The Arduous Path to Universal Health Coverage in South Africa
May 27, 2015
Achieving universal health coverage is the Holy Grail for any national government serious about improving the health outcomes of its citizens. For South Africa, currently in the throes of devising a National Health Insurance (NHI) scheme, the potential rewards are enormous. This is a country that continues to suffer desperately poor health outcomes despite spending a comparatively large amount on its healthcare (8.7 percent of its budget). Breaking this cycle of inefficiency and underperformance represents a huge opportunity for South Africa. But there are no easy fixes and turning NHI from concept into reality represents one of the biggest policy challenges facing the government today.
Universal health coverage is a particularly difficult objective to achieve in South Africa for three reasons. First, the apartheid system that institutionalized inequalities between the races created economic and social distortions that two decades of multiracial democracy have been unable to erase. South Africa remains one of the most unequal societies on earth and the health system reflects this reality. A well-resourced private healthcare system offers first world care and treatment that is out of reach for most black South Africans. Per capita spending on the private health sector is almost 10 times that of the public sector. Human resource allocations are similarly unequal. According to Section27, a South African advocacy organization promoting constitutional rights, 1,200 students graduate from medical school each year. Of the 600 who decide to practice in South Africa, only 150 end up in the public sector.
Second, the overwhelming—and growing—weight of South Africa’s health burdens places immense pressure on the health system. South Africa is struggling with four separate health burdens, a deadly mixture of developing and developed nation health problems. Infectious diseases are rampant, notably HIV/AIDS and tuberculosis; maternal, neonatal, and child mortality is on a par with some of the poorest African countries; non-communicable diseases are on the rise; and chronically high-rates of violence and injuries continue to blight the lives of many South Africans.
Finally, doubts surround South Africa’s ability to finance a major reform of its healthcare system. Although South Africa is now a middle-income country, the national economy has been in the doldrums for several years and there’s little hope of a recovery any time soon. Commodity prices for the raw minerals that drive South Africa’s economy remain anemic, the manufacturing sector is in decline, and the country’s creaking infrastructure has led to rolling power outages that have cut production. The Treasury has downgraded its growth forecast for the financial year 2014-15 to 1.4 percent. On top of this, donors such as the United States are beginning to scale back their funding, notably through the PEPFAR program.
These economic and structural challenges add urgency to the task of redesigning South Africa’s health care system so that it is financially sustainable and improves the quality of care it delivers. So what’s the plan?
South Africa has toyed with the idea of introducing some kind of national health insurance scheme since the 1920s. The current effort began in 2009 and has become the flagship policy goal of the country’s dynamic health minister, Aaron Motsoaledi. A final proposal that details the financial options is still being prepared. In the meantime, reforms are under way in the health system that are intended to lay the foundations for NHI. These center on improving the quality of the public health system so that it is of comparable standard to its private equivalent. The ultimate objective is to create a unitary system, financed through a central fund, where patients can select from a package of care offered by accredited health facilities, whether public or private. An Office of Health Standards Compliance has been set up to inspect and accredit these sites.
There is a long way to go. Many of South Africa’s public health facilities are in bad shape. The physical infrastructure is poor, drug supplies are erratic, and qualified, caring staff are in short supply. The focus of the reform effort is on the primary health care system; clinics are the natural entry point to the health system but are underutilized by patients who have little faith in the quality of care they receive there and prefer to enter at the hospital level, clogging the system further up. South Africa’s public sector health workforce is being reconfigured to provide better care at the point of need. Pilot projects have been set up in 11 of South Africa’s 53 districts, where private doctors are being offered stipends to help scale up services in the public system. So far the results have been disappointing, with few private doctors agreeing to take on additional duties in the public sector.
Few details have been given about the all-important issue of financing NHI. The basic concept is that the government will set up an NHI fund that will be funded by employers and taxpayers’ contributions. The fund will cover a range of healthcare services that will be free at point of delivery and can be accessed through the public or private sector. The problem is that South Africa’s tax base is already fairly narrow and placing additional burdens on its taxpayers will be a tough sell. Additional, as yet-undefined sources of funding will be required; one possibility is increasing ‘sin’ taxes on unhealthy products such as cigarettes and alcohol.
The planning phase drags on and six years into the 14-year timetable for NHI implementation, the deadline already looks overly ambitious. There have been tussles between the Departments of Health and National Treasury, which must cooperate if the scheme is going to work but appear to have different visions for the initiative. Meanwhile, the private sector has been on the sidelines of the process. The government may be missing a trick by not engaging more closely with some of South Africa’s largest companies, which have long experience in providing health care to their employees and could, for example, play a role in funding or managing projects to improve hospital infrastructure.
One thing is clear: much is riding on the success of NHI and the political costs of failure are high for the ruling African National Congress (ANC). Public disquiet among the poorest members of society about the slow pace of change are erupting in daily service delivery protests that often turn violent. The ANC is under more pressure than ever before to start delivering meaningful improvements to the lives of its citizens, the majority of whom are too young to remember the liberation struggle. NHI has the potential to address some of this disquiet by offering affordable healthcare options to even the least well off. To get there, however, will require a monumental planning effort, intellectual firepower, sustained political will, and an upturn in South Africa’s economic fortunes.