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 Africa Economy taking a toll

Insurance brokers are losing confidence in the South African economy, according to a survey released on Tuesday.


"... the results for the first quarter of 2011 shows that brokers' confidence in the outlook for the economy has dropped to 61 percent, down from 66 percent recorded during the last quarter of 2010," CIB Insurance said in a statement on its Broker Confidence Index Survey.


The survey found brokers were continuing to lose confidence in business conditions for the local insurance industry over the next 12 months.

Confidence levels dropped to 62 percent during the first quarter in 2011, from 67 percent in the previous quarter.


Jonjon Smit, sales director of CIB Insurance Solutions, said this might indicate the South African economy was not recovering as well as people thought.


Brokers' confidence in attracting new business over the next 12 months dropped significantly to 71 percent, from 76 percent in the previous quarter.


"Insurance brokers tend to obtain new customers at the same time as consumers are purchasing items and are therefore looking to insure them.


"The drop in confidence levels in prospects for the industry and new business suggests that brokers are not expecting a significant pickup in consumer spending," said Smit.


Brokers were more confident about maintaining their current customer book in 2011, with 79 percent expressing confidence in their ability to retain existing clients, an increase of one percent since the last quarter.


Brokers said their biggest problem in the next 12 months would be complying with new legislation and regulations. Their main concern was probably the Financial Services Board regulatory exams, Smit said.


"All key individuals and representatives need to complete the first level of the exam, which will cover general compliance, by December 2011. This looming deadline is causing some uncertainty amongst brokers."
Source -http://iAfrica.com
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Raising South African taxes for NHI - not good

Raising taxes to pay for NHI ‘premature’

Before the government considers raising taxes to pay for national health insurance (NHI), it should meet its own promise to allocate 15% of its budget to health.

CAPE TOWN — Before the government considers raising taxes to pay for national health insurance (NHI), it should meet its own promise to allocate 15% of its budget to health in line with the Abuja target, according to University of Cape Town health economist Prof Di McIntyre.

The government also needed to improve public health facilities and win the trust of the public before increasing the tax burden, she said ahead of today’s publication of a European Union- funded study on the financial implications of alternative scenarios for health sector reform.

The study concludes that an NHI-style model was the most affordable.

“I don’t believe people should be asked to pay the tax until they see tangible benefits,” said Prof McIntyre, who is also a member of the ministerial advisory committee on the NHI, set up by Health Minister Aaron Motsoaledi last year.

The Abuja target was set by African heads of state in 2001 and reaffirmed this year in August in Kampala. SA still has a considerable way to go to meet this goal, as health got just 11,5% (R104bn) of the R907bn budget for the 2011- 12 fiscal year .

Prof McIntyre’s comments follow the release last month by the African National Congress (ANC) of a discussion paper on NHI, and add to the debate about health sector reform.

The ANC is proposing the introduction of a central fund to pay for public health services, financed by increased government spending of up to 14,5% of the national budget, a mandatory NHI contribution of up to 8% (split between worker and employer), and possibly increasing value added tax. The party is proposing to phase in NHI over 14 years, starting in 2012, and projects costs will rise from R128bn to R376bn by 2025.

The Strategies for Equity in Less Developed Countries study examined health inequalities in Ghana, SA and Tanzania and investigated how these gaps could be closed by reforms.

In the South African component, Prof McIntyre and her team modelled the costs of phasing in three different scenarios over 15 years: leaving the status quo unchanged (with about 16% of the population belonging to medical schemes), introducing mandatory medical scheme membership for everyone in formal employment, and an NHI-style “universal coverage” model which would have more people relying on state- funded healthcare.

It concluded that the most affordable option for SA would be the “universal coverage” model.

This would require public spending on health of between 5% and 24% of gross domestic product (GDP) by 2025, with the “best guess” being 6,4%, said Prof McIntyre. The wide cost variation was largely due to different estimates of the unit costs of services. If the “best guess” scenario was introduced today it would cost R196bn (with R102bn coming from the public purse) and rise to R394bn (with R295bn from public funds) by 2025 in current terms. In this scenario, administration costs would be tightly controlled, and unit costs for services would be lower than current private sector rates.

Under this scenario, medical schemes would continue to exist but with a smaller membership base, and so they would account for spending equivalent to 2,2% of GDP by 2025. About 40% of medical scheme members would be likely to drop out. About 8% of SA’s GDP is spent on health at present, said Prof McIntyre.

The range of services offered by the state under this scenario would have to be limited, she said. “There is going to be rationing,” she said, implying that those who could afford to would continue to buy from the private sector the services not provided by the state. “There is rationing in the (UK) National Health Service, there is rationing everywhere.”

Source - Businessday.co.za

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Metropolitan and Momentum merger potential job losses reviewed

Tribunal raps insurers over job losses

The Competition Tribunal rebuked insurance giants Metropolitan and Momentum for a lack of clarity over potential job losses resulting from the proposed merger between the two.

THE Competition Tribunal yesterday rebuked insurance giants Metropolitan and Momentum for a lack of clarity over potential job losses resulting from the proposed merger between the two, leading to a lengthy discussion that lasted most of the day.

The hearing, which was initially expected to run from 10am to 1pm, dragged on for about six hours as the tribunal searched for clarity on the exact details of the proposed job cuts. The tribunal criticised the two companies, who plan to merge into JSE-listed MMI, for the lack of clarity in their documentation detailing their proposed merger. A merger would create a company with an embedded value of R30bn.

“What does it mean that the parties will investigate opportunities for supporting the employees? What does this mean and can you enforce it? What’s the likelihood of reskilled people getting employment?” tribunal chairman Norman Manoim asked.

While the deal has received shareholder approval, there has been opposition from the National Education and Allied Health Workers Union (Nehawu). Last week the union said it feared the loss of more than 1000 jobs as a result of the deal. 

The exact number of potential job losses was a major point of contention at the hearing in Pretoria. During the six hours of discussions, the exact number of potential job losses at the two companies changed, falling from 1000 to between 300 and 500 based on the companies’ detailing of alleviation measures.

The tribunal had requested that conditions be placed on mitigating the effect of these job losses. These would be along the lines of training workers that were unskilled or semiskilled, for employment elsewhere.

When the tribunal asked Momentum CEO Nicolaas Kruger, who was representing both companies, why his group had failed to describe an accurate number of potential jobs lost, he replied it had come from “estimates”. This was partly because it was difficult to ascertain the exact magnitude of cost cutting that the companies would have to undergo. He said part of the reason for the estimations, particularly on the effects on staff, was the parties needed to avoid colluding before they had become one entity.

The tribunal also asked Mr Kruger if he had done any study into the social effect of retrenchments on workers’ families, bearing in mind that South Africans were highly indebted , and the economy was “not creating any jobs”. Mr Kruger said no such research had been done but if the merger went ahead, MMI would work to ensure that retrenchments would be capped at 1000 over next year and 2012.

He said just more than R5m would be available for the training of unskilled and semiskilled employees who lost their jobs through any merger.

Nehawu advocate David Unterhalter said if the merger was to take place, MMI had to weigh the new levels of efficiency it would achieve against whether or not job losses could be justified. Mr Unterhalter wanted clear details of how the job losses would be mitigated. “The endeavours which will be made to assist those who lose jobs are too vague and uncertain,” he said.

The companies expect the merger to save them as much as R750m. The hearing was adjourned until today at 9am

Source - Bussinessday.co.za

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Douglas Ramaphosa assisting NHI plan success

DOUGLAS RAMAPHOSA: Working together to make the NHI succeed

THE African National Congress (ANC) has announced plans to take its National Health Insurance (NHI) scheme forward and has given us a hint of what the health industry will look like from 2012.

THE African National Congress (ANC) has announced plans to take its National Health Insurance (NHI) scheme forward and has given us a hint of what the health industry will look like from 2012. Responses to the scheme range from guarded optimism to outright rejection.

In the spirit of Lead SA (pioneered by Radio 702,) and the ANC’s Batho Pele (People First) campaign, we have a responsibility to make the plan work, identify areas of concern and put workable proposals on the table.

Whether we like it or not, there will be an NHI in one form or an other. Now that we know the ANC’s intentions, we need to prepare proposals and engage with each other as businesses serving the healthcare sector and take our joint considered views to the ministerial task team for consideration. The ANC has committed itself to wide-ranging engagement and consultation on the issue.

One of the areas the ANC will focus on is the improvement and expansion of public healthcare infrastructure and services. This area, according to the ANC, is critical to realising the principle of universal access to quality care and reducing inequality of access. The quality of service, efficiencies, information technology (IT) infrastructure, project management and processes in a number of public healthcare facilities leave a lot to be desired.

The private healthcare sector has, over the years, invested a lot of resources and deployed world-class expertise in perfecting their systems and processes in a number of privately run clinics and hospitals. The government would be remiss not to enlist such expertise.

SA’s private health sector has arguably the best developed IT and administration systems, skills and capabilities in the world, and a successful track record. This includes the management of doctors’ debtor systems, electronic switching, price- file updates and the integration of the World Health Organisation’s International Statistical Classification of Diseases and Related Health Problems into doctors’ work routines, and so on. There is no need for the NHI to reinvent the wheel.

If it is true that we may see some medical scheme members opt out and rely on state services (Prof Di McIntyre of the University of Cape Town predicts as many as 40%), then the current patient-management administration systems in public medical facilities will not cope with the volumes.

Apart from just refurbishing or building new clinics and hospitals, the expertise of the private healthcare industry will have to be enlisted by the government to ensure these are world- class public facilities and the IT support infrastructure required to operate these effectively is in place. Not only will the management and administration of the new generation of public hospitals require this infrastructure, but the medical staff will need to use secure and proven technology to transfer patient records within and beyond hospitals, as well as clinical data and images, among other records.

It is in the interests of the private sector that public facilities are improved so that there are minimal adverse effects on productivity in the workplace. A number of employees, who currently belong to medical schemes and will in future also belong to the NHI and will be contributing towards it, will certainly visit public facilities to get their money’s worth. If the systems and processes are not improved in such places, this will elongate the already long queues and result in repeat visits, which will affect the ability to provide universal access to affordable, quality healthcare — the main aim of the NHI.

From a private sector point of view, the government will have to establish workable public-private partnerships.

It will be prudent to establish a few facilities run by public-private partnerships as pilot projects before attempting a huge roll-out.

Pilot facilities will give the government time to refine processes and systems and learn from mistakes. Believe me, there will be mistakes.

We are in this together and once there is better clarity on a number of issues, we should all get down to establishing one of the best public healthcare systems in the world, one that we can be proud of.

- Ramaphosa is CEO of Bytes Healthcare Solutions.

Source - Businessday.co.za

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