Dr Debbie Pearmain
ALIGNING HEALTH LEGISLATION IN
PURSUIT OF UNIVERSAL COVERAGE
WHAT IS UNIVERSAL COVERAGE?
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• The goal of universal health coverage is to ensure that all
people obtain the health services they need without
suffering financial hardship when paying for them.
-WHO Oct.2012
• To achieve universal coverage, countries must advance in
at least three dimensions. They must expand priority
services, include more people and reduce out-of-pocket
payments.
-WHO
Universal Coverage
• There is no single path or magic bullet to achieve universal
health coverage: each country needs to devise its own route to
achieve this goal
• There is substantial scope to raise further domestic resources
for health care, particularly through innovative approaches to
financing.
• 20%–40% of health care expenditure is wasted; improved
health system efficiency can make a substantial contribution to
the achievement of universal health coverage.
• All countries, but particularly poorer ones, need to reduce
reliance on direct, out-of-pocket payments for health care by
increasing risk pooling and prepayment for services.
- World Health Report 2010
Progress towards universal health
SOME INTERESTING FACTS
• In Brazil, China, India, the Russian Federation and South
Africa, (BRICS) private financing accounts for 54%, 44%,
69%, 40% and 52% of total health spending, respectively⃰
• In comparison with other countries with similar income
levels, government spending on health as a proportion of
gross domestic product is relatively low in China (2.9%),
India (1.0%) and the Russian Federation (3.7%), but it is
higher in Brazil (4.3%) and South Africa (4.1%)⃰
⃰R ao, Petrosyan, Araujo and McIntyre: “Progress Towards Universal Health Coverage in
BRICS”
The South African Position
• “In South Africa costly private healthcare for the privileged few
provides for 16% of the population”
• The remaining 84% has to make do with “second rate care”
• “National Health Insurance” should be approached as “universal
health coverage”
• “Unless there is good quality in public healthcare, and unless
the costs are brought down in private health care, this whole
concept of universal health care will never find leverage in our
country”
- Motsoaledi, New Age 12-09-2013
The Medical Schemes Act
• The Prescribed Minimum Benefits Package favours a high
cost, hospicentric approach to health care
• The emphasis on severity in PMBs means that the
regulations are in direct contrast to the government’s primary
health care approach and ensures high cost curative medical
care rather than preventive health care
• The use of DTPs in the PMB regulations means that some
who are sick are arbitrarily excluded from so-called “basic
cover” by medical schemes
Medical Schemes Act
• PMBs should be service oriented not diagnosis based
• PMBs should make provision for primary health care
services and not catastrophic cover
• PMBs should be structured in such a way as to emphasise
health outcomes based on recognised health indicators
amongst medical scheme population
Medical Schemes Act
• Allows too much complexity in benefit packages. The result
is that beneficiaries do not know what they are entitled to in
terms of health care.
• Example: a benefit package was developed by the Mexican
Ministry of Health, which selected procedures on the basis of
cost-effectiveness, affordability, financial protection, opinion
of the scientific community, demand and supply, and social
acceptance - Kumar, et al ‘Pricing and Competition in Specialist Medical Services:
An Overview for South Africa’, May 2014 OECD
Medical Schemes Act
• Membership of a medical scheme is voluntary
• No provision for mandatory membership that would bring the
young and healthy into the system
• Members can resign once they have received anticipated
benefits e.g. confinement or elective surgery
• No limit on what medical schemes must pay for PMBs –
unfunded liability
National Health Act
• S3(1)(d) obliges the Minister to ensure the provision of
essential health care services which at least include primary
health care services yet there is no legislation that ensures
the provision of primary health care to beneficiaries of
medical schemes
• S4(3)(a)) recognises that every child has the right to basic
health care services but expressly excludes children under
the age of 6 who are beneficiaries of medical schemes from
free health care services at public health establishments
• S4(3)(b) excludes all persons, including children, who are
beneficiaries of medical schemes from free primary health
care services at public health establishments
National Health Act
• S4(3)(b) does require the State to provide all women with free
termination of pregnancy services – even medical scheme
beneficiaries
• S74(1) The national department must facilitate and co-ordinate
the establishment, implementation and maintenance by …the
private health sector of health information systems… No
regulations have been made. eg coding
• S90(1)(u) the processes and procedures to be implemented by
the Director-General to obtain prescribed information from
stakeholders relating to health financing, the pricing of health
services, business practices within or involving health
establishments, and health care providers, and the formats and
extent of publication of various types of information in the public
interest and for the purpose of improving access to and the
effective and efficient utilisation of health services; No
regulations have been made eg coding
Competition Law
• S3(1)(e)- Competition Act does not apply to concerted
conduct designed to achieve a non-commercial socioeconomic objective or similar purpose.
• No collective bargaining within the private sector is allowed
under the Competition Act.
• Minister of Health has not used the provisions in the NHA
s90(1)(v) to make regulations permitting the publication by
the Director-General of benchmark pricing (reference price
list)
Competition Law
• In most OECD countries the public sector tends to have some
form of price setting for specialist medical services, this is used
to purchase services from the private sector and can provide
benchmarks for private insurers as well.
• Regulation in OECD countries generally enables collective
bargaining on hospital prices. Competition policy distinguishes
between public insurers with a social purpose and private
insurers, and allows co-ordination among providers under
specific circumstances.
• Developing credible prices and large increases in public
spending have been common to OECD countries that have
used private sector facilities to expand access to hospitals in
recent years. - Kumar, et al ‘Pricing and Competition in Specialist Medical
Services: An Overview for South Africa’, May 2014 OECD
Competition Law
• One of the means by which OECD countries have sought to
address the difficult exercise of pricing medical services is
by establishing independent technical agencies. These
agencies are charged with developing a credible price
schedule which seeks to group and then order services
according to their complexity in a way that reflects a
country‘s resource costs, clinical practices and patient needs
- Kumar, et al ‘Pricing and Competition in Specialist Medical Services: An Overview for
South Africa’, May 2014 OECD
Medicines Pricing
• SEP applies only in private sector
• No regulation on how SEP is set and no official interrogation
of SEP by independent experts
• Vast differences in price between public and private sector
on medicines pricing
• Private funding sector is subsidizing public sector on
medicines?
Health Professions Council Rulings
• Medical practitioners may not be employed in the private
sector. Does not allow for the creation of HMO type
organisations by medical schemes.
• No mandatory referral system and gatekeepers within the
private sector. Patients can see a medical specialist without
first consulting a general practitioner
• Discontinuity of care means inefficient care in private health
sector
Regulatory Failure
• No independent, expert scrutiny of prices in the private
health sector
• No independent publication of information for the benefit of
the consumer, medical schemes or private health care
providers on pricing and quality issues.
• No regulatory machinery for processes for determination of
pricing by private providers
• No transparency on pricing mechanisms and levels within
private sector
• No regulatory mechanisms to address information
asymmetry
Regulatory Failure
• No attempt to address risk pooling issues eg Risk
Equalisation
• No attempt to address inefficiencies and duplication e.g.
COIDA vs RAF vs CCOD vs public sector vs medical
schemes.
• No regulation on quality measurement in private health
sector or that associates quality and price. Office of Health
Standards Compliance likely to be of small effect in private
sector.
Dr D L Pearmain
THANK YOU