The Patient Queue: is free healthcare for all possible in South Africa?

“Private medical schemes stand in the way of the government’s proposed National Health Insurance scheme and should be abolished.” ~ Dr Kgosi Letlape, president of the South African Health Professions Council.

The South African government has been muttering about a National Health Insurance (NHI) for a number of years. Mostly these murmurings have been ignored because the general consensus is that the country can’t afford it, it’s unreasonable, unworkable and probably, considering other SOE’s under stress, likely to be poorly managed.

However, with the recent announcement that government intends withdrawing the benefit of tax deductions on medical bills not covered by a medical aid, there is a rustle of concern that the idea is gathering momentum.

Choices ahead

Essentially there is a need to assist the unemployed and those with low incomes with healthcare. So, the provision of a free service to those in dire need is more than just an ideal but rather a necessity. The problem with this prospect is that it contains the phrase “free for all”. Which means everyone from a mining magnate to a CEO to a government minister will be able to join the queue for free medical care for a broken toe or open-heart surgery.

Currently, government assists medical aid members by allowing tax deductions on costs not covered by the medical aid. By withdrawing this benefit, the government intends to save billions – and this is partly the money they will use to facilitate a free for all national health service. An NHI stands to impact two major industries, namely the private medical insurance industry and private hospitals – and possibly therefore, many satellite industries connected with them.

The impact

Wealthier medical aid clients may opt to continue to pay their medical aid premiums along with the extra tax to government to fund the NHI because that might be preferable to taking their chances in the public system where working conditions may be compromised by a lack of equipment, training and provisions. However, those in the middle to lower classes may not be able to make that choice. They will find they no longer benefit from medical tax deductions, are continuing to pay ever-rising medical aid premiums, and in addition, are expected to pay extra tax for the NHI. Triple whammy.

It’s not difficult to see that under these onerous circumstances many members might well cancel their medical aid and take the free option of the NHI. It’s rather like being herded as recalcitrant sheep into a rickety pen; they will be forced to make this choice – with the lucrative offer of free just a short hop away.

Looking down this road, it seems that private medical aid schemes may stand to lose many members, and private hospitals will lose patients. Costs to compensate this loss will escalate – and eventually even the more affluent will feel the pinch, with members dropping out continually as private prices inevitably rise.

If this were compensated by the anticipation of excellent attention in well-run government hospitals, it might be acceptable. But the South African government has proved itself notoriously incompetent in running such institutions. How will so many of these already flawed institutions cope under an influx of millions of patients?

Inequality of access to healthcare

Many people, such as Letlape, feel that cost should not limit anyone’s access to healthcare. And he’s not wrong. The high costs of private healthcare puts it out of reach of many poorer South Africans, a situation the NHI seeks to resolve in one way or another. Granted, some government hospitals are offering good to excellent service, but there are some troubling statistics:

  • There is a dire shortage of trained medical staff in the country.
  • Only around 50% of doctors are servicing 16% of patients who can afford the costs, either personally or because they belong to a private medical scheme.
  • Approximately 80% of all medical specialists in South Africa are in the private healthcare sector, and only 20% in the public healthcare sector, which services 84% of the population.
  • The Hospital Association of South Africa has reported around 25 state doctors and 92 private doctors per 100 000 people, while the world average is 152 per 100 000. So even in the private sector, the numbers of healthcare practitioners are insufficient

Funding the NHI

“It is neither necessary nor appropriate for government to provide ‘free healthcare for all’. Those who can pay for their own healthcare … must be allowed to continue to do so.” ~ Jasson Urbach – Director & Head of Free Market Foundation Health Policy Unit.

Many medical scheme members, who are faced with increasing contributions, are nervous to resign from their schemes because of the long patient queues and possibility poor quality of care within the state system. However, if the state were to prove itself capable of providing truly revitalised services, many people might feel they could support the proposed NHI.

Private hospitals have shareholders and are profit-driven. There is also no limit to what private doctors may charge. If they are forced into salaried positions in an ailing public healthcare system, they might look elsewhere to apply their skills outside the country.

Several proposals have been made over the years for funding the NHI: the introduction of a payroll tax, a surcharge on taxable income, and increases in VAT. As South Africans already pay high personal taxes – and fund many private matters such as healthcare, education and security from their own pockets – the idea of even further taxation may be met with resistance.

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(Sources: World Health Organisation; SA Health Professions Council; Board of Healthcare Funders; Hospital Association of South Africa; Medical Schemes Council; South African Health Review)

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