National health insurance not practical – study

2010-04-29 16:38

The National Health Insurance Scheme (NHIS) proposed by government

may cost up to R216 billion, a study done by the economic research consultancy

Econex showed.

Dr Nicola Theron, director of Econex, presented the findings at the

Hospital Association of SA’s (Hasa) annual conference currently under way at Sun


“Econex’s preferred scenario for the envisaged cost of funding an

NHIS ultimately showed a total cost of R216 billion,” said Theron.

“Even if the most economical model were to be applied, the figure

would still equate to a total of R197 billion; a number close to South Africa’s

entire personal income tax contributions.”

She said South Africa would not be able to afford this.

Theron said the NHIS endorsed universal coverage at no cost with a

free choice of provider. She said the demand on the medical system would heavily

outweigh the resources available.

“We found that in the face of potentially unlimited demand, we

would need an additional 10 000 general practitioners and between 7 000 and 17

000 specialists relative to what we currently have,” she said.

Theron said higher income households had a preference for accessing

the private health sector. She said South Africa had a “pent-up demand” for

health services.

“If everyone is covered and there is no income constraint, the

health care behaviour of the entire population would mimic that of the richest

income group.”

Econex’s research showed that an NHIS would result in a potential

increase of four to 9.2 percent in respect of hospital visits, with declining

public sector usage.

“Specialist visits would increase from 2.6 percent to 3.9 percent

while GP visits would show a dramatic potential rise from 28.3 percent to 61.8


The research was commissioned with the intent of contributing

constructively to the debate around NHIS and not to put forward exorbitant

figures that suggested an NHIS was impractical, said Theron.

Dr Norman Mabasa, chairman of the SA Medical Association (Sama) and

a member of the NHI Ministerial Advisory Committee, said there needed to be a

move away from an “obsessive focus on NHIS costs and timelines”.

“It’s the details and not timelines that should drive the pace,” he


Mabasa said practical solutions should be sought to make the NHIS


“Twenty three pieces of legislation would need to be amended before

the implementation of an NHIS,” he said.

Tony Twine, senior economist and director of Econometrix, suggested

that even an additional five percent of gross domestic product added to existing

government health care spend would render a NHIS very expensive.

“NHI is doable ­– we just can’t do everything in a day. A

progressive phased introduction will allow resources to be deployed

economically,” he said.

“Free choice of provider may not be feasible.”

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