HEALTH FINANCING REFORM PROPOSALS AND DEBATES National civil

HEALTH FINANCING REFORM PROPOSALS AND DEBATES National civil society consultation August 2008 1

Acknowledgement With thanks to Professor Di Mc. Intyre of the School of Public Health at the University of Cape Town for the statistics and information used in this presentation. We have also drawn on; Consultation report: Observations on Social Security Reform in South Africa – Social Security Department International Labour office – July 2008 Please note the proposals are not necessarily positions of the Black Sash. 2

Current situation 3

Current situation Our nation’s health has worsened over the last decade. For example; Under 5 mortality per 1000 live births: l 1990: 60 infants l 2005: 68 infants There is an escalating burden of HIV/AIDS and other noncommunicable diseases. There is a stagnation and deterioration in mortality rates. 4 At the same time there is inequity in access to health care with the majority low-income population seeking and receiving less care than the minority high-income population

Public and Private split: Percentage of population served 5

Public and private split: expenditure per beneficiary 6

Public and private split: Resources 7

Public sector under resourced l The public sector serves around 85% of the South African population l But about seven times the amount of money is spent on the private sector which serves about 14% of the South African population l Under these circumstances it is clear that we do not have an equitable healthcare system 8

But the private sector not all ok Due to: l l Stagnant membership l 9 Spiraling costs, reduction of benefits, lack of comprehensive health care, health promotion and preventative services Large number of schemes and packages: making it difficult for consumer to choose

Therefore there is a need for debate, reform and a drastic overhaul of health care financing policies in South Africa for the private and public sector - to improve cover for all and in particular to protect low-income and impoverished populations from devastating costs of health care. 10

How did we get here? Time line of policies and policy debate in SA 1994: 1995: 1997: 2002: 2007: 2008: 11 ANC National Health Plan released ANC Health Care Finance Committee established Department of Health establishes Social Health Insurance Working Group Taylor Committee proposed a path to a National Health Insurance ANC Polokwane Conference calls for a National Health Insurance A revival of a process for healthcare finance policy reform both within the ANC and various Departments of government but no formal proposal on the table as yet.

Progressive principles to inform our approach to health financing The right to healthcare Section 27 of the South African constitution includes the following; “ 1) Everyone has the right to have access to: a) Healthcare services including reproductive healthcare; …… 2) The state must take reasonable legislative and other measures within its available resources, to achieve the progressive realization of each of these rights 3) No one may be refused emergency medical treatment” l l 12 Universal Coverage The World Health Organization (WHO) describes universal coverage as: A health system that provides all citizens with adequate healthcare at an affordable cost.

Progressive principles to inform our approach to health financing continued l In order to achieve the right to health care – the health care financing system must allow for cross subsidisation from the wealthy to the poor and from the healthy to the ill. l The principle of social solidarity does not allow individuals to opt out of the health care system. To achieve social solidarity all living in South Africa must be able to benefit from the health system and all who can afford must contribute; 13 This is true whether or not individuals can buy additional private health care insurance. A discussion on equity is needed.

Key functions within health care financing l l Fund pooling: The idea of an individual and or state putting in money and people being assured of care when they need it. l Purchasing: Buying what is needed to provide health care (medicines, supplies, services, expertise). l 14 Revenue collection: Where money comes from; how much money and how it is collected (Tax, contributions to insurance, out of pocket). Provision: Healthcare being given to people. For each of these functions civil society should consider the following advocacy issues…. .

Key functions within healthcare financing: Advocacy Revenue collection: Where money comes from; how much money and how it is collected (Tax, contributions to insurance, out of pocket). l l l 15 Increase tax (personal/transactional) as the major revenue source Mandatory contributions proportional to earnings shared between employees’ and employers The employees contribution is to promote identification with the system State subsidies to the fund for unemployed and low income families No opt out: Everyone should contribute who can afford and everyone can benefit Will people be able to continue to buy private health insurance or top up the public healthcare?

Key functions within healthcare financing: Advocacy continued Fund pooling: The idea of an individual and or state putting in money and people being assured of care when they need it l l l 16 A National Health Insurance (NHI) fund to pool revenue from all economic sectors including private and public workers and possibly informal workers This fund would finance a health system to benefit all who live in SA Rationalise and regulate (or nationalise? ) medical insurance schemes to bring them into NHI and prevent a two- tier system Note that: NHI is proposed by Labour in particular COSATU and NEHAWU, the Peoples Health Movement and others ‘Social Health Insurance’ is normally used to indicate a different model: One that only benefits the contributors to the fund

Key functions within healthcare financing: Advocacy continued Purchasing: Buying what is needed to provide health care (medicines, supplies, services, expertise etc. ) l l l 17 l Money allocated from NHI fund to hospitals and districts on a needs -based formula The formula takes into account the size of population, demographics, socio-economic index, notifiable illnesses, infrastructure Hospitals would require major governance and management improvement coupled with the right to spend District structures make decisions on expenditure priorities Norms and standards established for providers who will need to be accredited based on quality, acceptable fees charged, primary healthcare principles applied etc. Civil society oversight, accountability and involvement at all levels

Key functions within healthcare financing: Advocacy continued Provision: Healthcare being given to people. Advocate for: Quality healthcare for all through the same system. l Indigent and unemployed households entitled to same benefits as contributing population l 18