Medical Schemes Will Be Restricted if Proposed NHI Changes Go Through
Hospital-Plan-Quotes.co.za put these questions about the National Health Insurance (NHI) WHite Paper to Graham Anderson, CEO of Profmed:
Q: Why is the relegation of medical schemes to “complementary” to NHI a problem? Surely the public who are not prepared to deliver themselves to the mercies of government health services are much the same as those who are currently medical scheme members? Even if it means “double paying” wouldn’t the bulk of members remain members?
A: According to the White Paper, medical schemes may not offer any services that would be covered by the NHI [Editor’s emphasis]. Medical schemes will only able to offer complementary services such as plastic surgery and other procedures that are not medically critical. That being said, the medical funding industry would therefore not be viable as this is a very niche sector for medical schemes. Importantly, the White Paper does not provide clarity in terms of the funding of NHI as it lists a number of options instead of one that will be followed. Clarity is needed in this regard in order to properly understand the impact it will have on the consumer.
However, it is worth mentioning that the Minister of Health has clarified two important points in recent media interviews. He noted that medical schemes cannot be stopped from existing as medical schemes could act in tandem with the NHI. However, this means that members would then have to pay for both. Importantly in this regard, many members would not be able to afford this and would see a shrinking in terms of the medical scheme industry.
The second point of clarification he explored was around the implementation of NHI and that there would be a slow introduction to the market, where they would start firstly by providing primary healthcare and then steadily introduce new services as time went on. We support this approach as this aligns to our thinking of the implementation of NHI. It should essentially begin by covering primary healthcare as well as preventative benefits, for example screening for high blood pressure, blood sugar, etc. This will see medical schemes working in tandem with NHI which will save the consumer money by bringing down consumer contributions.
Q: How do you see the proposed changes affecting the medical schemes and, more cogently, the companies that manage the schemes?
It is difficult to say at this point as a lot more clarity needs to be provided in terms of how this will be introduced to the market. We also need to be cognisant of the fact that social health insurance takes time and if we look to examples of this worldwide we see it taking between 20-30 years.
We believe that there is sufficient funding available to the public health sector in order to provide adequate quality healthcare. We see this as an important first step in order to deliver NHI. When the public healthcare sector is running efficiently and providing the correct level of service it will be able to deliver primary healthcare to the South African public. Thereafter, additional services can be added and therefore creating a natural progression to full social health insurance.
Q: Would the proposed changes affecting the public other than that they would be more out of pocket than before?
This will depend entirely on how well it is run. We know from international experience that there are long queues and medical staffing inadequacies which bog down the public healthcare sector and result in consumers receiving bad service.
The only way consumers will be out of pocket is if they opt to pay for both NHI and medical schemes. We would need more clarity on how NHI will be funded in order to adequately calculate the impact on the consumer.
Q: Is NHI just a pipe dream and another way to fleece the public, since the state health services are woefully inadequate and there is little prospect of improvement, no matter how much money gets thrown at them?
We know that in South Africa some form of social health insurance needs to be implemented because so many rely on state sector. There is however a large portion of the country that don’t qualify for free healthcare but cannot afford medical scheme cover – it is this sector that needs to be addressed with NHI.
However, none of this can happen until the public health sector is using the funding provided to it efficiently and providing a quality service to all South Africans.
Q: Realistically speaking, what would the NHI offer people compared to medical schemes?
As addressed in the first question, according to the White Paper, everything will be offered. However, in the short to medium term, this is not feasible.
Q: How do the medical schemes benefit the public healthcare sector? (The role they play in the private healthcare sector is more obvious.)
Although there is much to be said about the state of the public healthcare sector, there are centres of excellence which attract people who can afford medical schemes. Examples include the burns unit at Chris Hani Baragwanath, in Gauteng and the Red Cross Children’s Hospital, in the Western Cape. It is institutions like these that benefit from medical schemes.
Q: Why are medical schemes not affordable to the lower LSM groups? What is it about the requirements outlined by the medical schemes act (Regulation 8) for medical schemes that makes this so?
Regulation 8 of the Medical Schemes Act is very clear, it requires medical schemes to provide full cover, on invoice price, for PMBs which are primarily hospicentric. Regulation 8 has impacted the cost of healthcare, making it more and more inaccessible to the lower income consumer. These prices, as a result of Regulation 8 have also made it difficult to offer medical schemes solutions to lower-income consumers. As an industry we did look into this some time ago and the outcome was that lower income consumers wanted access to primary healthcare and quality hospitals but legislation precludes us from being able to viably offer this.
Profmed is a restricted medical aid scheme that is open to professionals who have obtained a postgraduate qualification. Profmed offers these individuals exclusive yet affordable medical cover. The company’s vision is to address the healthcare needs of professionals through appropriate and comprehensive benefit design. For more information, please visit www.profmed.co.za or follow Profmed on Facebook.