Working towards national health

With the implementation of South Africa’s National Health Insurance still a long way off, SHEQ MANAGEMENT explores the current obligations of local industry in its endeavour to look after employees.

In August 2011 it was announced that the South African government would institute a National Health Insurance (NHI) scheme to improve access to quality healthcare services for all South Africans. Services would be procured on behalf of the entire population and the single fund would allow equity and social solidarity to be achieved. In doing this, the under-resourced and strained public health sector would also be strengthened.

Eleven pilot sites were chosen for the testing of new systems and capacities, which, according to a report published in the Mail & Guardian in December 2013, is seemingly returning mixed results. The South African Medical Journal does report, though, that work is progressing on the transformation of infrastructure and human resources, resource management and administration.  

This first phase of the scheme – piloting and strengthening the health system – is set to end in 2014 with the establishment of the NHI Fund. Between 2016 and 2025 the second and third phases are scheduled to come into play before the scheme is then introduced in totality.

So far, the scheme has come in for some criticism, notably by Dr Chris Archer, CEO of the South African Private Practitioners’ Forum, whose comment was published in the Mail & Guardian of February 7 and 14.

Archer’s concerns centred on the approach to achieving the goals set out for the NHI, saying that South Africa’s budgetary and human resource constraints will be stumbling blocks. However, of greater concern, notes Archer, is the lack of concern for private healthcare.

He estimates that the state would spend R4 500 per person, per year under the NHI, while it currently spends about R3 000. This means taxpayers, who already have private medical aid, would receive about a third of their previous value, whereas state patients will be marginally better off by about R1?500 per person per year.

“By international standards, the cost of South African private care, at R12 000 [per person per year], is relatively inexpensive when compared with what is spent in the United States, the United Kingdom and Australia. Reducing the available private-sector spend by two-thirds means that many treatments and drugs, currently available in the private sector, will either not be available at all, or only after long waiting periods (hip and knee replacements or lens implants are a few examples), as severe rationing of care and a severely trimmed benefit package will be the only way of staying within budget,” he notes in his assessment of the financial aspect of the scheme.

(The NHI is not intended to replace any private schemes and, while membership to the NHI will be “mandatory for all South Africans”, anyone may still voluntarily join a private scheme. In its 2013 report entitled: Use of health facilities and levels of selected health conditions in South Africa: Findings from the General Household Survey, 2011, Statistics South Africa reports that a total of 8 057 559 individuals were covered by medical aid, representing 16 percent of the total population in 2011.)

The NHI notes a socioeconomic benefit of the scheme being “a healthier workforce at a lower cost in the long term, which increases employment and attracts foreign direct investment”.

Currently, there is no obligation on the part of the employer to provide medical aid for its employees. Solidarity Legal Services, the legal department for trade union Solidarity, says that employers might be required to provide medical aid benefits in terms of sectoral determinations and collective agreements, but, in general, these schemes (like pension funds) are benefits that do not form part of the employee’s remuneration.

“Offering such benefits is at the discretion of the employer, who can also decide what percentage to contribute. It could, however, form part of an employee’s cost-to-company package. The employer and employee can also contractually negotiate for the pension fund and medical aid benefits to form part of the employee’s remuneration,”
it notes.

However, an employee can be compelled to join a specific medical aid scheme (or pension fund) in terms of the conditions of employment in his/her service contract. Generally, though, an employer does not have to provide such benefits, in which case the employee will have to make provision.

While an overall lack of compliance is often singled out for the high rate of occupational injuries in South Africa, the facility for adequate treatment – currently more the preserve of those with the resources to access private medical schemes – should be greatly enhanced with the introduction of the NHI. Here’s hoping that the early concerns around its successful implementation are appropriately ironed out.