Private health-care needs to grow

2017-06-27 06:00

AFFORDABLE and quality health care is critically important to fight unemployment and poverty, and achieve radical economic transformation.

The Free Market Foundation (FMF) has always championed responsible health-care policy and opposes the proposed National Health Insurance (NHI) scheme as dangerous and unnecessary. Good intentions are insufficient to bring about prosperity.

The NHI will have the unintended consequence of destroying SA’s internationally acclaimed private health-care industry. Individuals spend substantial amounts of their money on their medical needs.
Poor citizens often lack access to health care completely or need to spend well over half of their income on it.

Therefore it is important that the government does not exacerbate the cost of health care and allows a competitive health-care provider market to keep prices as low as possible.

There is nothing radical about NHI. The apartheid government was infamous for its regulation and control of health care, using the supposed justification of extending medical care to the poor to build Baragwanath Hospital in Soweto. Yet government involvement in health care did not benefit the majority of South Africans, and this continues.

The government should not be in the business of providing health care to all South Africans. Instead, it should devote its limited health budget to the supply of services to the poor.

It can do this by purchasing a greater percentage of those services from private providers and encouraging the rapid growth of the private health-care sector, and so enabling it to provide services to a larger percentage of the population.

It is a worldwide problem whereby medicine regulators want to approve new drugs quicker while ensuring they are safe for use. In SA, getting innovative medicines approved for local use is a particularly tedious process. This is a disincentive to local pharmaceutical entrepreneurs to engage in substantive research for new medicines.

FMF director Jasson Urbach said: “There is a simple policy that, if adopted, will improve South African patients’ access to the world’s most innovative new medicines and vaccines, and allow us to climb the developmental ladder rapidly. South Africa’s medicine regulator should identify a handful of reference regulatory agencies that it deems competent throughout the world, an example is the U.S. Food and Drug Administration.”

When those reference authorities approve a new or generic drug, that drug must be deemed approved in SA.

Considering South Africa’s relatively small tax base, limited available revenue pool and chronic levels of unemployment, as well as the shortage of skilled health-care personnel, the NHI scheme is inappropriate.
Far from marginalising medical schemes, the government should be promoting their proliferation because regular, small, fixed payments to a medical scheme make sense as opposed to the rare but devastatingly high out-of-pocket payments required when illness strikes.

South Africa is in a desperate struggle to improve access to quality health care.

The NHI scheme and the continued bureaucratisation of medicine approval are dangerous in our economic and social climate.

Policy makers should rather seek out ways to increase competition in the market and remove the barriers that constrain efficient functioning of the market.
- Free Market Foundation

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