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NHI promises equality of care







Implementing NHI will be an enormous task but promises equality of care for everyone

Jill Larkan, Head: Healthcare Consulting at financial advisory firm GTC

Whilst every South African will find it difficult to argue with the concept of National Health Insurance (NHI), a serious dichotomy exists between those individuals who are currently covered by a medical aid, who may not be willing to lower their current level of cover, and those individuals without any medical aid who would no doubt wish to see the new healthcare system implemented yesterday.

The NHI White Paper – produced by the Department of Health and signed by South Africa’s Minister of Health Dr Aaron Motsoaledi – was officially published in the government gazette on Friday 30 June 2017. The white paper is a policy document which outlines how government will attempt to pool resources to create a quality healthcare system that services all South Africans regardless of socio-economic status.

Jill Larkan, Head: Healthcare Consulting at financial advisory firm GTC says: “Who would not jump at the immediate implementation of a piece of legislation which promises so much for everyone?”

The tabled NHI system proposes the following: ‘Households will benefit from increased disposable income because of a significantly lower mandatory prepayment level than current medical scheme contributions, savings that will be made due to economies of scale, efficiency gains because of reductions in non-health care costs, and affordability of health care as a result of active and strategic, monopsony purchasing arrangements.’

But Larkan cautions that even though the white paper openly acknowledges that there is much work to be done, if this were to be implemented somewhere around 2023 (following a second phase scheduled to take place between 2017 and 2022), then as a nation, South Africa has a very busy timetable to adhere to, in order to make this happen.

Repeated throughout the white paper, is the intention of NHI, to provide a Healthcare financing system which ensures that the entire population has access to quality healthcare services without financial hardships.

It is important to note that the funding of NHI – which will eventually be managed and controlled by an appointed NHI Board – is still under discussion and some indication of advances made will be released in February, following government’s annual budgeting process.

“For now, we know that the current ‘tax credits’ from medical aids are under review, with the distinct possibility that these will in future be sacrificed and redirected towards future funding of the NHI,” notes Larkan.

Other options for funding the new NHI system, which are detailed in the white paper include:

  1. Payroll taxes
  2. Surcharge on personal tax
  3. VAT
  4. ‘Other’ – tobacco and alcohol taxes and/or carbon tax.

Once fully implemented, other sources of income will include:

  • The Road Accident Fund (RAF); and
  • Compensation for Occupational Injuries and Disease (COID)

The white paper also briefly discusses the future of medical schemes and confirms that even though pre-payment of NHI will be mandatory (the funding mechanism remains elusive), it will remain an ‘opt-out’ benefit, meaning that even though every individual will be expected to contribute towards the system, nobody is obliged to participate or use it.

According to the white paper, access to NHI will be controlled by the Primary Health Care providers, and every participant will be identified and validated via a national database linked through Home Affairs. The white paper outlines that there will be three major role players, namely Primary Health Care; the Hospital & Specialised Services; and Emergency Medical Services.

“The execution of NHI will continue to follow a phased approach ensuring the progressive realisation of the right of the whole population to adequate healthcare. This requires huge input from all players and is premised on reforms which will need to take place across all spheres of healthcare,” Larkan concludes.

Source: Paul Kruger: Moonstone Compliance (Pty) Ltd
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