NATIONAL HEALTH INSURANCE AND THE WORKPLACE

2525thth Annual Labour Law Conference Annual Labour Law ConferenceSandtonSandton

JohannesburgJohannesburg

2525thth Annual Labour Law Conference Annual Labour Law ConferenceSandtonSandton

JohannesburgJohannesburg

Outline

• Baseline: Health System Challenges • Green Paper on National Health Insurance• Piloting NHI • Possible implications for the workplace

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KEY CHALLENGES IN THE HEALTH SYSTEM

• Quadruple Burden of Disease• Quality of Healthcare• Distribution of Financial and Human Resource• High Costs of Health Care

– Out-of-pocket payments and co-payments

Baseline

• Poor health outcomes and poor overall performance – IMR, MMR, Life Expectancy, worsening BOD (Quadruple)

• Fragmented funding pools– Rich, healthier = funded separately – Poor, more susceptible to illness = reliant on State

• Huge exposure to health-related catastrophic expenditures• Hospicentrism and growing commercialism

• Inequitable access to key health resources 4

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OVERALL, SOUTH AFRICA GETTING POOR PERFORMANCE RELATIVE TO COST

Israel

UAE

Saudi ArabiaOman

Bahrain

Qatar

Kuwait

South Africa

Algeria

KenyaMorocco

Namibia

Belgium

Czech Republic

France

Germany

Hungary

Ireland

Italy

Netherlands

Poland

Russia

Slovakia

Spain

Sweden

Switzerland

Turkey

UK

Australia

New Zealand

Hong Kong

Taiwan

Philippines

Singapore

Malaysia

South Korea

China

India

Brazil

Argentina

Chile

Uruguay

Colombia

México

Peru

Venezuela

USCanada

Middle EastAfricaEuropeAsia PacificLatin AmericaUS & Canada

Performance vs. Cost Comparison, 2008Performance vs. Cost Comparison, 2008

Note: Trend line is a polynomialSource: Discovery Health Pool Stream Database, Monitor Analysis

Countries sitting above the trend line are producing relatively better performance for the cost per capita inputs that they are investing

Performance

HighLowLow

High

Cost (Spend per capita /Int.$)

R2=0.5367

Indicator Brazil Russian Federation

India China South Africa

Total population (millions) 193.7 140.8 1198 0 1353 3 50.1

Total expenditure per capita (PPP int $)

943 1,038 132 309 862

Total expenditure on as % of GDP

9.0 5.4 4.2 4.6 8.5

General government expenditure on health as % of total government expenditure

6.1 8.5 4.1 10.3 9.3

Life expectancy at BirthMalesFemalesBoth

707773

627468

636665

727674

545554

Selected Health Statistics, BRICS Countries

Indicator Brazil Russian Federation

India China South Africa

Infant mortality rate (per 1,000 live births)

17 11 50 17 43

Under 5 mortality 21 12 66 19 62Adult mortality rates, 15-59 years (per 1,00 population)MaleFemaleBoth

205102154

391144269

250169212

14287

116

521479496

Maternal Mortality Ration (per 100,00 live births)

58 39 230 38 410

Distribution of years of life lost by causes (%)CommunicableNon CommunicableInjuries

205624

116425

523513

156519

79156

Prevalence of HIV among adults aged 15-49 (%)

0.6 1.0 0.3 0.1 17.8

Prevalence of TB (per 100,000 population)

50 132 249 138 808

Tobacco smoking 15+ (%)MalesFemales

19.412.0

70.127.7

33.23.8

59.53.7

29.59.4

LIST OF GINI-COEFFIECIENTS FOR DIFFERENCT COUNTRIES, LATEST WORLD BANK DATABASE

2000 to 2009

South Africa South Africa (2006) 67 2006

Seychelles Seychelles (2007) 66 2007

Comoros Islands Comoros (2004) 64 2004

Micronesia, Fed. Sts. Micronesia, Fed. Sts. (2000) 61 2000

Haiti Haiti (2001) 60 2001

Angola Angola (2000) 59 2000

Honduras Honduras (2007) 58 2007

Colombia Colombia (2006) 58 2006

Bolivia Bolivia (2007) 57 2007

Central African Republic Central African Republic (2008) 56 2008

Guatemala Guatemala (2006) 54 2006

Brazil Brazil (2009) 54 2009

Rwanda Rwanda (2005) 53 2005

Lesotho Lesotho (2003) 53 2003

Nicaragua Nicaragua (2005) 52 2005

Mexico Mexico (2008) 52 2008

Chile Chile (2009) 52 2009

Panama Panama (2009) 52 2009

QUALITY IN PUBLIC HEALTH FACILITIES

• Cleanliness • Safety and security of staff and patients • Long waiting times • Staff attitudes • Infection control • Drug stock-outs

0123456789

1011121314151617

1997 1998 1999 2000 2001 2002 2003 2004 2005

Billions

Year

Ran

ds

General Practitioners Medical SpecialistsDentists Dental SpecialistsProvincial Hospitals Private HospitalsMedicines Supplementary and Allied Health ProfessionalsEx-Gratia Payments Other BenefitsCapitated Primary Care

Trends in Total Benefits Paid, 1997 - 2005

Source: Council for Medical Schemes

Sustainability of Medical Scheme Industry

• A number of medical schemes have collapsed, been placed under curatorship or merged

• Registered schemes have reduced from over 140 in the year 2001 to under 100 in 2010

• To sustain their financial viability, schemes tend to increase premiums at rates higher than CPIX– Declining depth & breadth of benefits

• Industry has registered deficits two years consecutively

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There are no simple solutions to the systemic challenges...

1. Sit back, relax and watch as system and outcomes worsen

OROR2. Recognise that we cannot wish our

problems away so we must get up, roll-up our sleeves and take action now

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CONSTITUTIONAL OBLIGATION:THE BILL OF RIGHTS

Section 27. Health care, food, water and social security Section 27. Health care, food, water and social security 1. Everyone has the right to have access to

a. health care services, including reproductive health care; b. sufficient food and water; and c. social security, including, if they are unable to support

themselves and their dependants, appropriate social assistance.

2. The State must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of each of these rights.

3. No one may be refused emergency medical treatment.

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Principles

– The Right to Access Health– Social Solidarity– Equity– Effectiveness– Efficiency– Appropriateness– Affordability

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THE EVOLUTION OF HEALTH CARE FINANCING IN SOUTH AFRICA

• Commission on Old Age Pension and National Insurance (1928)

• Committee of Enquiry into National Health Insurance (1935)

• National Health Service Commission (1942 – 1944)

• Health Care Finance Committee (1994)

• Committee of Inquiry on National Health Insurance (1995)

• The Social Health Insurance Working Group (1997)

• Committee of Inquiry into a Comprehensive Social Security for South Africa (2002)

• Ministerial Task Team on Social Health Insurance (2002)

• Advisory Committee on National Health Insurance (2009)

Population Coverage

• All South Africans and legal permanent residents will be covered

– Short-term residents, foreign students and tourists required to obtain compulsory travel insurance

• Legally required to produce evidence of this upon entry into South Africa

– Refugees and asylum seekers will be covered in line with provisions of the Refugees Act, 1998 and International Human Rights Instruments ratified by the State

• NB: DHA amending this so may be reviewed further 16

Healthcare Benefits under NHI (Illustrative)

• Primary health care services: – Prevention, – Promotion, – Curative, – Community outreach and community-based services as well as

school-based services• Inpatient and outpatient hospital care (including specialist and

rehabilitation services)• Prescription drugs• Emergency care• Mental health services • Oral health services • Basic vision care and vision correction• Appropriate technologies for diagnosis and treatment including

assistive devices17

Health System Re-engineering

• Shift emphasis from high cost, curative service delivery/provision to health promotion and prevention (incl. community outreach)

• Primary health care services shall be delivered according to the following three streams: 1. District-based clinical specialist support teams supporting

delivery of priority health care programmes at the district level

2. School-based Primary Health Care services 3. Municipal Ward-based Primary Health Care Agents

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Accreditation of Providers

• All facilities/establishments to be accredited according to the same set of standards and norms

• Draft Bill on Office of Health Standards Compliance (OHSC) tabled in Parliament

• An independent OHSC to be established with 3 main units:– InspectionInspection– Ombudsperson, Ombudsperson, – Certification of health facilitiesCertification of health facilities

• Developmental and multidisciplinary approach using evidence-

based principles for standard development to evaluate compliance and to monitor progress

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Principal Funding Mechanisms

• Combination of sources: – General tax allocations – Employers – Individuals

• Revenue base to be as broad as possible: – To achieve the lowest contribution rates – Generate sufficient funds to supplement the

general tax allocation to NHI

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The Role of Medical Schemes

• Medical Schemes will continue to exist within the NHI environment

• May provide top-up cover• No one will be allowed to opt-out of NHI

– Mandatory contributions >>> payroll- or income linked

• Technical capacity exists within the sector to help with roll-out – What, how and when....

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The Ten Point PlanThe Ten Point Plan

1. Provision of strategic leadership and creation of a social compact for better health outcomes

2. Implementation of a National Health Insurance Plan3. Improving Quality of Services4. Overhauling the health care system and improve its management5. Improving Human Resources Management6. Revitalization of physical infrastructure7. Accelerated implementation of HIV and AIDS Plan and reduction of

mortality due to TB and other communicable diseases8. Mass mobilization for better health for the population9. Review of the Drug Policy10. Strengthening Research and Development

Health System Performance

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Piloting of NHI Started in 2012 April

• Policy position: Phased-in over a period of 14 years• First steps towards implementation through

piloting • 10 health districts selected for piloting • Selection of the 10 districts based on the following

factors:• Health profiles, demographics • Health delivery performance• Management of health institutions • Income levels and social determinants of health • Compliance with quality standards

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Selected Pilot Districts and Respective Population NumbersProvince District Total Population based on STATSA

2010 Population Estimates

Eastern CapeOR Tambo 1,353,349

MpumalangaGert Sibande 944,694

LimpopoVhembe 1,302,107

Northern CapePixley ka Seme 192,157

Kwa-Zulu NataluMzinyathi 514,840

Kwa-Zulu NataluMgungundlovu 1,066,150

Western CapeEden 558,946

North WestDr K Kaunda 807,752

Free StateThabo Mofutsanyane 832,172

GautengTshwane 2,697,423

TOTAL POPULATION10,269,590

25Notes: *KZN will pilot two (2) districts due to high population numbers and high disease burden

The First 5 Years

• Focus on strengthening the health system in the following areas:

• Management of health facilities and health districts• Quality improvement• PHC re-engineering incl. roll-out of PHC streams • Infrastructure development• Medical devices including equipment• Human Resources planning, development and

management• Information management and systems support• Establishment of the National Health Insurance Fund

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IMPACT OF NHI ON THE WORKPLACE

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Background

• The 2006 LIMS study attempted to gain insights into health in the workplace:– 40 companies surveyed, 8 have all employees covered and

the rest have variable cover. – 90% of companies offer medical schemes subsidy between

50%-66%, dependents included max 4.– Employees should pay 10-15% of salary as premium with

max of R200/month/employee• Strong support for low income members to have cover given

the benefits: better employee health, leading to increased productivity, reduced absenteeism and reduced requests for loans.

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Bargaining Council Schemes

• Established under the Labour Relations Act (Act 66 of 1995)

• 27 Bargaining Councils • 800,000 employees and about 50,000

employers • Approach is PHC based with panel doctors

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Occupational Health Facilities • extensive legislation governing occupational health

issues in the workplace • staff-based model or directly-contracted model• Contracted providers usually employed on a part-

time consultancy • Workplace-based occupational health services may

be engaged in the promotion and maintenance of employee health, maintenance of workforce efficiency, fulfilment of legal compliance with regulations.

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Mine Health and Safety Act

• Mine - hospital or clinics and nurses, doctors and other health professionals are employed by mine

• In 1997 there were 66 mine hospitals with a total of 6,088 beds - more economical than contracting or insurance

• Significant decline in the number of hospitals over the next 10 years - decline in the gold price, development of more efficient mining techniques, and the fact that many gold reserves are becoming depleted has led to drastic reductions in employed miners.

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Provision of HIV/AIDS Treatment • The mines have lead the widespread provision of

testing and treatment for HIV/AIDS, other have since followed

• South African Business Coalition on HIV & AIDS

• The mining, metals processing, agribusiness and transport sectors are most affected by the pandemic, with more than 23% of employees infected with HIV/AIDS and with prevalence rates two to three times higher among skilled and unskilled workers than among supervisors and managers.

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Possible implications under NHI

• Benefits that were available through bargaining councils will be replaced by the universal healthcare package. Tax based financing as opposed to current out of pocket payments on a voluntary basis.

• Financing of workplace programmes from the fund will reduce the burden on companies since these activities will be eligible for funding through the NHI. Improved efficiency through central purchasing and monitoring

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Possible implications under NHI (2)

• Provision of ARVs, monitoring and care of HIV patients will be funded centrally. Reduced burden on the employer and greater efficiency through central purchasing.

• Consolidation of healthcare funding for workplace injuries such as CCOD. Central fund that will pay for all healthcare service. Patients can access care at any NHI provider as opposed to the current system.

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FAIRNESS“Fairness, I believe, is at the heart of our ambitions in global health. A quest for greater fairness dominates the

agenda for this forum.

We see this in your concern about vulnerable populations, and about health systems that exclude the poor. We see this in your support for global health initiatives and funding mechanisms that redistribute some of the world’s riches towards health needs of the poor.

On the issue of fairness, let me again state the obvious. Our world is dangerously out of balance, also in matters of health. Differences, within and between countries, in income levels, opportunities and health status are greater today than at any time in recent history.

Part of the world feasts itself into obesity, while part of the world fasts and starves for want of food. Part of the world thrives into old age, while part of the world dies young from easily and cheaply preventable causes.

As the historians tell us, such huge extremes of privilege and misery are a precursor for social breakdown.

Is this where the progress of our civilized, advanced, high-tech, sophisticated society has brought us? To the brink of social breakdown?

Let me make another obvious point. A health system is a social institution. It does not just deliver pills and babies the way a post office delivers letters. Properly managed and financed, a health system that strives for universal coverage contributes to social cohesion and stability.

I further believe that a failure to make fairness an explicit objective, in policies, in the systems that govern the way nations and their populations interact, is one reason why the world is in such a great big mess.”

Dr Margaret Chan;Director-General of the World Health OrganizationAddress at the United Nations Secretary-General’s Forum on Advancing Global Health in the Face of Crisis, 15 June 2009

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Thank You

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