Department of Health on NHI issues in SA

Cape Town - The Department of Health has embarked on a massive audit of clinics and hospitals in preparation for the implementation of the National Health Insurance (NHI), the Minister of Health Aaron Motsoaledi said today.

Briefing media in Parliament on Thursday, Motsoaledi said so far the audit, which looks at cleanliness, safety and security, drug stock count, long queues, infection control and the attitude of staff at clinics, had addressed 3 336 of the department's 4 200 health facilities.

The attitude of staff and cleanliness were two of the biggest problems, he said, adding that the department this week had trained a team of 40 health experts to prepare them to provide assistance in improving health facilities.

Motsoaledi said the department would start with four districts and 214 facilities in KwaZulu-Natal, Gauteng, the Free State and the Northern Cape. These districts are: Zululand (KwaZulu-Natal), Sedibeng (Gauteng), Motheo Free State), and Pixley ka Seme (Northern Cape).

He said his department was also refurbishing nursing colleges and homes to increase the capacity of these colleges to produce more nurses.

In all, 122 colleges had been targeted and 49 colleges were already being refurbished.

Motsoaledi said his department was still tackling the problems of the Gauteng Provincial Health Department, particularly in its non-payment of service providers.

He said he had held conversations with the Minister of Finance Pravin Gordhan to ensure that provincial health departments had to fulfil certain non-negotiables when allocated funding from the Budget.

This could be for example to ensure that provincial health department's set aside allocations for such areas as immunisations of key infections, he said.

Turning to HIV and Aids, he said the mother-to child infection rate for HIV and Aids had dropped from 8 percent in 2008 to 3.5% last year, for children born to mothers infected with HIV.

This had helped to save 30 000 babies per year - most of these in KwaZulu-Natal, he said.

He also called on South Africans to get tested for HIV and Aids at least once a year.

The department would also be tackling non-communicable diseases, such as alcohol and tobacco abuse.

He said South African government's regulations against smoking had already resulted in a sharp drop in smoking over the last few years.

"We have to deal with the scourge of alcohol advertising where this is projected as product bringing success," said Motsoaledi, who pointed that adverts often depicted images of success and a depiction that drinking was "cool" for young people.

A more difficult issue, he confided, was how to get South Africans to exercise more and to mind their weight. -

Source : buanews.gov.za
Tags : HIV, Aids,health insurance , insurance South Africa,national health insurance,NHI, insurance news, gr8insurance

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National health insurance funding debacle

After the South African Government released its long expected Policy Paper on National Health Insurance (Policy Paper) (NHI) funding on 11 August 2011, quite a few questions remained unanswered.


According to the Policy Paper, Government planned for an additional R145 billion funding requirement in real 2010 prices for the roll-out of NHI over the next 14 years. 

The expectation is that these additional funds will be sourced through increased tax revenues. An additional R15 billion is needed over and above the Medium Term Expenditure Framework (MTEF) estimated health budget for the implementation of NHI in the 2012/13 financial year. 


This represents an increase of 14% in the MTEF budget estimate and will bring the health budget from the original estimate of R110 billion to R125 billion in the 2012/13 financial year. Over the entire roll-out period, the estimate equates to an average of R10.4 billion in additional funding in real 2010 prices being required every year. 


Some of the funding mechanisms currently being discussed include a potential increase in the VAT rate, a surcharge on individuals' taxable income and the phasing in of a payroll tax (payable by the employee). 


When governments consider increasing tax rates to fund a new policy decision, it is not a straightforward decision. Factors such as equity, efficiency, flexibility, ease of administration and collection and potential revenue should be taken into account. 


Questions around equity will centre on whether or not the tax promotes an equitable or fair distribution of income. This would typically speak to the regressive or progressive nature of taxes. The debate round VAT, and those opposed to it, is that it is regressive in nature, meaning it affects the poor relatively more than the rich. 


On the other hand, proponents of VAT as a source of funding feels the tax base is broadened and that everybody can contribute. By zero-rating certain necessary items, the regressive nature of VAT is also reduced and it is relatively cheap and easy to administer if compared to income tax. 


Due to the broader nature of the tax base, research conducted by KPMG on the nature of a tax increase to fund NHI through VAT or through personal income tax, also indicated that increasing VAT might have a slightly less distorted nature. However, due to the socio-economic make-up of South Africa, changes in the VAT rate can and should be carefully considered. 


There is another, less common alternative. Many people believe that increasing the tax on cigarettes and alcohol could and would discourage harmful behaviour and, in turn, improve the population's health. From that perspective, it makes sense to use sin taxes as a potential source of funding for public health policy initiatives. In addition, sin taxes also serve as a source of revenue and are considered by some analysts to have less distortionary effects than other types of taxes. 


On the downside, research indicates that sin taxes might be regressive in nature and if the consumption of taxed products actually reduces on the back of the introduction of sin taxes, it might have a negative impact on the estimated revenue. Increasing sin taxes, on the face of it a potentially reasonable alternative, might therefore have other, unintended consequences that the Fiscus might like to avoid. 


Finally, it is important to consider that tax revenue in South Africa goes into one pool and are normally not ring fenced. The policy stance is unlikely to change with the introduction of NHI. Therefore, no matter the tax revenue source considered, the funds will be paid from the same pool of tax revenue. 


The question remains - who will contribute and how much? 


* Lullu Krugel is an Associate Director and Senior Economist at KPMG 

Source : businesslive.co.za
Tags : health insurance , insurance South Africa,national health insurance,NHI, insurance news, gr8insurance

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South African insurance market changes

PRETORIA – The big-four players in short-term insurance face fierce competition and are even losing some market share from the smaller direct writers such as Outsurance and Auto & General.

According to a report by the ratings agency Fitch these direct writers have increased their market shares, particularly in personal lines, at the expense of the larger companies.

"The increasing competition has put pressure on the larger non-life insurers' profitability. Fitch expects earnings to remain under pressure in the near term," the report reads.

Nicole Gibb, associate director in Fitch's insurance team in South Africa, said in an interview that the bigger players are adapting and have created their own direct distribution lines in place to win back market share.
"It will take some time to see if they can get back their market share," she said.

The fierce competition in the sector is a good thing as the four-big players still dominate the market with a combined market share of roughly 50%.

Santam is the leading short-term insurer with a market share of more than 22%. Second is Mutual & Federal with 11%, followed by Hollard with 9% and Zurich South Africa with 8%.
Outsurance has already increased its market share to 6%, while Auto & General is currently on 5%.
According to the report, direct sales now represent nearly 20% of the personal lines market, a market that was historically served by intermediaries.

Gibb says that Fitch maintains a cautious outlook regarding credit ratings for the short-term sector, as well as life insurers, in South Africa.

She adds that ratings are likely to stay constant if conditions remain as they are.
"If there would be an improvement in performance it would only be a slight improvement," says Gibb, highlighting the volatile investment markets and continued pressure on consumers' disposable income as constraining factors.

Gibbs also says that South Africa has been more sheltered than the rest of the world against the economic downturn. "South Africa obviously has been impacted and I do think a serious fall-out will filter down, but not on the same scale as for the rest of the world."
Ratings actions are important for life and short-term insurers as higher ratings help these companies to issue debt more cheaply.

The insurers actually approach the ratings agency to obtain a credit rating.
"Within the insurance market ratings also demonstrate the security and strength of an insurer to its policyholders and can be a bit of a selling point for them," David Prowse, senior director at Fitch's UK team, said.

As far as growth opportunities go, Africa remains a possible market for both life and short-term insurers, Gibb said.

"The South African market is quite saturated for life-insurance products and the big players have been expanding into Africa. A very cautious approach is being taken when moving into these markets that are still relatively untapped," Gibb said.

Expansion into Africa as a diversification strategy would initially be seen as a credit negative due to the risk involved with moving into new markets, Prowse said.
"Once the company has successfully diversified it becomes a credit positive as the risks are then spread more geographically,"

Source : moneyweb.co.za
Tags : insurance market South Africa,direct marketing, insurance news, gr8insurance

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