Kakoloti - Key issues facing the health sector in the next five years (2007)

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Key issues facing the health sector

in the next five years

Thabo RakolotiDirector: Public Private Partnership

National Department of Health

The BHF Annual Southern African Conference,

2007



Presentation Outline

• Legislative Framework

• Policy Context• Key strategic challenges

• Focus on key policy areas



and to “Prescribe mechanisms to enable a co-coordinatedrelationship between private and public health

establishments in the delivery of health services”[S56(1)].

The Minister of Health has the responsibility “to prioritize thehealth services that the state can provide taking intoconsideration health needs and resourcesavailable” (S4 (1)(e)

The

National

Health Act,

2003

“everyone has the right to have access to healthcare services, including reproductive health care”S.27(1)(a)

The Constitutionof the Republicof South Africa

“state must take reasonable legislative andother measures, within its available resources,to achieve the progressive realisation of each of these rights” S.27(2)

Legislative Framework



Cover Burden of disease Providers

Public

Private

•Indigent

•Low-income

•marginalised

•High income•Good risks

•Poor risks

(decrease)

•HIV/AIDS

•Infectious

•Communicable

•Chronic

•HIV/AIDS

•Infectious (na)

•Communicable (na)

•Chronic (reduced)

•Medical

•Nursing

•Pharmacy

System

POLICY CONTEXT



Key Strategic Challenges

Fragmentation of the health system, based onseparate financing and provision arrangements

for different socio-economic groups

health care resources available to differentsocio-economic groups within the population

all health care resources between and within

provinces, which has been increasing over thepast few years

financial, human and other resources between the

public and private sectors, relative to the populatio

they serve

G r

o w

ing m

a ld is t rib

u t io n

o f



Challenges with current financing system

– Private sector: covers 7m people

– Public sector: covers 39m, of which 7m fall outside means test

– Individual households: Out-of-pocket payments

– 7m low income people who cannot afford medical schemes, but do notqualify for free public services, so pay out of pocket

– Out of pocket payment is the most regressive form of health financing

– Inequity: public/private sector

– Inefficiency: excessive expenditure on hospitals

Inadequate Pooling of resources:

Inadequate financial risk protection

Inequity and inefficiencies in financing



Context: Healthcare Financing, 2006

Public sector

R52 billion

Private sector R66 billion

Serves 7 m

= R9 428 pp

Serves 38 m

= R1 368 pp



Context: Healthcare Provision in 2004,

Professional

category

Total Public sector

Estimated

dependants

34 611 781=82%

Private sector

Estimated

dependants

7 597 709= 18%

Public:

private ratio

General

practitioners

19 729 5 398=27.4% 14 331=72.6% 1:2,65

Medical specialists 7 826 1 938=24.8% 5 888=75.2% 1: 3,04

Dentists (including

specialists)

4 269 316=7.4% 3 953=92.6% 1: 12,51

Pharmacists 4 410 1 047=23.7% 3 363=76.3% 1: 3,21

Physiotherapists 3 406 463=13.6% 2 943=86.4% 1: 6,36

Occupationaltherapists 1 986 388=19.5% 1 598=80.5% 1: 4,12

Speech therapists

and audiologists

1 388 119=8.6% 1 269=91.4% 1:10,65

Dental therapists 306 121=39.5% 185=60.5% 1:1,53

Psychologists 3 808 222=5.8% 3 586=94.2% 1:16,15

Distribution of Health Professionals in the South African Health Care System (2004)

Source: Health and Health Care in South Africa (2004)



Partial Social Security Universal Social Securi

Key Issue: 1

– Universally available basic benefit for all citizens and specified classes of legal resident

– Contributory environment over-and-above pillar 1, characterized by strongmechanisms to ensure social solidarity:

• Income-based cross-subsidies

• Risk-related cross subsidies

• Mandatory participation

– Discretionary social security over-and-aboveminimum levels re arded as essential

Pillar 1:

Pillar 2:

Pillar 3:



Key Issue: Pillar 2

Out of Pocket Spending Prepayment

Income

Lo w ris k

Health risk

Hig h ris

k

X-subsidy from low to high risk X-subsidy from rich topoor

Ric h

Po o

r

Lo w ri s

k



Specific Issue: Access to Private Health Care

• The MSA sought to promote non-discriminatory access to

privately funded health care through –

– Open enrolment

– Community rating

– Protecting a core set of benefits from arbitrary attrition



Specific Issues: Access to Private Health care

• The major objective has been met but there are still concerns

involving the following:

– very limited growth in overall number of covered lives

– open enrolment for high risk individuals being frustrated through

indirect discrimination

– inappropriate benefit design– potential fragmentation of risk pools



Reform of the Medical Schemes Industry

Legislative Development from 2007- Medical Schemes Amendment Bill

- Introduction of the Risk Equalisation Fund

- Restructuring of the Benefit design

- Strengthening of the Governance framework

- Introduction of the general framework for low income products

- The Bill will be tabled in Parliament before the end of 2007



Contribution Protection Mechanisms?

• As a result of the escalation of the cost of health care, we are in

a process to:

• Create a statutory framework for effective pricing negotiationsbetween funders and health care providers.

• Extensive consultation as soon as clear proposal are in place.



Health Technology Appraisal

• Draft Regulations on Health Technology in2008/9



Public Private Partnerships

- Build Operate Transfer where the private sectors builds and operates a

new facility for a given period of time and then transfer it tothe public sector at the end of the concession period

- Build Transfer Operates that is where the transfer of the facility to

the government would take place as soon as the construction is

completed, rather than at the end of the concession period and

– Revitalise Operate and Transfer where the private sector could

rehabilitate the existing public health facilities at its own risk, and then

operates and maintains the facility at its own risk for a given period

– We are working with the National Treasury to prepare concrete proposals

for consultation.



Infrast ru

ctur e

developm

en

t

Delivery of clinical services

0% 100%

0%

100%I n

d i c

a t i v

e f a

v o u r a

b l e

t r a

j e c t o

r y

c o m

b i n

i n g b

o t h

i n f r a

s t r u

c t u

r e d

e v ’ t a

n d

c l i n

i c a l s

e r v

i c

e s

1

2

3

frastructure v/s Service Delivery: PPPs



Achieving Millennium Dev’t Goals

• The Millennium Development Goals (MDG’s) have set clear targets and goals for eradicating poverty and related human

deprivations.

• The MDGs include 8 goals, 18 targets and 48 indicators: 3 of thegoals, 8 of the targets, and 18 of the indicators relates directly to

health

• Creating a standard reporting and evaluation framework for thepublic and the private health sector.



THANK YOU

Kakoloti - Key issues facing the health sector in the next five years (2007)

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