Everything You Must Know About The NHI Health Financing System

Health Minister Aaron Motsoaledi announced at the commencement of the National Health Insurance (NHI) programme that it will be compulsory for all South African citizens.

The National Health Insurance (NHI) is a health financing system that is designed to pool funds to provide access to quality affordable personal health services for all South Africans based on their health needs, irrespective of their socio-economic status.

NHI is intended to ensure that the use of health services does not result in financial hardship for individuals and their families.

With the minister announcing that the NHI white paper will soon be published in the government gazette, the insurance scheme is expected to be fully operational by 2025.

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The NHI white paper is a policy document which outlines how the government will attempt to pool resources to create a quality healthcare system that services all South Africans regardless of socio-economic status.

It proposes a single, compulsory medical scheme for all, with private medical schemes being reduced to offering “complementary services”.

The paper was approved by Cabinet last week and once the law was passed, it would become mandatory for every citizen to be on the NHI.

 Break Down Of The NHI Cost

While it’s still not clear where the money will come from, the minister detailed how the over R69 billion cost for NHI will be implemented over a four year period.

He said the Treasury would come up with a system on how to cough out the huge sum, but that the funds would come from tax.

“In other words, everyone is going to contribute towards NHI. Those people who are unable to [contribute], those are the ones that the state must find a way to contribute to them, and it’s not unique to South Africa, that’s exactly what Obamacare meant.”

The NHI cost is broken as follows:

  •  R22.8 bln (R5.6 bln in the first year, R5.6 bln in the second year, R5.7 billion in the third year, and R5.7 billion in the fourth year) will be spent on pre-natal care for pregnant women — eight pre-natal checks (including two CT scans)
  • R24.6 bln (R4.8 bln in the first year, R5.8 bln in the second year, R6.8 bln in the third year and R7 bln in the fourth year) will be spent on breast cancer treatment;
  •  R4.9 bln (R987.5 mln in the first year, R1.2 bln in the second year, R1.3 bln in the third year and R1.4  bln in the fourth year) will go for cervical cancer treatment;
  • R5 bln (R658 mln in the first year, R920 mln in the second year, R1.7 bln in the third year, and R1.7 bln in the fourth year) will  be spent on school health;
  • R548.5 mln (R136.1 million in the first year, R136.7 million in the second year, R137.4 mln in the third year, and R138.1 mln in the fourth year) will go for hip and knee replacements for the elderly;
  • R934.7 mln (R318.1 mln in the first year, R198.8 mln in the second year, R198.8 mln in the third year, and RR218.8 mln in the fourth year) to be spent on cataract surgery for the elderly;
  • R5.5 bln (801.9 million in the first year, R1.2 billion in the second year, R1.6 bln in the third year, and R1.9 bln in the fourth year) will be spent on the screening, treatment and care of the mentally ill;
  • R1 bln (R42 mln in the first year, R105 mln in the second year, R262.5 mln in the third year, and R656 mln in the fourth year) to be spent on the treatment and rehabilitation of the disabled;
  • R3.6 bln (R778.7 mln in the first year, R875.2 men in the second year, R945.2 mln in the third year, and R1bln in the fourth year) to be spent on childhood cancer.
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Presently, South Africa exceeds the World Health Organisation target of spending five percent of GDP (gross domestic product) on health. Motsoaledi said South Africa spends 8.5 percent of its GDP on healthcare.

The minister, however, pointed out that the country’s outcomes were worse than other countries who spent less of their GDP on healthcare.

He also stated that it cost the private sector R24,000 to pay for one dose of Herceptin, an effective treatment for some forms of breast cancer, with 17 doses being needed. Some medical aids don’t pay for this treatment.

“Even people on medical aid and have good employment are struggling,” he said, adding that by pooling resources and buying the Herceptin in bulk would mean the drug would cost less.

The problem, according to him, was that 4.4 percent of SA’s GDP was spent by the private sector which only caters for 16 percent of the population, while the remaining 4.1 percent was spent by the public sector which services 84 percent of the population.

10 Facts To Know About NHI

When asked about how the NHI will work, Health Minister Motsoaledi said:

  • NHI represented a policy shift which would require a “massive reorganisation of the current health system, both public and private;
  • The NHI will be compulsory for all South African citizens; This means that every South African will have a right to access comprehensive healthcare services free of charge at the point of use at accredited health facilities such as clinics, hospitals and private health practitioners.
  • This will be done using an NHI card.
  • The services will be delivered closest to where people live or work.
  •  Through it, all people would have the same medical cover, regardless of their socio-economic status.
  • Its implementation will first have to be preceded by legislative amendments and the introduction of a law governing the scheme.
  • When fully implemented, all state medical aids would be made redundant, but the question of private medical aids’ future would still need to be answered.
  •  When fully implemented, the National Health Act, Mental Health Act, Occupational Diseases in Mines and Works Act, Health Professions Act, Traditional Health Practitioners Act, Allied Health Professions Act, Dental Technicians Act, Medical Schemes Act, Medicine and Related Substances Act, and the Nursing Act would all be amended and laws passed at provincial level relating to healthcare would also be targetted for amendment.
  • When implemented,  teaching hospitals will be removed out of provinces. They would be governed nationally and the face of emergency services would change.
  • Under NHI, pricing regulation would also be established to have one standard price for services while Co-payments and balanced billing would also be eliminated by January 2019.
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Several preparatory platforms would be set up in the next few months as the country moves towards the NHI implementation phase. This includes:

  1. National Tertiary Health Services Technical Implementation Committee,
  2. National Governing Body on Training and Development (to set clear guidelines on how accreditation happens),
  3. Ministerial Advisory Committee on Health Care Benefits for NHI (for the initial phase targeting women, children, the elderly and people with disabilities),
  4. Ministerial Advisory Committee on Health Technology Assessment NHI,
  5. National Health Pricing Advisory Committee (to help with regulation of prices in health care),
  6. National Advisory Committee on Consolidation of Financing Arrangements (to reduce the current fragmentation of funding in the health sector)

This is not a big bang approach. This is a journey. We need skilled people that will help us, said Matsoso.

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Rachael Gumede
Rachael Gumede
Rachael is a content developer and a huge music geek. Her natural storytelling abilities combined with her quick thinking, and critical evaluations makes her the queen of addictive stories. When she is not writing about people and events that matter, she is probably listening or dancing to some real, cool jams.
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