Options for South Africa:Financing

Di McIntyreHealth Economics Unit

University of Cape Town

NHI conferenceDecember 2011, Midrand

Where from ?

WHO National Health Accounts dataset (2009 data)

Where to?

WHO National Health Accounts dataset (2009 data)

How to ?

Some may say:

It is simple ….

just make the voluntary pre-payment mandatory

Voila !!

WHO National Health Accounts dataset (2009 data) – not quite!!!

How to ?

• Make the voluntary pre-payment mandatory. But:• Only to cover part of population ?

• Cover all ? Although much debate on NHI, consensus that extending medical scheme cover to all would be unaffordable (up to 25% of GDP)

• Would require major reform to make schemes suitable for being part of mandatory pre-payment

How to ?

• Key question:Take on massive task of reforming schemes and

setting up risk equalisation; orContinue schemes as voluntary schemes, and if so,

what kind?:• Complementary: ‘Top-up’ for services and/or to

cover co-payments• Supplementary: Faster access and more choice• Substitutive: ‘Double cover’ (or opt-out)

• In choosing, need clarity on what is the objective?

How to ?

• Surest way to rebalance mandatory and voluntary pre-payment is to have a strong universal system:• Financial protection for all• Access to needed care of good quality

• Transition:Improved public funding (that benefit all)Clearly defined role for voluntary

insurance

What should focus be?

• Green paper - priority in first five years:• Rebuild public sector: PHC re-engineering, hospital

management reform (and purchasing capacity)• This will only be possible if we gradually increase

allocations from general tax revenue• Pilot districts – need to start urgently, but need to

demonstrate benefits (service quality and access, good management, efficient use of resources):Secure increased general tax fundingBuild support for new earmarked taxes (and

explore innovative financing)

Purchasing function

• Irrelevant if public or private providers if have active purchasing• Will not get efficient and equitable delivery of

high quality services unless we have active purchasing:• Identify health care needs and ensure that

services are available and of good quality• Change provider payment mechanisms – line-

item budgets and fee-for-service out• Power to influence provider payment rates

Suggested priorities

• Pressure for increased allocations from general tax to health sector• Demonstrate good use of resources and

delivery on the ground• Start developing purchasing capacity• Work out best sources of additional funding

along the way:• Dedicated taxes (income, sin, VAT ???)• Innovative financing (financial transactions,

mobile phone, etc.)

Thank youwww.heu-uct.org.za