NHI BILL - SAMA · PRESENTATION OF THE NATIONAL HEALTH INSURANCE FUND BILL. Dr Anban Pillay. SAMA CONFERENCE. Sun City. 19. th. August 2018. WHAT IS NHI? • NHI is a health financing

NHI BILL

Dr Selaelo MametjaHead of Knowledge Management and Research Department

SAMA

Background: Historical Phases of Healthcare Financing dialogue in SA

Policy Context:• The Reconstruction and Development Programme (RDP)• Constitutional mandate (Section 27)• 1997 White Paper for the Transformation of the Health System• Medical Schemes Act of 1998: Community rating, prescribed minimum

benefits• SAMA supports Universal Coverage and access to good quality medical

care

Key issues

• Quality of care

• Equitable access to health care, Health risks and financial protection

• Improved efficiencies

• Role of Voluntary Medical schemes clearly defined

• Governance and regulatory independence

NHI Policy Phases in SA

GREEN PAPER(2011) WHITE

PAPER(2015)

NHI POLICY(2017)

NHI BILL

(2018)SAMA written

submissionSAMA

written submission

SAMA written

submission

NHI Bill, 2018

• Released concurrently with Medical Schemes Amendment Bill• Both Bills have 3 months comment period (21 June -21 Sept)• Followed by HMI draft report comments due 08 September• A lot of the implementation detail will be in the Regulations

BUT o Referral Guidelineso Guidelines on Formularieso Tender for Universities (Test) and o Clinical Service Provider (Oncology, school health, psychiatry, maternal

health• SAMA busy with member consultations towards a Submission

NHI Bill, 2018

FOOD FOR THOUGHT: “The hallmark of (any) Legislation is Functionality Not Perfection”- Lawyer

NHI Bill Consists of 9 Parts, comprised of 55 Sections

Definitions

Definitions are based on existing legislation but serious discordance in definitions or relevant sections Missing definitions E.G.

i. Quality : Remains measure of Health systems accountability. The ambiguity becomes stark in the phrase “reasonable quality” (Section 6.1.h) and “sufficient quality”: Quality was defined in White paper.

ii. Complementary coverageiii. Mandatory pre-payment: who is going to payiv. Active purchasing/ strategic purchasing

Objective of the Fund

• establishing and maintaining an efficient Fund through the consolidation of revenue so as to protect users against financial risk;

• serving as the single public purchaser of health services in terms of this Act > the equitable and fair distribution and use of health care services;

• ensuring the sustainability of funding for health care services; and• providing for equity and efficiency in funding by actively purchasing health care

services, medicines, health goods and health related products from certified, accredited and contracted service providers.

The objective is not to improve quality of care despite recognition that Quality is important

Types of Quality of Care Measures

Donabedian proposed for quality of care assessment

• Structure : Through OHSC norms and standards

• Processes of care: necessary for quality improvement

• outcomes of care: Outcomes are as a result of entire health system,

cannot blame clinicians only

Sec 2- Application of the Act

“Act applies to Both Public and Private health establishments (except military health establishments)”

~ However, size of the private sector stake in NHI remains unclear (details in Regulations?)

PART 1: Sec 3-6 The NHI Fund & functions

FUNCTIONS AND DUTIES• National public entity in terms of PFMA• Accountable to the Minister???? • mandatory prepayment• Single public purchaser • Enters into Contracts with certified & accredited parties,• Determines Prices annually: Problematic as the fund cannot play role of buyer and

determine prices• Design health services-Committee of the Board• Pays providers in accordance to quality & value of services• Develops & maintains a Service & Performance Profile for each contracted provider, supplier

etc• Providers etc will be contracted with the proviso of servicing “at lowest possible price”

PART 2: Sec 7-12 Rights to HealthCare

Eligible users have rights to:• Comprehensive Health package object to affordability and means• Citizens, permanent residence, dependants, inmates• Refugees: ONLY emergencies, notifiable conditions and MCH at

PHC• Free at point of care, standard of care at reasonable time• Information (His /hers ; or info about by the Fund)• Not to be refused care ‘on unreasonable grounds’• To be transferred to a more equipped provider at no cost• Complain and appeal against decisions of funds- more on complains

process

Role of Medical Schemes

SUPPLEMENTARY COVERAGE: private insurance complements coverage provided BY NHI and covers a limited set of interventions that address the particular gaps in a country’s public coverage

COMPLEMENTARY: provide coverage that is not covered by NHI N can be used for co-payments or to cover areas of care such as oral and eye care

SUBSTITUTIVE: provides coverage that will otherwise be available in state: provided to those who cannot be covered by NHI

Role of Medical Schemes

NHI BILL“Users have rights to purchase complementary services not covered by schemes through voluntary medical insurance, out of pocket and private health insurance”

NHI WHITE PAPER“the role of medical schemes in the health system will change and once NHI is fully implemented, medical

schemes will offer complementary cover to fill gaps in the service coverage offered by the NHI.”

NHI GREEN PAPERAs part of the transition process, medical schemes will play a supplementary role. Once NHI is fully implemented,

medical schemes will offer complementary cover to fill gaps in the universal entitlements offered by the State

PART 2: Sec 7-12 Rights to HealthCare cont..

NHI Fund will NOT fund services in these instances:

Medically unnecessary

Cost-ineffective interventions

Bypassing referral system,

But how about vulnerable populations: Perpetuate inequities

PART 3 & 4 :Sec 13- 24 Board of Fund

Board is purportedly “Independent”; accountable (expected to justify actions) to

Parliament

Max term of office is 5 years renewable only once

Board consists of no more than 10 persons with expertise in areas ‘including/care financing; health economics; public health planning; M& E; Law; Labour; Actuarial science; IT & Communication

“Freedom to make decisions” Cambridge Dictionary

PART 3 & 4 :Sec 13- 24 Board of Fund

Appointment of the Board Call 4 public nominations : Minister Adhoc committee appointed by Cabinet MUST

Conduct public interviews Forward recommendations to Minister for approval

The Minister MUST notify Parliament of the final appointment Minister can dissolve the Board after consulting with Cabinet> No

input from Parli The Board will advice the Minister The Minister will also approve the CEO appointed by Board CEO report to the Board and Parliament on annual basis

1. National Assembly 300-400 members2. National Council of Provinces

• President• Deputy president• Ministers

• Constitutional Court• Supreme Court• High Court• Magistrate Court

Structure and functioning of SA government: NATIONAL LEVEL

Parliament

Legislative Authority Judiciary AuthorityExecutive Authority

ParliamentCabinet

PART 3 & 4 : Sec 13- 24 Board of the Fund

Sec 22.3: CEO must establish the following Units within the Fund:

a) Planningb) Benefits designc) Price determination> Separate bodyd) Accreditatione) Purchasing & Contractingf) Service provider paymentg) Procurementh) Performance monitoring i) Risk and fraud prevention Investigationj) Investigating

PART 3 & 4 : Sec 13- 24 Board of Fund

Distressed COLLAPSING

keepthe Minister informed of the quality of

the health services

PART 5: Sec 25- 31 Ministerial Committees(1)

Mandate1. Health service benefits2. Level of care at which services will be reimbursed3. detailed and cost effective treatment guidelines

Sec 25: Benefits Advisory Committee

Appointed for 5 years, renewable onceComposition:a)All heads of medical schoolsb)WHO delegatec)9 nominees from Provincial Health Departmentsd)1 nominee by the CMSe)1 nominees by HASA or similar private body

PART 5: Sec 25- 31 Ministerial Committees (3)

Mandate: to recommend prices of health service benefits to the Fund

Sec 26:Health Benefits Pricing CommitteeComposition: (16-24 members)a)Health DGb)1 person at the level of Deputy DG from National Treasuryc)Not more than 11 members appointed on basis of their special knowledge & experience in:o Clinical & service deliveryo Operational health mx establishment & service deliveryo Actuarial and health benefit design or pricing strategyo Health economicso Labour relations

PART 5: Sec 25- 31 Ministerial Committees (4)

Mandatea) Advice to Board and Minister on the functioning of the Fund b) Comments & advice from a community perspectivec) Comments & advice from a provider perspective

Sec 27: Stakeholder Advisory Committee Composition:

a) One member from each Statutory Councils: HPCSA, SAPC, SANC, Allied Health professions Council, Traditional Health Practitioners Council, SA Dental Technicians Council

b) Other Regulatory bodies: MRC, CMS, c) NGOs, organised labour AND Businessd) Tertiary institution (2)

PART 6: Sec 32- 39 General Provisions

DefinitionsGovernance: rule; controlStewardship the job of supervising or taking care of something

Sec 32: Role of Minister

The Minister is responsible for the:“governance & stewardship of the national health system”“governance & stewardship of the Fund”


Sec 38: Accreditation of service providers

Conditions for contracting:Certification with OHSC and Professional Regulator eg HPCSAAdherence to treatment protocols and National pricing regimenAdherence to referral pathwaysSubmission of info to National Health Info databaseFund has rights to deregister the provider if above not met

Will the same conditions fro contracting apply to public sector?


Sec 34: National Health Information Repository & Data System NHA 74 (NHIS)

• Providers must submit info for the Health Payment Registration System: procedure codes, medicines, LOS, diagnostics, referrals

• The Fund may use submitted information to:• Monitoring & Evaluating outcomes,• Plan and budget , • Monitor performance of providers, • Monitor compliance with guidelines

• Providers etc. must comply with the law i.r.o access & protection of health records:


Sec 35: Purchasing of health care servicesNHI Fund must active and strategic purchasing from public and private on behalf of users: Directly to Hospitals or CUP1. National Level: based on Diagnostic Related Groups as determined by Minister in

consultation with Nat Health Council and Board: contract All hospitals excluding District, all inclusive performance based.

2. Provincial Level: based on Global Budget or DRGs as determined: All inclusive/performance based. Provincial, District?, regional, specialised hospitals

3. At sub District Level: Funds for PHC will be transferred to Contracting Unit for PHC (CUP). Capitation based

4. Emergency services: Capped fee based basis, with adjustment for severity where necessary


Sec 39: Payment of service providers

The Fund , in consultation with the Minister, must determine the nature of service provider payment mechanismsI. Specialist & Hosp services→ “all-inclusive ”, Performance based

paymentII. Primary care Establishments→ Risk adjusted capitation for

population size and services BUT not epidemiologyIII. Certified & accredited Primary care Providers must be remunerated

by the CUP


Sec 37: Contracting Unit for PHC (CUP):

“The CUP is the organisational unit with which the Fund contracts for the provision of PHC services within a specified geographical sub-district area…”• CUP is composed of: a District hospital, Clinics, and/or CHCs and WBOTs,

Private primary providers organised in horizontal networks• Assists the Fund on its function incl identifying service needs; identifying

accredited providers & issuing certificates, etc.

Appeal tribunal has ssame powers as high court

Users have right to complain

CEO’s office Investigating unit

Office should respond in 30 days

Decision in writing

Lodge appeal in 60 days to the Ministerial appointed tribunal

Appeals process

the job of supervising or taking care of something

Appeal tribunal Appointed by Minister

THE SOUTH AFRICAN MEDICAL ASSOCIATION

Tel: +27 (0)12 481 2000 | Fax: +27 (0)12 481 2100Block F | Castle Walk Office Park | Nossob Street | Erasmuskloof | Ext 3 | Pretoria | 0183

PO Box 74789 | Lynnwood Ridge | 0040Reg No 1927/000136/08: NPC

www.samedical.org

PRESENTATION OF THE NATIONAL HEALTH INSURANCE FUND BILL

Dr Anban PillaySAMA CONFERENCE

Sun City

19th August 2018

WHAT IS NHI?

• NHI is a health financing system that pools funds to provideaccess to quality health services for all South Africans based ontheir health needs and irrespective of their socio-economic status.NHI is intended to ensure that the use of health services does notresult in financial hardships for individuals and their families.

• NHI represents a substantial policy shift that will necessitate amassive reorganisation of the current health system, both publicand private and also derives its mandate from the NationalDevelopment Plan (NDP) of the country.

2

UN Sustainable Development Goals (SDGs)

• Goal 3.8“Achieve Universal Health Coverage, including financial risk protection, access to quality essential health-care services, and access to safe, effective, quality and affordable essential medicines, and vaccines for all”.

3

South Africa is an outlier: world’s largest share of spending from VHI

Source: WHO estimates for 2012, countries with population > 600,0004

The Country’s Plan - The NDP

Chapter 10: Promoting Health - Targets for 2030, • Under Universal Health Coverage:

– Everyone has access to an equal standard of care regardless of their income;

– A common fund enables equitable access regardless of what people can afford to pay or how frequently they need to make use of health services

5

THE WHITE PAPER ON NHI

6

FEATURES OF NHI

• Universal access• Mandatory prepayment of health care• Comprehensive Services• Financial risk protection• Single fund• Strategic purchaser• Single-payer

722/08/2018

Health care

COVERED PO

PULATIO

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p of

fina

ncin

g an

d pr

ovisi

on

(gov

erna

nce,

regu

latio

n, in

form

atio

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Collection of funds

Provision of services

Purchasing of services

Pooling of funds

Allocation mechanisms

Allocation mechanisms (provider payment)

Allocation mechanisms

Social solidarity and cross-subsidisation

Economies of scale and efficiencies

Single Pool for Income and Risk

Single Payor / purchaser

Prepayment Taxes/ Contributions

8 8

The NHI Bill• This cannot be achieved without creating a single common

fund, which in itself will directly contribute towards:– a unified health system by improving equity in financing, – reducing fragmentation in funding pools across both the

public and private sectors, and – making health care delivery more affordable and

accessible for the population

• The NHI Bill is a crucial step in creating the common Fund.

9

Parts of the NHI Bill

10

Establishment of the NHI Fund

Right to health care

The Board of the Fund

The CEO Ministerial Committees

General provisions applicable to

operation of Fund

Complaints and appeals Financial matters Miscellaneous

Key Features of the Bill

Beneficiaries Covered(Section 7)

Mandatory Pre-payment

(Section 3(4))

No co-payments, free at point of service (Section

9 (a))

Registration of users (Section 8)

Public and Private Providers (Section

5(1)(d))

Strategic Purchasing (no more tenders for health services) (Section 35(1)

Fighting Corruption (Section 6 (1) (I)(vi),

Section 6(1)(L))

Rights of users (Section 9 (a))

Purchaser-Provider Split (Section 35(1))

Single Purchaser (Payer)(Section 3(3))

Comprehensive Health Service Benefits

(Section 11 (1) & 11 (2))

Affordability (Section 9)

11

Key Features of the Bill (contd.)

12

Entry point to health care system – PHC

(clinics, GPs and other PHC providers)

(Section 11(2)(a))

Referral Pathways Section 11 (2)(b)

When are Services not covered

Section 12 (2)

Method of Payment –capitation, DRGs, Global

fees (Section 35 (2), (3), (5)

Procurement through Chief Procurement Officer

(National Treasury)

Sources of Funding -Minister of Health and

Finance to jointly determine (Section 46 (1),

(2), (3))

Ministerial Committees (Section 25, 26, 27, 28)

Appeals and Complaints (Section 40)

Schedule of Amendments (Annexure)

NHI Committee• Benefits Advisory Committee

• Health Benefits Pricing Committee

• Stakeholder Advisory Committee

• Technical committees

13

Transitional Arrangements• Described in section 54 of the bill.• Specifies the structures, and process of implementation• Phase 1 was from 2012 to 2017.• Phase 2 will be for a period of five years from 2017 to 2022 and will—i. continue with the implementation health system strengthening initiatives,

including the alignment of human resources with that which will be required under the Fund;

ii. include the development of National Health Insurance legislation and amendments to other legislation;

iii. include the undertaking of Initiatives which are aimed at establishing institutions that will be the foundation for a fully functional Fund; and

iv. will include the interim purchasing of personal healthcare services for vulnerable groups such as children, women, people with mental health disorders, people with disability and the elderly.

14

Transitional ArrangementsPhase 3 will be for a period of four years from 2022 to 2026 and will include—i. the continuation of Health systems

strengthening activities on an ongoing basis;ii. the mobilisation of additional resources as

approved by Cabinet; andiii. the selective contracting of healthcare services

from private providers.

15

Consolidation of Financing Streams

• Presently, according to STATSSA, this is how the SA population is divided in termsof income, employment and hence, indirectly medical scheme coverage

• In reorganising the population, cognisance will be taken of these variouscategories, i.e. when we implement NHI, we have to start with those who are notcovered

Interim Insitutional Structure

Civil servants and their dependants

(incl. SoEs)

5.5m

Formal Sector Employed and their dependants (large

business)

12m

Formal Sector Employed and their dependants (SMMEs)

6m

Informal sector and their dependants

8m

Individuals in householdswith no income or are not

employed

24m

• Government Employees• State Owned Enterprises • Public Entities

• Domestic Workers• Hawkers• Taxi industry• Casual labourers

• The elderly with no income

• Children • School kids (12m)• Unemployed• Unemployable

Only 8.8m of these people have accessto health services via medical schemes

The central philosophy of Implementation ofNHI is to bring into fold those people who arenot insured (specifically those who are unableto afford medical scheme cover).16

THANK YOU

17

NHI and Scheme Regulation

Dr Sipho KabaneNHI and Scheme Regulation

SAMA Conference

NHI POLICY REFORMS (1998-2018)

Green Paper: National Health Insurance:

Healthcare for all South Africans

White Paper: National Health Insurance:

towards Universal Health Coverage

National Health Insurance Policy : towards Universal Health

Coverage

NHI Implementation: Institutions, bodies & commissions

Towards Universal Health Coverage

Social solidarity, Efficiency, equity,

effectiveness, Health care as a Public Good,

affordability and appropriateness

Nominations: NHI Ministerial & National Advisory Committee Members

Medical Schemes

Amendment

Bill

Medical Schemes Act Regulations

Medical Schemes Act promulgation

NHI Bill

Phase 1: NHI (2012-2017)• Improving the management of health facilities; • Improving throughput from training institutions to address key Human resources for

Health requirements; • Strengthening infrastructure programme and procurement of equipment; • Implementing improved and integrated health information systems and technology;• Rationalising of laboratory services; • Effective and integrated procurement of Health Commodities; • The implementation of and compliance with National Quality Standards for Health; • Re-engineering of Primary Health Care; • The contracting of health practitioners to strategically enhance the quality of Primary

Health Care; • Restructuring and improving the provision of Occupational Health, Mental Health,

Disability and Emergency Medical Services as part of the comprehensive health entitlements that will be covered by the NHI Fund.

Phase 2:NHI (2018-2022)

NHI Transitional Structures

• Ministerial Advisory Committee on Health Care Benefits for National Health Insurance

• National Health Service Pricing Advisory Committee

• National Advisory Committee on Consolidation of Financing Arrangements

• Ministerial Advisory Committee on Health Technology Assessment for National Health Insurance

Health System Reform Forum

HEALTH SYSTEMS REFORM FORUM

CMS: NHI related Strategic Projects

• Standardization of Options• Consolidation of schemes <6000 membership• Consolidation of government funded schemes• Risk based Capital Solvency Framework• Elimination of Co-payments and Balanced Billing• Beneficiary Registry• Service Benefit Review• Low income benefit option framework

Contracting for Vulnerable Groups

• Maternal Health (Pre, Peri and Post Natal)

• Child Health (School Health Services: Vision, Hearing and Oral Health)

• Elderly (Cataracts, Hip & Knee replacements)

• Mental Health Users

Medical Schemes Act Bill

Contents

• Background and Context• Ministerial Policy Statements• Comments on Policy Statements• Key Features of the Bill• Areas requiring strengthening• Conclusion

Pronouncements: MSA Bill• Abolish Co-payments (Complaints; 25% solvency to be reviewed)• Abolish usage of Brokers• Shift from PMB’s to Comprehensive Service Benefit• Standardization of Scheme Options• Declare entities conducting a business of a MS without registration illegal• Central Beneficiary and Service provider registry• Introduce income subsidization model• Pass discounts back to members in DSP’s• Membership Terminations and waiting periods• Board of Trustee and PO requirements

Background and Context

• CMS was a key contributor to the Bill• CMS will like all stakeholders comment on the Bill • CMS will maintain a keen interest in the process up to promulgation• CMS will be the key implementer of the new Act and Regulations• Medical schemes industry will be regulated based on the provisions

of the Act and Regulations• Mandate of CMS based on the MSA as amended and Regulations• CMS will continue playing this role for as long as the Act and

Regulations are in force

Background and Context

• MSA Bill needs to be read with the NHI Bill and the HMI provisional recommendations

• NHI policy document and NHI Implementation structures released in June 2017 also important for context

• Comment period on the Bill still open• Industry players should add their inputs into the process

Ministerial Policy Statements• Elimination of Co-Payments Review of 25% solvency requirement• Elimination of Broker Services• Replacement of PMB’s with Comprehensive Service Benefit• ALL benefit options to be approved by Registrar• Outlawing Fake Schemes• Central Beneficiary Registry and Service provider registry• Income Distribution Model• Discounts and Savings passed on to members• Cancellation of Scheme membership• Improved Governance of Schemes

Comments on Policy Statements

Co-payments:• Complaints by members• ↓ Out of pocket expenditure• Estimated at R29bn (does not include claims not tendered)• All schemes have about R59bn of reserves (Average of 33% vs 25%

solvency)• Balance solvency requirements against impoverisation due to OOP

expenses• CMS to move towards a Risk Based Capital Solvency Framework


Elimination of Broker Services:• Membership to schemes stagnant (8.8m)• Schemes are reducing in numbers• Broker numbers are not decreasing• Members collectively paid R2.2bn to brokers• Members have never known their brokers• What were the value added services• Members should only pay for services rendered


• CMS supports these statements by and large as these are aimed at member protection

• CMS understands the reasoning behind these pronouncements• CMS sees these statements as providing direction and policy intentions• CMS takes these pronouncements very seriously• CMS sees some of these as immediately implementable and some in

the medium to long term• CMS will unpack and bring these up for consultation with key industry

stakeholders• Those that can be implemented through the legislative process will be

brought into the current engagements• Those that do not require a legislative will be appropriately handled

with the key industry players

Key Features of the Amendment Bill

• To exclude the application of the Consumer Protection Act, 2008; • Creation of a Central Beneficiary Register;• To empower the Registrar to amend the rules of a medical scheme

that has failed to amend its rules in accordance with a directive;• To re-determine the provisions relating to the admission of

beneficiaries to a medical scheme and the cancellation of membership

• To set out various requirements applicable in determining the contributions payable to a medical scheme by its members;

• Mandatory Minimum Benefits instead of PMB’s

Key Features Continued• To provide for a Health Services Providers Register;• Council may require information from suppliers of relevant health services

concerning the services rendered by them to beneficiaries; • To do away with appeals to the Council• To establish an Appeal Board consisting of part time members, and to

determine its jurisdiction and powers• To introduce an enhanced system of governance of medical schemes• To empower the Council to determine broker fees from time to time and

define the circumstances in which a medical scheme may receive payment of broker fees due by its members to a broker

• To declare the carrying on of the business of a medical scheme by a person not registered as a medical scheme, to be a separate offence and to prescribe the criminal penalties that may be imposed on persons convicted of that offence

Areas of the Bill that need strengthening

• Definitions• Central Beneficiary Registry section needs rewording• Governance of Administrators• To provide for application to the High Court for an appropriate

order in the event of irregularities in any election of a member or members of a board of trustees of a medical scheme;

• To extend the functions of the Council for Medical Schemes (“the Council”);

Definitions to be added

Associated party (linked to medical scheme or intermediary by virtue of a family or business relationship.

Emergency medical condition, public sector health service and preferred providers.

Mandatory Minimum Benefits

Comprehensive Service Benefits

NHI Bill

Corporation between the Fund, DoH and CMSBenefits Advisory Committee

Stakeholder Advisory CommitteeHealth benefits pricing committee

Annual determination of prices (Facilities & professionals) Collate utilisation data (M&E)

Implementation of information management systemNational Health Information Repository and Data System contributionService and performance profile of all contracted service providers

Comprehensive health service benefitsReferral pathways (no copayments)

Purchasing of voluntary health insurance (complementary services)

INTERSECTION-NHI BILL AND MSA BILL

INTERSECTION NHI BILL & MSA REPORTS

MSA Bill

Share available resources, expertise and processes with the FundComprehensive health service benefits

Collect prices, utilization and costs of relevant health servicesEstablish, maintain and administer a Central Beneficiary Register

Health Care Providers RegisterNo co-payment or the use of deductible

Regulation of Voluntary Health Insurance

Conclusion

• Excited and happy that Bills have finally been released• On the whole the Bills are supported by the CMS• There are areas that need redefining and strengthening• CMS will be making further inputs into the process like other

stakeholders• We hope this publication of the Bills and attendant process,

answers the often asked question about the immediate future of schemes

• We are looking forward to the finalisation of the process to ensure that the CMS is an effective and efficient industry regulator

Conclusion

• We note the interactions between the 2 Bills and the Health Market Inquiry provisional recommendations

• We see all three as talking to the Health Reform that is cited in the NDP

• We also see the CMS in particular playing a key role in the transition towards the full implementation of the NHI

A CRITICAL ASSESSMENT OF SOUTH AFRICA’S HEALTH REFORM LANDSCAPE

Prof Alex van den HeeverChair in the field of Social SecurityWits School of [email protected]

Presentation to the South African Medical Assoication19 August 2018

There is quite a lot to talk about…

• Significant structural concerns with the health system, both the public and private health sectors/systems

• Three sets of reforms have recently been tabled, two in Bill form and a third the provisional outcome of the Health Market Inquiry into the private health system

• This talk reviews the adequacy of tabled reforms against the backdrop of a health systems diagnostic - the focus is principally on the systemic features of the system influencing performance

Context

Universal Health Coverage

• Is an objective of all countries• Is achieved through many different mechanisms –

with no country the same

• But note:– National Health Insurance is a mechanism and not an

objective– South Africa has universal health coverage – with lapses

entirely a consequences of government failure to act

National Health Accounts: South Africa (% of GDP)

3.3 3.7 3.6 3.5 3.3 3.2 3.2 3.1 3.2 3.1 3.2 3.3 3.3 3.5 3.9 3.9 4.1 4.1 4.1 4.1

3.4 3.3 3.6 3.7 3.9 3.7 3.9 3.9 4.0 3.9 3.6 3.4 3.4 3.53.8 3.9 3.9 3.9 4.0 4.0

1.5 1.4 1.3 1.2 1.21.1 1.0 0.9 0.9 0.9 0.8 0.8 0.7 0.7

0.6 0.6 0.6 0.6 0.6 0.6

0123456789

1019

95

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Perc

enta

ge o

f GD

P

Year

Sum of Gov exp (% of GDP) Sum of Social security (% of GDP)

Sum of Private pre-paid (% of GDP) Sum of OOP (% of GDP)

Source: World Health Organisation, National Health Accounts

Some features of the public health

system

There a number of headline concerns regarding the performance of the public health system

• Contingent liabilities – medico-legal claims R35 billion (National Treasury) (Actual figure likely to be higher and increasing)

• Accruals relating to non-staff expenses – around R7 billion for Gauteng Province with an unknown level for provinces outside the Western Cape

• Quality of care indicators suggest the public health system is under-performing relative to what is feasible (i.e. performance failures are not principally a function of resources – which have in fact improved over time)

Real changes in public health sector remuneration broken down by cost driver (from

2005/6 to 2015/16) (2015/16 prices)

-4 000

-2 000

0

2 000

4 000

6 000

8 000

10 00020

06/7

2007

/8

2008

/9

2009

/10

2010

/11

2011

/12

2012

/13

2013

/14

2014

/15

2015

/16

Rand

s (m

illio

n)

Financial year

Unit cost change Population Post changes (residual)

Quality of public health care – the Office of Health Standards Compliance

Only 11.9% of public hospitals meet the basic OHSC norm, representing only 18.8% of the beds evaluated

But the quality assurance scores don’t correlate with health outcomes using facility-based MMRs

(Facility-based MMR (maternal mortality ratio per 100,000 live births) averaged for the period 2010 to 2012)

??

?

Score range Number of hospitals % of total Number of

beds % of total

80%+ 16 11,9% 8 377 18,8%70-80% 25 18,5% 11 798 26,5%60-70% 38 28,1% 13 775 30,9%50-60% 27 20,0% 6 658 15,0%40-50% 25 18,5% 3 521 7,9%30-40% 2 1,5% 110 0,2%20-30% 1 0,7% 40 0,1%10-20% 0 0,0% 0 0,0%0-10% 1 0,7% 240 0,5%Total 135 100,0% 44 519 100,0%

Row LabelsWeighted

average quality score

MMR Benchmark MMR

Western Cape 74,5 77,1 19,0Gauteng 72,2 141,1 19,0Eastern Cape 59,0 167,2 19,0North West 73,6 179,2 19,0Limpopo 61,4 182,7 19,0Kwazulu Natal 71,2 185,2 19,0Mpumalanga 58,4 194,2 19,0Northern Cape 46,3 202,6 19,0Free State 63,0 209,4 19,0

Changes in total beds in South Africa 1976 to 2010: public and private sector

020,00040,00060,00080,000

100,000120,000140,000

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Beds

Years

Beds (pub) Beds (prv)

Source: derived from Health Systems Trust data

Some features of the private

health system

Medical scheme real per capita claims cost changes from 1980 to 2016

01 0002 0003 0004 0005 0006 0007 000

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

20

16

Ran

ds

pe

r b

en

efic

iair

y p

er

ann

um

(2

01

4 p

rice

s)

Year

General practitioners Medical specialists Dentists

Dental specialists Allied and support Private Hospitals

Provincial Hospitals Medicines (out-of-hospital) Ex-gratia payments

Other benefits

Source: Annual Reports of the Council for Medical Schemes

ICU/HC beds per 100,000 in South Africa (2016 estimate)

5,9 11,9

17,4

8,9 1,9 3,3 4,9 4,8

14,3 10,0

4,0 7,4 7,6

4,2 1,4 1,3 2,6 3,0 8,5

4,9

21,3

33,4

49,4

42,0

8,0 14,7

19,4 16,9

31,7 35,8

0,0

10,0

20,0

30,0

40,0

50,0

60,0

East

ern

Cap

e

Free

Sta

te

Gau

teng

Kw

aZul

u-N

atal

Lim

popo

Mpu

mal

anga

Nor

th W

est

Nor

ther

n C

ape

Wes

tern

Cap

e

Tota

l

ICU/HC per 100,000 RSA ICU/HC per 100,000 PUB ICU/HC per 100,000 PRV

What happens elsewhere?

Country ICU/HC per 100,000

France 11,6 Switzerland 11,0 Spain 9,7 United Kingdom 6,6 Netherlands 6,4 Sweden 5,8

Index trends in private hospital beds compared to medical scheme claims

data 2000 to 2017

100

120

140

160

180

200

220

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Indi

ces

YearTotal beds Acute bedsICU & HC beds Psych bedsDay beds BeneficiariesHosp costs Specialist Claims (pbpa)

Number of medical schemes

46 41 41 35 33 27 26 25 24 23 22 21

83 83 80 78 7773 71 67 62 60 60 60

129 124 121113 110

100 97 92 86 83 82 81

0

20

40

60

80

100

120

14020

05

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Num

ber

of m

edic

al s

chem

es

Year

Open Restricted Total

Medical scheme beneficiaries (000)

4 906 5 050 4 951 4 889 4 815 4 800 4 760 4 760 4 847 4 900 4 921 4 940

1 930 2 077 2 527 2 986 3 253 3 516 3 766 3 919 3 929 3 914 3 871 3 9256 836 7 127 7 478

7 875 8 069 8 316 8 526 8 679 8 776 8 814 8 792 8 865

01 0002 0003 0004 0005 0006 0007 0008 0009 000

10 000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Med

ical

sch

eme

bene

ficia

ries

Year

Open Restricted Total

Average age by open medical scheme (2016)

0,0

10,0

20,0

30,0

40,0

50,0

60,0Th

ebem

edM

akot

iH

osm

edG

enes

isM

edim

edSi

zwe

Dis

cove

ryM

edsh

ield

Sure

med

Bon

itas

Mom

entu

mM

edih

elp

Key

heal

thC

ompc

are

Res

olut

ion

Fedh

ealth

Topm

edB

estm

edC

ape

MP

Spec

tram

edSe

lfmed

Aver

age

age

of s

chem

e

Open commercial medical scheme

Average age by scheme

Medical scheme age structure by monthly risk contribution band (2016)

Contrib band (risk) (Rands) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

0 - 501 22 19 26 23 24 20 25 25 24 24 25 18501 - 1001 18 16 16 15 16 15 17 17 19 20 20 181001 - 1501 22 22 22 24 23 23 21 20 20 21 22 211501 - 2001 34 35 35 35 34 30 29 29 32 33 32 312001 - 2501 35 39 44 43 45 40 35 37 41 37 36 382501 - 3001 50 45 44 41 48 53 50 43 39 42 44 473001 - 3501 49 57 51 50 46 48 48 50 54 53 55 533501 - 4001 49 54 60 63 46 46 35 53 52 55 53 564001 - 4501 50 69 64 61 58 62 59 49 49 56 62 704501 - 5001 56 64 67 58 55 58 57 58 59

5001+ 26 54 58 60 49 64 63 59 59 60 49 52Average 32 32 31 32 32 32 32 32 32 32 33 33

Underwriting results by contribution band (2016 prices) for the 2016 financial year (Discovery

Health Medical Scheme)

year 0 - 501 501 - 1001 1001 - 1501 1501 - 2001 2001 - 2501 2501 - 3001 3001 - 35012005 15 178 294 -57 951 059 255 314 737 -1 209 590 189 2006 1 533 047 561 419 462 -1 150 736 188 2007 399 492 263 925 530 650 -170 866 280 2008 389 527 784 804 991 442 -434 076 759 -288 713 007 2009 194 565 568 880 507 890 -637 713 094 -294 266 816 2010 -23 767 937 1 056 213 575 -708 568 036 -359 894 247 2011 -86 872 044 1 162 869 151 -805 002 624 -377 951 287 2012 -327 685 936 1 612 581 488 -697 821 391 -344 037 109 2013 -131 616 267 1 973 050 385 -2 226 767 -463 028 120 -314 914 766 2014 -233 119 822 1 657 866 830 405 786 290 -623 382 462 -330 841 858 2015 -469 663 653 1 652 357 090 365 785 600 -660 736 649 -348 639 776 2016 -445 440 004 1 421 009 737 287 774 602 -810 367 370 -350 527 015

Grand Total 15 178 294 -790 998 060 13 963 712 435 -4 059 433 445 -4 576 161 351 -1 338 433 509 -350 527 015

Source: Council for Medical Schemes data from schemes audited financial statements from 2005/6 to 2016/17

National health insurance bill

Key features

• Establishes a National Health Insurance Fund– Functions

• Procurement/purchasing• Accreditation – in conjunction with the OHSC

Provincial health services

Private health services

RationaleWHAT PROBLEM ARE WE SOLVING IN SOUTH AFRICA TO ACHIEVE UINVERSAL HEALTH COVERAGE?

• The World Health Organisation recommends that countries should spend 5% of GDP onhealth.

• South Africa currently spends 8.7% of GDP on health (2018)• The private sector spends 4.5% of GDP on health but only provides care to 16% of the

population.• The public sector spends 4.2% of GDP on health but only provides care to 84% of the

population

DEEPLY ENTRENCHED INEQUITIES

There is no diagnostic provided that talks to the actual

structural problems in the health system

General TaxesRevenue

Pooling/Purchasing

Household contributions

Provision Public services Private services

National Fund Medical Schemes

ContractContract

Supplementary benefits

The Big Idea


Pooling/Purchasing


Provision

Medical Schemes

Public services

Assumes 100% substitution of

expenditure from medical schemes to

public sector (zero-sum game)

National Fund

Private services

ContractContract

The Big Idea


Pooling/Purchasing


Provision

Medical Schemes

Public services Private services

National Fund

ContractContract

The Big Idea

Financing – according to the MOH

“We made a mistake with the figures. I then went for advice to the World Bank and the World Health Organisation and they asked why am I trying to do this, it can’t be quantified by any human being because the costs are so variable.” (Minister of Health)

The following are the financing issues not addressed…

• In developing countries general tax revenues cannot fund a single system for all – it will hit a limit insufficient to offer universal coverage

• Additional revenue needs to be mobilised through– Contributory social insurance schemes– Contributory regulated private health insurance – usually

mandatory, risk-equalised and government subsidised with a package of services that must be guaranteed and underwritten by private actors rather than the government

The package… what is to be covered?

Supply-driven – what is provided is the package

subject to treatment protocols and referral

systems

Public sector - funded exclusively by general

taxes

Explicit positive and negative lists

Contributory/insurance -funded mainly by own

contributions

Risks• Prices not managed• Service quality not transparent and not managed• Public sector – demand exceeds supply• Insurance systems – supplier induced demand• Poor contracting

The system of guaranteed protection (of the package) requires constant review, which takes account of societal priorities and technical

considerations – no such reviews are presently carried out and the NHI Bill does not suggest it understands the distinction between a supply-

driven and an insurance package

+ =

Key proposals with systemic implications

• Governance of the NHIF and the OHSC– Effectively everyone appointed by the MOH

• Central hospitals to fall under the national MOH

Transitional arrangements

• Phase 1 – “Phase 1 encompassed a period of five years from 2012 to

2017 and included testing of effective health system strengthening initiatives.”

• There is no evidence of any “system strengthening initiatives”

• Phase 2 will be for a period of five years from 2017 to 2022 and will -– continue with the implementation health system

strengthening initiatives, including the alignment of human resources with that which will be required under the Fund

– include the development of National Health Insurance legislation and amendments to other legislation

– include the undertaking of Initiatives which are aimed at establishing institutions that will be the foundation for a fully functional Fund

– will include the interim purchasing of personal healthcare services for vulnerable groups such as children, women, people with mental health disorders, people with disability and the elderly

• Phase 3 will be for a period of four years from 2022 to 2026 and will include-– the continuation of Health systems strengthening activities

on an ongoing basis– the mobilisation of additional resources as approved by

Cabinet– the selective contracting of healthcare services from

private providers

Building blocks of a costing

General tax funded public sector package Tax credit

Private contributions

Income

Low High

Rand

spe

r cap

ita

Building blocks of a costing approach

General tax funded public sector package

Additional funding

Income

Low High

Rand

spe

r cap

ita

Private contributions (how would the private sector top-

up an in-kind subsidy?)

?

The enhancement of the per capita expenditure on public sector users, even if realised, is very unlikely to materially improve service quality by much while retaining a strong demand for those with adequate incomes to demand private coverage

Health market inquiry

Key findings

• Substantial market failure on both the funder and provider sides of the system

• Significant market concentration– Medical schemes– Medical scheme administrators and related corporate

groups– Hospital groups

• Funder (administrator) profitability– Sustained high profit margins– Discovery at “multiples” of other administrators!

• No disruptive market innovation despite high costs and sustained high profits

• Supplier induced demand significant, with funders showing little interest in addressing the problem (retaining ffs)

• Providers and funders don’t compete on features that matter to consumers (such as costs and quality)

• Market lacks transparency for consumers– Scheme benefits complex– No information on health provider quality– Brokers not incentivised to properly advise members

• HPCSA ethical rules represent a barrier to innovation

RMIH

Royal BHPL

GEPF

DHLMMI HL

FRG

RMBH

Remgro

Mediclinic

MetrP-Health

MMI-G/riskMM-Health

MMI-CareC

D-Health

D-Vitality

D-Life CID-Life (LT)

D-Insure (ST)

MMI-Wellness

42.0%28.2%

33.9%13.5%

Ordinary shares of unknown

proportion

25.2% 25.8%

15.0%

8.0%

10.4%

8.6%

30.3%

15.0%

Majority shareholder

AfroCentric Investment Corporation

AfroCentric Health AssetsSanlam Wealthsmiths

AfroCentricHealth Pharmacy Direct

CurasanaWholesaler Activo Health

Medscheme

Aid for AidsHelios IT solutions

Bonitasmarketing

Pharmacy dispensing Pharmacy and medical products

wholesaler

Sells medical products to pharmacies

Dedicated broker arm for Bonitas open scheme

administered by Medscheme

Bonitas Marketing was previously owned by Bonitas

and sold to Meschemefollowing regulatory action by

the CMS

Formerly Lethimvula

71.3%

28.7%

28.0%100.0%100.0%94.1%

100.0%

Recommendations

• Proposals take the form of a package and partial implementation not supported– Risk adjustment mechanism on basic benefits– Basic and supplementary benefits – to achieve easy to

understand standardised benefits– Reinsurance (social) for start-up schemes – Efficiency discounts– Contribution subsidy – for income subsidy (converted from

tax credit)

• Brokers– Opt-in system (annual)– Explicit contracts with members– Members free to choose their broker– Only pay if a broker is chosen– Tied brokers earn less– Schemes must be able to deal directly with members if

members so choose – without an additional fee

Supply side regulator for healthcare (SSRH)

• Supply side regulator for healthcare (SSRH)– Licensing unit– Economic value assessment unit– Health services monitoring unit– Health services pricing unit

• Outcomes measurement and reporting– Outcomes Measurement and Reporting Organisation

(OMRO)– To be functional within 6 years– OMRO must be strictly independent from government

• Tariff setting – for fee-for-service tariffs– Regulated prices with meaningful consultation– Multilateral negotiations– (Coding systems public domain and determined by the

SSR)

• Bilateral negotiations (non-ffs)

The array of contracts in the private health system

Purchaser-driven contracts

Cons

umer

-driv

en c

ontr

acts

Price only (ffs)

Price + Demand

Price+ Demand + Quality

Price only (ffs)

Price + Demand

Price+ Demand + Quality

Only this part of the system would have prices determined

through multilateral negotiations

Industry has full discretion to enter into value-adding bilateral contracts

Medical schemes/

administrator

Impact of the Risk Adjustment Mechanism

Rating bands (number of)

Medical scheme options/plans differentiated by levels of coverage in order to indirectly risk rate

(number of)

0

1

2

3

4

5

6

7

1 2 3 4 5


Mandatory benefits

A

B

C

Current system, with proliferation of options at varying levels of coverage

A, B, and C reflect stable “equilibrium” points that

fully accommodate for risk differentials between

schemes

Removal of demographic competition

Change in organisation of medical schemes benefits – heightening

productive competitionRi

sk g

roup

1

Risk

gro

up 2

Risk

gro

up 3

Risk

gro

up 4

Mandatory benefit

Supplem. benefit 1

Supplem. benefit 2

PMB

PMB

PMB PM

B

Non-transparent (current)Transparent (with revised regulatory

framework)

Mandatory reinsurance – system pooling –increasing opportunities for market entry of

small insurers without sacrificing opportunities for purchasing at scale

• Mandatory reinsurance– Retrospective reimbursement for relevant catastrophic

claims up to a fixed value, where incidence for a diagnostic category exceeds what is predicted by the REF

Expected cost before REF

Expected cost after REF

Actual cost experienced

Reinsurance reimbursement

A complete framework – not in recommendations

Mandatory package – can be differentiated based on efficiencies, with cost savings available

to consumers (in MSAB not HMI)

Risk equalised contribution/price per member (P)

Stan

dard

Net

wor

k 1

Net

wor

k 2

P1

P2

P3

Consumers choose providers based on transparent indicators of value (cost and quality) (providers can provide cash rebates/discounts to attract consumers

Medical scheme chooses the providers – but information on provider quality must be made explicit (i.e. scheme must make value-based choices to attract membership)

Competition generated between networks, network arrangements and free consumer choice)

Strategic way forward?

Although the currently proposed NHI is a notional option, it cannot achieve any

meaningful health systems objectives in the foreseeable future

For arguments sake lets say there are two options

• Option 1 – the NHI as proposed model for universal health coverage– Consolidates and centralises the pooling (vertical and horizontal) and

purchasing/procurement for the basic package of services for the entire population (does not address structural failures of the public and private systems; centralises functions that should be decentralised; fails to address governance framework)

• Option 2 – the hybrid NHI model for universal health coverage– Strategic pooling at the national level– Decentralised purchasing through

• Provinces – but with enhanced governance• Medical schemes – as proposed by the Health Market Inquiry

– Structural reforms targeted at systems weaknesses (governance for decentralisation in the public sector; in the private sector removal of competition on unproductive market features + enhanced competition on productive market features)

Option 2 – NHI designed on uniformity of the subsidy regime


Purchasing


Pooling

Risk adjusted resource allocation

Risk equalisation

Contribution subsidy

Provision Public services Private services

Provinces Medical Schemes

Contract

Conditional allocations

Contract


Min benefits

Current NHI proposal Feasible and desirable

Resource allocation (not health-specific)

Centralised resource allocation

Centralised resource allocation

All purchasing

Purchasing

Private

Public

Resource allocation

Purchasing

Public

Public

Resource allocation

Purchasing

Private

Public

Sub-regional resource allocation

Public Public

National

Provincial

Local

Strategic purchasing and catastrophic cover

Private

Government tier

Public health system architecture

Discussion

Medical schemes amendment bill

This is provided as additional material as it is too long for the talk. It can be referred to if questions

arise. In large part the Health Market Inquiry supersedes what is contained in the disjointed

MSAB. It is however noteworthy that the Minister’s briefing was at odds with the actual content of the MSAB – raising serious questions about the quality

of the policy process

Medical Schemes Amendment Bill –what the Minister said

• “The first amendment is to abolish what has come to be known as co-payments…”– Furthermore, the data at our disposal shows that medical schemes are holding

reserves of close to R60 billion that are not being used.– Granted, there is a statutory requirement that medical schemes should have 25%

of their income in reserve. This is to cater for emergencies. But presently the R60 billion is equivalent to 33% reserves, which means unnecessary accumulation at the expense of patients.

– These huge reserves were accumulated partly through high premiums but also by introducing the co-payments such that medical schemes avoid having to pay or even dip into the reserves if the situation demands.

– Furthermore the Council for Medical Schemes (CMS) is busy reviewing this statutory requirement of 25% with a view to releasing enough money for patients rather than holding a lot of reserves while patients suffer the hardships.

• The MOH fails to understand the nature of a reserve relative to a current liability – such as a benefit payment

• “The second amendment is to abolish the practice of using brokers within the medical scheme environment”– “We are aware that most of the work supposedly done by

brokers is actually done by the Council for Medical Schemes - the statutory body.” (MOH)

– “We believe that brokers play an important role in advising members but that their interests should be aligned more closely to those of applicants/members.” (HMI)

• Brokers are not abolished in the MSAB!

• “The third amendment is to abolish the practice of Prescribed Minimum Benefits (PMBs) and replace it with comprehensive service benefits.”– “To address the lack of comparability across scheme

options and inability of consumers to compare the value of these options, the HMI proposes that a standardised benefit package be developed that must be offered by all schemes (the obligatory ‘base benefit option’).” (HMI)

• “The fourth amendment deals with the various unequal and even unfair benefit options which medical schemes are subjecting their members to.” – “The amendment prevents any medical scheme from

implementing any benefit option unless approved by the Registrar of the Council for Medical Schemes and in doing this the Registrar will have to determine first that such an option is in the best interest of the member.”

• This is already in the MSA – via the approval of amendments to rules in section 31(1)(a) and (b)

• “The fifth amendment is to declare the carrying on of the business of a medical scheme by a person not registered as a medical scheme to be a specific offence.”

• This is already in the Medical Schemes Act

• “The sixth amendment is the creation of a central beneficiary and provider registry and the management thereof by the Registrar of the Council for Medical Schemes.”– Was provided for in the MSAB of 2008 which was allowed to

lapse because it related to the REF– “Risk adjustment would be of little use if it is not applied to a

standard basket of benefits. In the absence of a standard package, it would be impossible to measure the risk across schemes fairly. Therefore, as indicated above, the HMI proposes that a risk adjustment mechanism be implemented for the base benefit package to be offered by all schemes.” (HMI)

• “The seventh amendment is to introduce income cross-subsidisation model”– “The essence of NHI which must start now even with the present medical aid

schemes is that the rich must subsidise the poor, the young must subsidise the old and the healthy must subsidise the sick. The present contribution table charges the same rate for a lower income earner and a high income earner for the same benefits. This practice completely negates the principles of income cross-subsidisation.” (MOH)

– “To address the needs of low-income scheme members, it is recommended that the current tax credit regime be reconstituted to take the form of a contribution subsidy administered through the RAM rather than though the South African Revenue Services. In this way the RAM would be able to integrate both a risk and income adjusted subsidy in a manner consistent with similar arrangements around the world.” (HMI)

• Income cross-subsides can only be introduced through government subsidies. There is no way that open medical schemes can assess incomes as a basis differentiating contributions

DOH consultation report of 2002

• “Income-based cross-subsidies are generally achieved through the tax system, or mandating insurance in a manner that closely follows normal tax principles. In essence people pay according to their means, but receive benefits according to their needs. The following instruments are important within the South African context:– The level of general tax funding for public services;– Subsidies to the private sector (tax subsidies versus on-balance sheet per

capita subsidies);– Contributions to medical schemes (flat-rate versus income-based); and– Mandating contributions to either social health insurance or medical

schemes.• The redesign of the income tax subsidy represents the only viable

short- to medium-term measure for achieving minimum required income-based cross-subsidies across the entire health system, both public and private.”

• The eighth amendment is to compel medical aid schemes to pass back savings if a member uses a designated service provider according to the rules of the scheme. – Presently medical aid schemes compel members to use

designated service providers in order to save money. – This is a good practice to be encouraged but however the

problem is that these savings are taken over by the scheme or the administrator instead of being passed on to the member in the form of premium reduction.

• I can’t find this in the MSAB

• “The ninth amendment deals with the cancellation of membership and waiting periods between joining a scheme and accessing benefits.”– “This is because under NHI there will be no penalty related to

late joining or age. This is further to protect the interest of living spouses after the passing of the principal member or after retirement prior to payment of their benefits.” (MOH)

– Waiting periods are retained in the MSAB – although some provisions are not clear

– The HMI retains waiting periods and looks for additional measures to attract membership for adults under the age of 30

• “The tenth amendment is Governance of medical schemes.” – “This amendment for minimum educational requirement

and expertise to be a member of a Board of Trustees or a CEO of a Medical Aid Scheme.”

• Ahem… The MSAB goes far further than this

• Provides for minimum and maximum board size (no smaller than 5 and no more than 10)

• Fit and proper requirements• Requirement for a scheme CEO • The CEO is allocated specific responsibilities in terms of the

Act (but no requirement for a CFO ?)• Establish parameters for BOT remuneration• Removal of a CEO by the BOT – including appropriate

disclosure to the Registrar• Ability to publish norms for good governance (as guidance)

Not mentioned by the Minister

Section 34 of the principal Act is hereby amended by the addition of the following subsection:"(3) The registrar may, after consultation with the Minister, restrict the extent of benefits offered by medical schemes, having regards to the benefit and services coverage under the Fund thereby eliminating duplicative costs for the same benefit.”

Documents

NHI BILL - SAMA · PRESENTATION OF THE NATIONAL HEALTH INSURANCE FUND BILL. Dr Anban Pillay. SAMA CONFERENCE. Sun City. 19. th. August 2018. WHAT IS NHI? • NHI is a health financing