Moody’s rating agency, in their statement “Moody’s places South Africa’s Baa2 ratings on review for downgrade” carried on their website they cite, amongst numerous other factors that they will look at to determine whether to downgrade South Africa’s rating or not, expensive schemes like the nuclear build program and the proposed National Health Insurance Scheme (NHI). Here is exactly what they say: “The ratings agency will explore the implications of expensive schemes, such as nuclear energy and National Health Insurance, for the government’s finances in an environment of rising interest rates.”
The latest White Paper on the NHI doesn’t make an effort to quantify the costs involved in any form of roll-out of the NHI. It is very likely to be an incremental spend over many years and not like the big bolus expenditure likely to be involved in the posited nuclear build program. None-the-less, it is likely to be expensive. And Moody’s looking at it in the way outlined, suggests that they think it is more expensive than we can afford. It is hard to say, when there has been no costing exercise for the NHI from the Government’s side, but any meaningful improvement in health service delivery along the lines of the NHI is likely to be way beyond South Africa’s means.
The progress in implementing the NHI is likely to be slower than hoped for by Government, and the yields in terms of healthcare delivery are likely to be quite substantially smaller than Government (and all of us) hope. This means that we are stuck with the current systems for the foreseeable future. There is work happening to improve health care delivery in the public sector. This work is crucial as we move towards the universal coverage promised by the NHI.
But, what of the private sector? Despite some recent stuttering proposed tweaks in regulations and legislation, there is a sense in which the private sector is being left to wallow in an inadequate legislative and regulatory framework pending the advent of the NHI. Amongst the numerous problems in the private health care environment is the framework and implementation of the Prescribed Minimum Benefits (PMBs). I’ve previously argued that the PMBs may be unconstitutional.
At the Competition Commission’s Health Market Inquiry there has been oral evidence led regarding the devastating financial impact on individuals and families who have a PMB condition but, for various reasons, their medical scheme has failed to pay or dodged payment for years. People do not know if their condition is a PMB or not, and they certainly struggle to navigate the barriers that their scheme erects to try and evade paying for PMBs, or a range of other cost cutting measures.
Patients don’t encounter the health services with a neatly diagnosed condition. Often significant expenditure is run up before a diagnosis is made, and a decision can be made as to whether that episode of care will be covered by the scheme or not.
Would it not be simpler, fairer, easier to administer, easier to price, and easier to understand by members and patients, if the PMBs were defined as an explicit list of services to which a member is entitled, rather than a list of diagnoses? The services could be tiered and assured in different ways. For example, specialist care could only be covered if documentary evidence of referral from General Practitioner accompanied the claim for specialist services. There would be no doubt in any person’s mind as to what is covered and what is not. The wiggle room for schemes to dodge paying claims would be diminished, but they would still have the ability to contain runaway costs by ensuring proper and controlled access to different levels of care.
While we embark on the long, slow, and expensive process of moving towards universal cover, the private sector needs significant regulatory reform to keep it viable. PMB regulation is one area in urgent need of reform.
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