PRESENTATION ON NATIONAL HEALTH INSURANCE POLICY FOR THE PORTFOLIO COMMITTEE OF HEALTH

1. PRESENTATION ON NATIONAL HEALTH INSURANCE POLICY FOR THE PORTFOLIO COMMITTEE OF HEALTH National Department of Health 23 August 2011

2. OUTLINE • Introduction • Problem Statement: Key Health Sector Challenges • Public Sector • Private Sector • Principles of NHI • Objectives • WHO Recommendations on Universal Coverage • Population coverage • Service coverage • Financial Risk Protection • NHI Policy • Pilots • First 5 years

3. INTRODUCTION...../1 • Introduction of an innovative system of healthcare financing • Far reaching consequences on the health of South Africans • Ensures that everyone has access to health services that are: • appropriate • efficient • good quality

4. INTRODUCTION......./2 • Improve service provision • Promote equity and efficiency to ensure all South Africans have access to affordable, quality healthcare services regardless of their socio-economic status

5. INTRODUCTION......./3 • SA health system inequitable.............with the privileged few having disproportionate access to health services • Recognition that this system is neither rational nor fair • Current system of healthcare financing is two-tiered

6. INTRODUCTION......./4 • Private Sector: • covers 16.2% of the population • relatively large proportion of funding allocated through medical schemes, various hospital care plans and out of pocket payments • provides cover to private patients who have purchased a benefit option with a scheme of their choice or as a result of their employment conditions • benefits employed subsidised by their employers – both the State and the private sector

7. INTRODUCTION......./5 • Public Sector: • Covers 84% of the population • funded through the fiscus • Poor management systems and oversight esp hospitals • under-resourced relative to size of population that it serves and the burden of disease • less human resources than the private sector – longer waiting times and lower clinical consultation time – increased risk of error

8. INTRODUCTION......../6 • To successfully implement a healthcare financing mechanism that covers the whole population such as NHI, four key interventions need to happen simultaneously: • a complete transformation of healthcare service provision and delivery; • the total overhaul of the entire healthcare system • the radical change ofadministration and management • the provision of a comprehensive package of care underpinned by a re-engineered Primary Health Care

9. PROBLEM STATEMENT • The 2008 World Health Report of the WHO details three trends that undermine the improvement of health outcomes globally, namely: • Hospital centrism, which has a strong curative focus • Fragmentation in approach which may be related to programmes or service delivery • Uncontrolled commercialism which undermines principles of health as a public good  • South African two-tier healthcare system is • unsustainable • destructive • very costly • highly curative or hospi-centric.

10. 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

11. QUALITY IN PUBLIC HEALTH FACILITIES • Cleanliness • Safety and security of staff and patients • Long waiting times • Staff attitudes • Infection control • Drug stock-outs

12. EXORBITANT COSTS OF HEALTH CARE IN SOUTH AFRICA (PUBLIC AND PRIVATE) • Cost of Private Health Care out of control at the expense of members of medical schemes • Cost of Public Health Care escalating at the expense of the fiscus 1212

13. WHAT DRIVES THE COSTS IN THE PUBLIC SECTOR? • 5 Major identifiable areas: • Compensation of employees • Pharmaceuticals • Laboratory Services • Blood and Blood products 5. Health Technology / Equipment 1313

14. Trends in Total Benefits Paid, 1997 - 2005 Source: Council for Medical Schemes

15. … THE COST DRIVERS ARE HOSPITALS AND SPECIALISTS…

16. AFFORDABILITY OF MEDICAL SCHEME CONTRIBUTION • A number of medical schemes have collapsed, been placed under curatorship or merged • Schemes have reduced from over 180 in the year 2001 to about 102 in 2009 • To sustain their financial viability, schemes tend to increase premiums at rates higher than CPIX

17. 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)

18. PRINCIPLES OF THE NHI • The Right to Access Health • Social Solidarity • Equity • Effectiveness • Appropriateness • Effectiveness • Efficiency • Affordability 1818

19. OBJECTIVES OF NHI • To provide improved access to quality health services for all South Africans irrespective of whether they are employed or not • To pool risks and funds so that equity and social solidarity will be achieved through the creation of a single fund • To procure services on behalf of the entire population and efficiently mobilize and control key financial resources. • To strengthen the under-resourced and strained public sector so as to improve health systems performance

20. SOCIOECONOMIC BENEFITS • Increased output as a healthy person works more effectively and efficiently and devotes more time to productive activities (i.e. fewer days off, longer work life span); • Broader knowledge base in the economy as the gains to education increase as life expectancy increases; • Increased “work life” and savings as a result of increased life expectancy may result in earning and saving more for retirement; • Increase in labour force activity 2020

21. CONSIDERATIONS FOR ACHIEVING UNIVERSAL COVERAGE-DIMENSIONSSource: WHO (World Health Report: 2010) 2121

22. 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 • produce evidence of this upon entry into South Africa • Refugees and asylum seekers covered in line with provisions of the Refugees Act, 1998 and International Human Rights Instruments ratified by the State

23. HEALTH SYSTEM REENGINEERING • Primary health care services shall be delivered according to the following three streams: • District-based clinical specialist support teams supporting delivery of priority health care programmes at a district • School-based Primary Health Care services • Municipal Ward-based Primary Health Care Agents 2323

24. DISTRICT CLINICAL SPECIALIST SUPPORT TEAMS • To address high levels of maternal and child mortality and to improve health outcomes • The teams will based in districts and include: • Principal obstetrician and gynaecologist • Principal paediatrician • Principal family physician • Principal anaesthetist • Principal midwife • Principal primary health care professional nurse • The role of these teams will be to provide clinical support and oversight particularly in those districts with a high disease burden

25. SCHOOL HEALTH SERVICES • Delivered by a team that is headed by a professional nurse • Services will include health promotion, prevention and curative health services that address the health needs of school-going children, including those children who have missed the opportunity to access services such as child immunization services during their pre-school years

26. MUNICIPAL WARD-BASED PRIMARY HEALTH CARE AGENTS • A team of PHC agents will be deployed in every municipal ward • At least 10 people will be deployed per ward. • Each team will be headed by a health professional depending on availability • Each member of the team will be allocated a certain number of families

27. MUNICIPAL WARD-BASED PRIMARY HEALTH CARE AGENTS • The teams will collectively facilitate community involvement and participation in: • Identifying health problems and behaviours that place individuals at risk of disease or injury • Vulnerable individuals and groups • Implementing appropriate interventions from the service package to address the behaviours or health problems

28. HEALTHCARE BENEFITS • 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 devices

29. HOSPITALS BENEFITS • As part of the overhaul of the health system and improvement of its management, hospitals in South Africa will be re-designated as follows: • District hospital • Regional hospital • Tertiary hospital • Central hospital • Specialized hospital • Each level of hospital designation will be managed at a newly defined level with appropriate qualifications and skills as defined by the National Health Council

30. ACCREDITATION OF PROVIDERS • Draft Bill on Office of Health Standards Compliance (OHSC) will soon be tabled in Parliament • An independent OHSC to be established with 3 units: • Inspection • Ombudsperson, • Certification of health facilities • Will facilitate the development of multidisciplinary organisational standards for healthcare facilities using evidence-based principles for standard development to evaluate compliance and to monitor progress

31. PAYMENT OF PROVIDERS • At PHC Level: Risk-adjusted per capita payments for accredited and contracted public and private providers • At Hospital level: Global Fee with a move to Case-based payment mechanisms as an alternative to fee-for-service with a strong focus on cost containment

32. UNIT OF CONTRACTING • District Health Authority will be given the responsibility of contracting with the NHI • supported by the NHI Fund’s sub-national offices to manage the various contracts with accredited providers • monitor the performance of contracted providers within a district

33. PRINCIPAL FUNDING MECHANISMS • Combination of sources: • fiscus • 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

34. Role of Co-payments • Co-payments will be levied under the following circumstances: • Services rendered not in accordance with NHI treatment protocols and guidelines • Health care benefits not covered under the NHI benefit package (e.g. originator drugs or expensive spectacle frames) • Non-adherence to the appropriately defined referral system • Services that are rendered by providers that are not accredited and contracted by NHI • Health services utilised by non-insured persons (such as tourists)

35. INDICATIVE COSTS OF NHI 3535

36. THE ROLE OF MEDICAL SCHEMES • Medical Schemes will continue to exist side by side NHI • May also provide top up cover • No one will be allowed to opt-out of NHI

37. PILOTING OF NHI IN 2012 • The first steps towards implementation of National Health Insurance in 2012 will be through piloting. • 10 districts will be selected for piloting. • NDOH conducting audits of all healthcare facilities • Criteria of choosing these 10 districts will be based on the results of the audits as well as the demographic profiles and key health indicators • Selection of the 10 districts will be 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

38. PREPARING FOR NHI • CEO Assessments • Designation of Hospitals • Revenue retention • PHC Re-engineering • District Health Profiles • Health Facility Audits • Provincial Quality Plans • Office of Health Standards Compliance and Accreditation • Service Package Piloting • Infrastructure improvement • Human Resource Strategy • Piloting of NHI • Timelines for preparatory work in readiness for NHI 3838

39. PREPARING FOR NHI • Regulations to be drafted to define levels of hospitals and the appropriate skills requirements to manage hospitals / public health facilities • Ministerial Task Team to advise on District Specialist Teams led by Chair of Confidential Inquiries into maternal, neonatal and under 5 deaths • Audit of Community Health Workers has been completed, and retraining and re-skilling to be undertaken 3939

40. PREPARING FOR NHI • Job Description -Population Focused Specialists (All levels and all facilities in catchment area) • Quality of health care for mothers, newborns and children • Equitable access • Coordinate, monitor, supervise and support MNCH services • Strategic planning and operational plans • Surveillance system, HIS, referral systems and M&E systems • Operational Research • Recruitment, training, development, mentorship support • Clinical governance • Advocacy and community engagement • District based Communication Strategy 4040

41. PREPARING FOR NHI • In 2010 there were 150,509 registered health professionals in South Africa. • From 1996 – 2008 there was a stagnation in growth of health professionals and a decline in key categories such as specialist and specialist nurses. • There is inequity in density of health professionals per 10,000 population between rural and urban areas, and between the public and private sectors. • Measuring for a ‘shortage’ in health professionals can be done in various ways. ‘Vacancies’ in the public sector are not an accurate method and are an unrealistic indication. 4141

42. PREPARING FOR NHI • Filling currently listed public sector vacancies would cost billions. • Staffing requirements should be based on service plans informed by norms and needs. • It is evident that South Africa has a nurse based health care system with 80% of health professionals comprising nurses. • South Africa does have considerably less doctors, pharmacists and oral health practitioners (and other health professional categories) per population 10,000 population than the other comparable countries. 4242

43. PREPARING FOR NHI • Education output of most professions has been stagnant for the past fifteen years. • Faculty output of MBChB graduates is not a full capacity for all faculties, and varies in quality for all professions. • Budget cuts in the 1990s led to a reduction in academic clinicians and the freezing of academic clinician posts has been sustained. • Specialist training in nursing has declined significantly and affects hospital service capacity. • Registrar and subspecialist training posts are 30 percent and 75 percent unfilled respectively due largely to lack of funding. 4343

44. Data Mapping for District Health Profiles • Data has been collected to develop profiles of health districts, for selection and prioritization for piloting • Following dimension have been applied: • Demographic • Socio-economic • Epidemiology/ Health Status • Service delivery • Performance • Data from all 52 health districts has been analyzed and preliminary ranking of districts based on these dimensions have been completed 4444

45. 4 Groups of indicators used • District management functionality self assessment. 5 Sections: • Service delivery platform • District management team • Other management functions • Financial management • Governance and community participation • Health information • Staffing • District office infrastructure 4545

46. 4 Groups of indicators used • 10 Socio-economic indicators • Deprivation Index District Health Barometer (DHB) 2007 • Population with private medical insurance rate (Household Survey 2007) • Unemployment rate (Community Survey 2007) • Informal and traditional housing rate (Community Survey 2007) • No access to improved sanitation rate (Community Survey 2007) • No access to piped water rate (Community Survey 2007) • No access to electricity for lighting rate (Community Survey 2007) • No access to refuse removal rate (Community Survey 2007) • No income or income less than R4 800 rate (Community Survey 2007) • Household head younger than 19 years rate (Community Survey 2007) 4646

47. 4 Groups of indicators used • 10 Health Outcome (MDG proxy) indicators • HIV prevalence (Antenatal survey 2009) • TB cure rate 2008 (ETR.Net) • Weighing rate 2010 (DHIS) • Diarrhoea incidence 2010 (DHIS) • Severe malnutrition 2010 (DHIS) • Pneumonia incidence 2010 (DHIS) • Measles 1st dose coverage 2010 (DHIS) • Antenatal coverage 2010 (DHIS) • Delivery in facility 2010 (DHIS) • Couple year protection rate 2010 (DHIS) 4747

48. 4 Groups of indicators used • 6 Service delivery indicators • Cost per PDE district hospitals 2008/09 (DHB) • PHC expenditure per capita 2008/09 (DHB) • PHC (non-hospital expenditure) per patient visit 2008/09 (DHB) • PHC utilisation 2010/11 (DHIS) • PHC utilisation under 5 years 2010/11 (DHIS) • PHC supervision 2010/11 (DHIS) 4848

49. PREPARING FOR NHI • Methodology (first 3 groups) • District and provincial profiles have been developed • Districts were ranked from best to worst performing for the 26 selected indicators and a score from 1-52 given where 1 is best performing district and 52 the worst. • Where districts have the same value the same score was given resulting in the last value is not 52 but a lower number. • Districts with the lowest scores are performing well and highest scores poor. 4949

50. PREPARING FOR NHI 5050