Global view of NHI cause for optimism in SA – Barry Childs

Hospital Association of South Africa

South Africans are often too introspective and forget to examine how the rest of the world has implemented widely-differing models of universal healthcare, Barry Childs, a nationally-respected healthcare actuary says.

Contrary to popular local belief, a global map of the percentage of the population covered by universal healthcare shows South Africa to be in the high ninety percent, comparing favorably to most of the developed world. The only other country that shines equally in Sub-Saharan Africa is Ghana, he revealed at the recent HASA 2019 Conference.

Spending on healthcare in South Africa was at 8,5 percent of GDP – comparable to many South America countries, north America, Europe and Australia. From a universal healthcare point of view when South Africa was compared to other countries in terms of catastrophic out -of-pocket expenses, it actually performed very well, at a range of between 0 and 10 percent, the second lowest in Sub Saharan Africa.

Structurally-speaking, our system was set up to provide universal healthcare, using a means-based test for out of pocket payments while medical schemes provided for those who were did not have to rely on the public sector. However, this had not worked out from a resource and equity point of view. The private sector was expensive while the public sector was “not what it should be.”.

“Our problem is not so much structural, but much more about effectiveness of coverage and access to healthcare and the lack of equity in the system,” Childs emphasized.

According to data when comparing universal health care systems, divided into broad income groups of high, upper middle, lower middle and low income, South Africa lay in the upper-middle-income bracket, globally.

Ghana an NHI African leader

Childs said Ghana was a fascinating case study when it came to universal healthcare because it had embraced healthcare reforms and was the first in Africa to get acclaim for an NHI scheme. With a $68 health expenditure per capita and healthcare spend at 4,4% of GDP, it had performed extraordinarily well, even though for many years the NHI ran at a deficit because of poor administration, poor registration of providers, payments and patients. “They underestimated the cost of services and should have been more thorough,” he said. Ghana had then scaled back on services between primary and tertiary healthcare and focused fully on primary healthcare, incrementally adding service benefits over time.

With South Africa healthcare spending at 8,5% of GDP and healthcare expenditure at $428 per capita, there was nevertheless a four to five-fold difference in expenditure between the public and private sectors.

“We have great low out-of-pocket payments for the private sector. The other reality is that more than half of South Africans live in households earning less than R4 000 per month, so the National Department of Health (through the NHI) speaks for the entire population,” he said.

A high-level observation from a global country health systems review revealed that mandatory participation was a prerequisite. Although many people said the government could not force them to join an NHI, they forgot that a decade ago the government wanted to force them to join a medical scheme, if they earned enough.

“So mandatory participation is important,” he stressed, adding that equity, efficiency, access and sustainability were challenges everywhere, “except perhaps for the Scandinavian countries, they’re all trying to fix what’s going on – all are critically introspective about their health systems,” he added.

Asked whether he would buy South African healthcare stocks, Childs replied “absolutely – I think the markets overreacted massively (to the NHI). There was a huge amount of noise. Every model I’ve shown you here talks about contracting into the private sector to the extent that the NHI becomes a single fund to achieve State objectives. Full implementation is a long way off. That could lead to some de-regulation in the private markets and create more profits for private healthcare operators,” he added.