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2 DECEMBER 2011

SAPPF RESPONSE TO THE NHI GREEN PAPER

EXECUTIVE SUMMARY

SAPPF is an organization of private specialists representing most specialist disciplines. Its members play a vital role in providing excellent healthcare to more that 8.3 million medical scheme members and about 13 million people who access some of their services by making out of pocket payments. These specialists therefore are an essential component of the South African medical fraternity.

The need for healthcare reform and the strengthening of both the private and particularly the public sector is recognized by SAPPF. Unlike the green paper however, which portrays the private sector in a very negative light, SAPPF is of the strong opinion that an efficient private sector will facilitate and not detract from the efforts to reform the public healthcare system, which must be the focus of efforts to improve universal access to quality healthcare for all South Africans. SAPPF therefore believes that both sectors should be strengthened and reformed

1The view that the two tier system is the cause of the dysfunctional state sector and therefore the major rationale for introducing NHI and marginalizing the private sector is not accepted. Extensive and well supported data is provided to demonstrate that the private sector is not overpriced or in danger of financial collapse nor are the human resources serving the private sector depriving the public sector of resources. Private sector funding is from private money and diverting these funds to finance NHI will not materially improve the availability of public money, but will seriously jeopardize the functioning of the private sector

2The link between NHI as a financing model and the need to reform the state service is not made convincingly, as the two are completely independent and there is no compelling evidence in the Green Paper to support the view that healthcare reform is dependent on the establishment of National Health Insurance. SAPPF therefore is unable to support the establishment of a single purchaser payer NHI model as the best and most efficient model to support the needed reforms, and it is doubtful if such a sophisticated and complex system could be managed as a state sponsored facility without incurring crippling cost over-runs.

3The current tax-paying base of South Africans is not big enough to pay for such a complex and expensive restructuring of the health services, and current levels of taxation are already at very high levels that could result in negative unintended consequences for the economy should tax levels be raised. There is ample evidence to show that the dysfunctionality of the public sector is due to systemic problems within the public sector and not to insufficient fiscal resources

4There could be a constitutional challenge to the enabling Act if it is believed that the financing provisions of NHI could interfere with an individual’s right to access or association.

5The green paper overstates the distribution of human resources between the public and private sectors. Furthermore, the serious HR restraints that exist in both sectors could mitigate the establishment of the NHI as planned. Consideration should therefore be given to expanding the private sectors role in a reformed healthcare dispensation which should be allowed to become involved in training and attracting local graduates living abroad back to South Africa.

6The proposal to strengthen the primary healthcare services is welcomed as are the plans to provide specialist support in the 52 districts in South Africa and to reintroduce aschool based health service.

7Constitutional and governance issues around the establishment of the central NHI fund and its relationship and independence from the Department of Health are a cause for concern. SAPPF has similar concerns around the independence and governance of the Office for Health Standards Compliance.

8Given that the NHI service is intended to be free at the point of service it seems an unnecessary costly complication to want to maintain a separate NHI register.

9Finally a number of recommendations on private sector reform that could form part of a revised overarching reform strategy for the whole industry are included in an appendix to the SAPPF Response to NHI document.

10The white paper will need to provide much greater detail and justification than that contained in the green paper, before the single purchaser/ payer NHI model will gain wide industry acceptance and it is requested that a revised Green Paper is produced before the White Paper is drafted.

DR CHRIS ARCHER

CHIEF EXECUTIVE OFFICER

SAPPF