Towards a universal health system in South Africa: Proposals, challenges and prospects

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1 Towards a universal health system in South Africa: Proposals, challenges and prospects Di McIntyre Health Economics Unit University of Cape Town Fourth Dr AB Xuma Memorial Lecture

2 Dr AB Xuma 8 March January 1962

3 Overview What is universal coverage and why is it being promoted? Don t we already have universal coverage in South Africa? How can we achieve universal coverage in South Africa? Underlying principles Required health system changes

4 Universal coverage Delivering an entitlement for all to: Financial protection from the costs of health care Access to needed care, of sufficient quality to be effective Universal coverage is the number one global health policy goal (being discussed as the post- MDG development goal for the health sector)

5 World Health Report, 2010 The UC cube

6 Financial protection Poorest groups Either don t use health care, or do use but incur heavy cost burden: 10% of those delivering (using obstetric services) in public sector facility borrowed money (Cleary et al) 20% of those using TB and ART services in public facilities borrowed money (40% in rural areas) Middle-income groups not covered by medical schemes Pay fees at public hospitals Medical scheme members Pay substantial co-payments and have limited benefits

7 % household consump on expenditure Medical schemes 16% 14% 12% 10% 8% 6% 4% 2% 0% Poorest 20% Second poorest 20% Middle 20% Second richest 20% Richest 20% Quin les of medical scheme members McIntyre (EQUINET Discussion Paper 84, 2010)

8 Age/sex standardized concentration index Need for care in SA 0,20 0,10 0,00-0,10-0,20-0,30-0,40-0,50 Flu/ART Diabetes Trauma High BP Depression STD Drug abuse HIV Diarrhoea TB Ataguba, Akazili and McIntyre (International Journal for Equity in Health, 2011)

9 % share of benefits Use of services in SA 60% 50% 40% 30% 20% 10% 0% Public Private Public & private Poorest 20% 2nd poorest Middle 2nd richest Richest 20% Ataguba and McIntyre (Health Economics, Policy and Law, 2012)

10 Use of public services Ataguba and McIntyre (Health Economics, Policy and Law, 2012)

11 Why financing reform? Almost every stakeholder expresses support for the goal of universal coverage But, mantra: Just improve the efficiency and quality of public sector health services and it will be fine Why do we need NHI? Consensus that public sector improvements urgently needed, but this will not achieve universal coverage

12 Different UC concept Some believe it is acceptable to have very different levels of financial protection and access, as long as everyone has some Need an explicit value base: Universality all able to access same health care benefits regardless of their socio-economic status (Section 27 of SA Constitution) Social solidarity based on income (rich to poor) and risk (healthy to ill) cross-subsidies

13 Do not have UC in SA Epitome of lack of universal coverage is differences in financial resources spent on health care for different groups (2008): Medical scheme members (16% of population) = R11, 300 per person Not covered by schemes, but use private providers for some primary care services on out-of-pocket basis (16% of population) = R2,500 per person Entirely dependent on public sector for all health care (68% of population) = R1,900 per person

14 Financing functions Revenue collection: Sources of funds and contribution mechanisms Pooling: Unpredictability of illness and health care costs spread risk over greatest possible population (income and risk cross-subsidies) Purchasing: What services covered and how providers are paid (quality & efficiency) and whether purchasers are active

15 Percent of total health care expenditure Revenue source is NB 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Belgium Canada Denmark Finland France Germany Ireland Italy Japan Netherlands New Zealand Norway Portugal Spain Sweden Switzerland United Kingdom Australia Austria McIntyre (South African Medical Journal, 2012) Mandatory pre-payment Voluntary pre-payment Out-of-pocket Costa Rica Cuba Thailand South Africa USA

16 Revenue source 2010 World Health Report: It is impossible to achieve universal coverage through insurance schemes when enrolment is voluntary Voluntary health insurance > 10% of total health care expenditure in only 14 countries Only exceeds 30% in SA and USA, but 64% population coverage by voluntary health insurance in USA and only 16% in SA

17 Fragmented pools (2008) Out-ofpocket: 13% of funds Tax: 43% of funds 84% of population for inpatient & specialist care (68% PHC) (16% uninsured use private GP & pharmacy on OOP basis) Medical schemes: 44% of funds 16% of population

18 Universal system Public funds: Tax (general and additional) Whole population entitled to benefit (richest will probably have double cover) Out-ofpocket: No fees at point of service Medical schemes:? 8%-9% of population

19 Purchasing critical Need active purchasing: Identify the health care needs of the population Ensure that these services are available (identifying appropriate providers in all areas to purchase from; allocate money to where the need is) Provide appropriate incentives for efficient provision of high quality services Use purchasing power to ensure affordability and long-term sustainability of system

20 Purchasing critical Need a purchaser-provider split Will not dramatically improve provision of quality and efficient services without: Management autonomy at facility level in public sector Changing provider payment mechanisms in public and private sectors Purchase from public and private providers (draw on the human resources located in the private sector)

21 Delivery & management But, success of changes to health care financing system critically dependent on improving service delivery and management of public sector services first Can t just create entitlements, must be able to deliver on these entitlements

22 Phase 1 Improve resourcing: Facilities and equipment (audit) Drugs and other supplies Human resources PHC re-engineering: CHW program take services to people; preventive and promotive services District specialist teams reduce IMR & MMR School health services

23 Phase 1 Improve management: Competent managers Training Decision-making authority & accountability Improve quality of care: Office of Health Standards Compliance Facility improvement teams

24 Phase 2 Introduce NHI Fund: Public entity, autonomous decision-making and strong governance Main role of NHIF: Pool public funds (general tax revenue and additional dedicated taxes) Purchase services for all according to need, including changing provider payment mechanisms

25 Key issues Universal coverage: Improves financial risk protection and access to needed health care of sufficient quality to be effective, for everyone Requires more tax funding Also requires integrated pool of funds (social solidarity) and active purchasing Critically dependent on first improving quality of public sector service delivery and management

26 References Cited in presentation Cleary S, Birch S, Chimbindi N, Silal S, McIntyre D (forthcoming). Investigating the affordability of key health services in South Africa. Accepted by Social Science and Medicine McIntyre D (2010). Private sector involvement in funding and providing health services in South Africa: Implications for equity and access to health care. EQUINET Discussion Paper 84. Harare: Regional Network for Equity in Health in Southern Africa. Ataguba JE, Akazili J, McIntyre D (2011). Socioeconomic-related health inequality in South Africa: evidence from General Household Surveys. International Journal for Equity in Health 10: 48 Ataguba JE, McIntyre D (2012). Who benefits from health services in South Africa? Health Economics, Policy and Law. Doi: /S McIntyre D (2012). What healthcare financing changes are needed to reach universal coverage in South Africa. South African Medical Journal; 102(6): Related papers Ataguba JE, McIntyre D (2012). Paying for and receiving benefits from health services in South Africa: Is the health system equitable? Health Policy and Planning, 27 (Suppl 1): McIntyre D, Ataguba JE (2012). Modelling the affordability and distributional implications of future health care financing options in South Africa. Health Policy and Planning, 27 (Suppl 1): Mills A, Ataguba JE, Akazili J, Borghi J, Garshong B, Makawia S, Mtei G, Harris B, Macha J, Meheus F, McIntyre D (2012). Equity in financing and use of health care in Ghana, South Africa and Tanzania: Implications for paths to universal coverage. Lancet 380: Harris B, Goudge J, Ataguba JE, McIntyre D, Nxumalo N, Govender V, Jikwana S, Chersich M (2011). Inequities in access to health care in South Africa. Journal of Public Health Policy 31 (S1): S

27 Thank you

Health financing and NHI in South Africa: why do we need a reform?

Health financing and NHI in South Africa: why do we need a reform? John E. Ataguba, PhD Health Economics Unit School of Public Health & Family Medicine University of Cape Town 04 May 2016 Health Systems