Mediclinic's Position on the NHI Bill Released on 8 August 2019

Mediclinic fully supports the principle of Universal Health Coverage (UHC) and improving access and affordability of healthcare to all South Africans. Mediclinic will continue to contribute constructively towards the achievement of these goal

Key Features of the Bill

The NHI Bill is the first piece of enabling legislation for the establishment of the National Health Insurance Fund (‘Fund’). The NHI Fund will be implemented in two phases over a 9-year period and will function as the single purchaser and single payer of healthcare services in South Africa.

Financing of the Fund will require a mandatory prepayment, funded through various possible sources including general taxes, reallocation of medical scheme tax credits towards the NHI Fund, a payroll tax and a surcharge on personal income tax. Revenue will be appropriated annually by Parliament. The Fund will use the pooled resources to purchase healthcare services on behalf of the population from contracted and accredited public and private healthcare providers. The reimbursement mechanisms for contracting with providers range from case-based fees for emergency medical services, capitation models for primary care or general practitioner services, and all-inclusive (e.g. DRG or bundled) payments for specialist and in-hospital services.

Eligible individuals will register as users of the Fund at accredited health establishments. Registered patients will make use of the Fund’s accredited providers and will access services by

conforming to referral pathways and formularies, with primary healthcare providers providing the entry point to the system.

Deviation from a referral pathway or formulary will preclude eligibility for coverage from the Fund. The use of services outside of the Fund’s healthcare services benefits and referral pathways can however be funded by means of out of pocket payments, through medical schemes or other voluntary private health insurance. The Bill allows for medical schemes to offer complementary cover for services not reimbursable by the Fund once the NHI has been fully implemented.

The first phase of the implementation of the NHI is from 2017 to 2022. Objectives include establishing the structures of the Fund, developing the process for accreditation and ensuring that the relevant supporting legislation is developed and amended where necessary. The Fund will also purchase healthcare services for vulnerable groups, predominantly focusing on primary healthcare services and addressing critical backlogs. During the second phase, from 2022 to 2026, the Fund will be established and operationalised. Purchasing of healthcare services will be achieved through a mandatory prepayment system. In this phase, the Fund will contract primarily with public sector providers and selectively with private sector providers.

The Fund will be governed by a Board appointed by the Minister of Health. The Minister will also establish a Benefits Advisory Committee to develop the healthcare service benefits that will be reimbursed by the Fund, and a Health Care Benefits Pricing Committee to recommend pricing of those benefits to the Fund. Four interim committees will also be established during Phase 1 of the NHI implementation, including the National Tertiary Health Services Committee, the National Governing Body on Training and Development, the Ministerial Advisory Committee on Health Care Benefits (a precursor to the Benefits Advisory Committee), and the Ministerial Advisory Committee on Health Technology Assessment. Mediclinic anticipates that these committees will be critical in determining the details of the system and would welcome the opportunity to participate in developing these important functions.

Key Considerations

The release of the NHI Bill is a step in a process through which greater clarity and certainty will be achieved. As is clear from recent media coverage and commentary there are various interpretations and levels of certainty regarding the NHI Bill and its implications. These range from legislative and constitutional aspects, the financial feasibility of the system, and various stakeholder roles and responsibilities. Mediclinic will continue to collaborate and contribute in this process towards attaining greater clarity and certainty.

While the NHI Bill provides the framework for the establishment and functioning of the Fund, the practical details and implications of the NHI system are dependent on the manner of implementation. Implementation will also require changes to a range of existing pieces of legislation as outlined in the NHI Bill. These aspects of implementation will be critical in delineating the role of private medical schemes and private providers.

The complementary role of medical schemes is outlined in section 33 of the NHI Bill, allowing cover for services not reimbursable by the Fund. According to section 6, individuals have the right to purchase healthcare services that are not covered by the Fund through a complementary voluntary medical insurance scheme. Section 8 allows for a user who fails to comply with referral pathways or seeks treatment outside of the formulary to pay for those services through voluntary medical insurance schemes or out of pocket. These sections, read together, could allow for the interpretation that an individual could insure themselves privately for any services should they choose to follow alternative care pathways not covered by the Fund. Clarity regarding the role of medical schemes will therefore depend on the package of healthcare service benefits reimbursed by the Fund and the practical application of referral pathways. Mediclinic believes that subsequent to an NHI contribution, individuals should retain their existing choice to purchase private medical scheme membership and selection of healthcare service provider.

Under the envisaged healthcare system, private providers would be able to contract with medical schemes offering complementary coverage. There is however some ambiguity regarding the scope of contracting for private provider services with the NHI Fund and, consequently, with medical schemes. For example, purchasing primary healthcare services from private sector providers clearly forms a crucial part of the NHI Fund’s objectives during Phase 1. The opportunities for contracting for higher levels of care from the private sector, while allowed for, are not as clear. Mediclinic looks forward to opportunities to participate in forums where these aspects will be discussed and developed.

The key consequence of the creation of the Fund will be the capacity for the purchasing of health care services from both public and private providers. Mediclinic supports this proposal and believes that a transparent, scientific framework for strategic purchasing will aid in strengthening accountability and enhancing access within the healthcare system.

The NHI Bill will now be discussed and debated within the various forums of the legislative process before it is enacted. Mediclinic will continue to actively engage in the development of the NHI to gain clarity and ensure that sustainable solutions are put forward that leverage private sector providers and funders to achieve the objectives of UHC.

Mediclinic believes that an enhanced healthcare system can be achieved through greater collaboration across the public and private sectors to find common solutions and looks forward to the opportunity to contribute in this regard.