by NHI. This is the gap where private schemes could find business. Van Emmenis says medical aid schemes should find a way to work with government, instead of fighting it.
“Primary healthcare might be accessible to everyone, but then there’ll always be a complementary environment with dental benefits and a lot of other things, which is not necessarily life threatening but can improve the quality of your life. You may need packages that will attend to stress, for instance… That’s where we are going to play a part in the future,” he says.
<a href="http://www.forbesafrica.com/cover-story/2017/10/02/healthcare-got-available-everybody/" target="_blank" rel="noopener">READ MORE: Healthcare Has Got To Be Available To Everybody </a>
The problem is, there is no clarity on whether people will be allowed to belong to a private medical aid scheme in the future of free health. To make it worse, the cost of the NHI is likely to be heavy, according to Econex. It is expected to increase healthcare costs from R121 billion ($9.2 billion) for the 2015/2016 fiscal year to R256 billion ($19.5 billion) for the 2025/2026 fiscal year. The government argues it is not going to be expensive but Econex says the annual health budget is likely to increase by R200 billion ($15 billion), and not the R108 billion ($8.2 billion) stipulated in the White Paper.
NHI not only faces money problems but also has scarcity at hospitals and a blundering bureaucracy. To add to that, it would use a standard price list that may be cheaper for patients but, in the long term, less rewarding for doctors. Doctors could work longer days for less money and could look outside Africa for work.
“You’d get an orthopaedic surgeon that only works on hands and is a specialist in that… That guy will detect what sort of charges he’ll charge for his services. You can’t just take it away and decide to pay all orthopaedic surgeons the same money. I can promise you which one will be on the first plane leaving the country, it will be the guy who’s a specialist. If a doctor leaves this country today, it takes us at least seven years to replace that doctor,” says Van Emmenis.
The private hospitals that are left will also suffer.
The 2014 National Income Dynamics Study, by the Southern Africa Labour and Development Research Unit at the University of Cape Town, surveyed 28,000 people in 7,300 households and found that 41.5% of them used private healthcare in their last medical visit.
“The reality is that many people use a combination of both sectors. It means the number of people with medical aid does not equate to the number of people using the private health sector. The converse is also true with some medical scheme members using public hospitals or state clinical protocols for the treatment of specific conditions such as tuberculosis,” says Van Emmenis.
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Van Emmenis says Bonitas is in favor of healthcare being cheaper and wider, but wants more consultation.
Matthew Prior, Funder Relations and Health Policy Executive at hospital group, Life Healthcare, concurs.
“Until the NHI benefit structure has been defined it is difficult to say what the impact will be. In addition, the role of private medical schemes is couched in vague terms, as the benefits that will be offered by the NHI have yet to be determined,” he says.
Life Healthcare had about 600,000 admissions, in 2016 alone, excluding outpatient and emergencies, and 95% of those were patients covered by a medical scheme. Prior says Life Healthcare agrees with the fundamental objective of the NHI but much depends on how it is implemented. He says improving the nation’s health, by addressing the challenges within the healthcare sector, is a massive undertaking and a responsibility that government should not shoulder alone.
“Although the White Paper mentions shortage of staffing, there does not appear to be a coherent plan to increase supply of medical professionals to meet NHI demands. A massive re-organization of the entire healthcare system, where there is an acknowledged shortage of management skills, places any fundamental change to the healthcare system at risk,” he says.
Prior says it is also not accurate to assume that by changing the financing structure and directing more money to the public sector will, on its own, improve the delivery of quality healthcare to all South Africans.
“The key issues around healthcare resources, management skills and leadership must be properly addressed. Recruitment of doctors on contract from foreign countries is a necessary measure in the short-term but it does not build long-term, sustainable capacity in the country,” he says.
Making matters more complicated, research by Econex shows that removing medical aid tax credits will make medical aid schemes too expensive for one in five.
“Members leaving private healthcare will place additional burden on an already overburdened public sector. One would also need to carefully monitor whether organized labor will accept the impact of the tax credit removal on net income,” says Prior.
If history is anything to go by, this is not the end for medical aid companies. About 10 years ago, South Africa introduced the Government Employees Medical Scheme. It got many worried, but some private medical aid companies, like Bonitas, grow regardless.
“Bonitas had 85,000 members that belonged to government that had to go to GEMS. We had about 216,000 members and everybody thought Bonitas was going down, but today we have about 350,000 members… So with the possibility of NHI, we have shifted our emphasis and visions to developing products that can and will be complementary,” says Van Emmenis.
Private money is likely to survive the biggest shake-up in Africa’s health system, whatever the weather.

Batten Down The Hatches

At the Khayelitsha Youth Clinic Site C the reality of South Africa&#8217;s overburdened healthcare system hits home. Many have got out of bed before sunrise, some have traveled 600 kilometers to be here, for the long wait for the hope of seeing a doctor. This clinic tells the story of a land where eight out of 10 people can&#8217;t afford to see a doctor. At least here it’s free. But the shortage of doctors means a snaking queue that stretches down the street every day.
&#8220;When a patient from the Eastern Cape (600 kilometers away) comes to our clinic with a broken neck to be seen by a doctor here, you need to say that is unacceptable,&#8221; says Dr. Zahid Badroodien, who works in this clinic every day, 30 kilometers south east of one of South Africa&#8217;s richest cities, Cape Town.
&#8220;This facility sees 200 people a day and we turn people away. We have three or four doctors here depending on the day. We need more people to come into the system.&#8221;
This clinic is just a small cog connected to a large lumbering wheel that tries to treat 40 million people in South Africa. Government says that over 80% of South Africa&#8217;s population can&#8217;t afford medical aid and 30% of the country&#8217;s doctors try to treat them. The majority of the country’s doctors work for paying customers who can afford medical aid.
<a href="http://www.forbesafrica.com/cover-story/2017/10/02/batten-down-the-hatches/" target="_blank" rel="noopener">READ MORE: Batten Down The Hatches</a>
This is why the South African government is fighting for three letters. They call it the National Health Insurance (NHI) and it should mean more hospitals and more care leading to free health. In other words, it&#8217;s another medical aid scheme; but the government promises it will cover you regardless of your social status or wealth.
&#8220;Our country believes that access to healthcare is a human right. This means every single one of us is entitled to receive healthcare. It should not depend on how rich we are or where we happen to live. The right to obtain healthcare is written into our Constitution,&#8221; says Aaron Motsoaledi, the Minister of Health who sees this as his legacy.
In order for NHI to be a success, it will cost R256 billion ($19.5 billion) by 2025, according to government estimates. They plan to find the money for this through tax.
&#8220;The amount spent on the healthcare for each person with a medical aid scheme is five times the amount that is spent on each person who relies entirely on public health facilities,&#8221; says Motsoaledi.
&#8220;Even for South Africans who earn a good income, healthcare has become a burden because private medical costs have skyrocketed in recent years. Working people are spending a large chunk of their salaries on medical aid and this often causes financial constraints in their household income,&#8221; he says.
Motsoaledi has been the driving force behind the NHI. He is considered to be one who practices what he preaches. In 2013 and in 2015  he chose to be admitted in public hospitals rather than going to private facilities. Motsoaledi is also a qualified doctor who worked in rural KwaZulu-Natal. He has seen the state of public hospitals firsthand. Motsoaledi is a champion of the fight against TB and HIV/Aids treatment that has saved the lives of millions of South Africans. But, finding the money for NHI and keeping medical aids in line could be one of his greatest battles.
There is controversy long before NHI happens. Government plans to withdraw tax incentives from medical aid schemes, worth R20 billion ($1.5 billion), which will go into the NHI fund. People will be free to pay for private health insurance, but they will also be forced to make contributions to the NHI fund.
&#8220;Private care at present is often needlessly expensive,&#8221; says Motsoaledi.
<a href="http://www.forbesafrica.com/cover-story/2017/10/02/healthcare-got-available-everybody/" target="_blank" rel="noopener">READ MORE: &#8216;Healthcare Has Got To Be Available To Everybody</a><a href="http://www.forbesafrica.com/cover-story/2017/10/02/healthcare-got-available-everybody/" target="_blank" rel="noopener">&#8216;</a>
According to Precious Matsoso, Director General at the Department of Health (DOH), the NHI will not kill off the private healthcare system, but says it needs to learn to adapt. One concern government has with medical aid is when medical cover is exhausted and funds run dry; it means people remain without cover for the rest of the year.
&#8220;Under the interim period, medical schemes will continue to function, however they will be reformed to be aligned to the NHI. This means that they will start to offer services consistent with the NHI. There will be fewer options and schemes. Prices will be reduced, making medical schemes more affordable. In doing so, there will be a cross-subsidization,&#8221; says Matsoso.
There will be some room for negotiation. Overall the NHI plans merely to pay for health for the masses and doesn&#8217;t intend to manage doctors and hospitals. Here, it is prepared to enter into contracts with private business.
Another question is whether government is even capable of managing what will become one of the largest state-owned enterprises in the country. South Africa&#8217;s track record is dubious, with the likes of Eskom and South African Airways under scrutiny for losing millions.
Government shares the concern that the quality of care in public hospitals is deteriorating in the areas of staff attitudes, waiting times, cleanliness, drug shortages, infection control and safety and security.
The South African Medical Journal (SAMJ) released a report in June stating that the most significant reason doctors gave for leaving the public sector was dissatisfaction with working conditions.
There is a substantial difference in the standard of working conditions between the public and private sectors. The survey, from 2,225 doctors, showed 60.73% of public sector doctors said availability of supplies was inadequate versus only 10.15% of private doctors. What’s more, 66.37% of public sector doctors indicated concern over lack of equipment and infrastructure, with 38.78% indicating hygiene and management was not of a good standard.
Both public and private sector participants reported that nursing and other support staff was inadequate. However, almost half of the doctors working in public service were dissatisfied with support staff versus 21.5% of private sector doctors.
The report, conducted by the Colleges of Medicine of South Africa (CMSA), and including members from the South African Medical Association (SAMA), found further reasons for doctors leaving were emigration, better opportunities in private practice, as well as being unable to apply for posts as they were frozen.
In KwaZulu-Natal, which has a population of 10.2 million, a serious blow came when a group of oncologists left over poor working conditions. With only two state cancer specialists remaining, both practicing from Grey’s Hospital in Pietermaritzburg, the province faces an unprecedented backlog with patients waiting for treatment from as far back as 2011.
This threat to the KwaZulu-Natal health department is just the tip of the iceberg. Other provinces, such as the North West and the Free State, are under strain, says Badroodien.
This is before the NHI has even been implemented.
&#8220;It&#8217;s not just the funding or the lack of doctors, it&#8217;s the other things tied to it: the lack of skills, the lack of resources, and all the external issues, like the NHI. The national health department now finds itself at a tenuous junction. The NHI is something we do need, but you need to look at the numbers. The DOH is trying to squeeze money from cracks,&#8221; says Badroodien.
All this while the queues of patients grow longer.
<h3>Examples of what the NHI package will exclude:</h3>
<ul>
<li>Cosmetic surgery that is not necessary or medically indicated but done as a matter of choice</li>
<li>Expensive dental procedures performed for aesthetic purposes and eye-care devices, such as fashionable spectacle frames</li>
<li>Medicines not included in the national essential drug list</li>
<li>Diagnostic procedures outside the approved guidelines and protocols as advised by experts groups</li>
</ul>

Tag: medical aid

FORBES AFRICA SOCIAL MEDIA

Bank On This Man

Batten Down The Hatches

Suffering And Waiting On The Wrong Side Of The Divide