Health Insurance

Health insurance is complicated – simplicity won’t do

Minister Aaron Motsoaledi

(Photo: The Intelligence Bulletin)

South Africa’s present national health care is not sustainable, but Minister Aaron Motsoaledi’s approach does not sufficiently deal with the complexities of the issue.

As minister of health Dr Motsoaledi, is doing a good job at national level with limited available resources. His task to develop and implement the very necessary National Health Insurance Policy (NHSP) is a mammoth task.

In an opinion piece on 16 July in The Sunday Times, (“Apartheid built healthcare inequalities. It is up to NHI to dismantle them”), Dr Motsoaledi makes several important, and relevant points.

Not only is the present system unsustainable, is also true that health care is a contested terrain not only in South Africa – the Trump administration’s attempts to recall Obamacare, but one example.

However, Motsoaledi’s description of this problematical matter, as “two contesting forces – one fighting for change, and the other for the status quo” is, in my opinion, the wrong approach to a very complex problem.

I’m sure he understands exactly how complex it really is. Unfortunately, putting forward a binary way of thinking, he does not help us to further understand the complexity. He argues that there is a bad side (private medicine) and a good side (NHI).

Then, even more confusingly, he claims it is a “myth that NHI wants to do away with the private healthcare system.”

Underlying anger

I detect underlying anger, like a boxer punching in all directions without a plan.

Certainly, the health system, like all systems in our country, has roots in Apartheid – he is rightfully angry about that. However, worldwide countries struggle with the complexity of balancing private and national health systems.

It’s an oversimplification to consider criticism necessarily as ideological opposition to the NHI – especially if he means others are opposed to equity in healthcare provision. Since the NHIP document was published in June 2017, many have accepted it as a reality.

It is not clear why the minister is so defensive, since existing inequality can be found at more levels than the two categories he names – those belonging to medical aids and those relying on state resources.

The minister claims: “With medical aid, huge amounts were siphoned from the public purse through huge medical-aid subsidies camouflaged as a condition of employment. It was also achieved through very generous tax rebates and credits directed at the few South Africans who were able to join a medical aid”.

The first half of this statement requires an explanation, since the state is one of the few sectors which consistently subsidises medical-aid benefits. Also, the words “siphoned from,” sounds like an accusation of theft (from the public purse).

Firstly, according to the SARS webpage, “This MTC [Medical Tax Credit] seeks to bring about greater fairness and help achieve greater equality in the treatment of medical expenses across all income groups.”

What this means, is that the higher your income, the less tax credit you receive.

Secondly, not all contributions and health expenses are tax deductible. Members of medical aids pay many medical expenses out of their own pockets that are not tax deductible.

A medical aid member can claim back R286 a month of his/her contribution. In short: a great amount of the money in the private health industry is privately funded – not the state.

Thirdly, those same taxpayers eligible for the tax rebate, contribute much of the money to the fiscus, making possible state health services to others.

Taxpayers are not “stealing” from the state via rebates. The money belongs, in the first instance, to the tax payer.

A little bit of respect for the tax payer seems appropriate – rather than creating the impression that taxpayers are piranhas.

Many people are doing themselves short in other respects in their willingness to take responsibility for their own health costs, and are not a drain on state resources.

Then, the state also makes provision for people to save for their old age with a limited tax rebate on pension contributions. Is this also a case of “siphoning money from the state”?

Wider problems

Part of the minister’s problem with the NHI is lethargic economic growth, and a high unemployment rate – meaning fewer high income tax payers and, not enough people on payrolls to tax.

Another real problem is doctors and nurses leaving the state health system for the private sector. It is an oversimplification to think that money is the only issue. Many health professionals have indicated work conditions as pushing them into private practice.

In May 1 000 KZN doctors, nurses and health professionals marched in Durban to register their concern about the deteriorating health services in the province – including the lack of medicines, basic supplies like soap, gloves and needles, inadequate and outdated equipment, frozen and abolished medical posts, and the conditions of service.

There is a lack of quality management with regards to human resources, equipment, medical processes and patient outcomes, and a recycling of poorly performing managers. Ultimately, we believe, there is a lack of accountability and ‘consequence management’ for poor performance,” reported the SAMA Insider of June 2017).

Private practice

The financial position of private care doctors is not always a bed of roses:

  • Private practitioners struggle with high administration costs; bad debt and high medical risk insurance;
  • They do not receive paid leave, sick leave, bonuses, or medical and house subsidies;
  • Specialists in private care must work much longer hours than those in state hospitals to be in the same position financially as colleagues in state hospitals; and
  •  Many doctors in private practice cannot afford to retire at 60 or 65.

Solutions are complex

We do need a more equal system. The solution, however worldwide, is complex.

According to the World Health Organisation, China for example, has a critical shortage of medical practitioners – 1.5 physicians for every 1 000 people, compared with the US’s 2.4 and the UK’s 2.8.

Understandably the minister experiences opposition from vested interests in the private health sector, similar to struggles in other areas like where it wants to replace taxis with public transport.

However, often vested interests developed because the state initially failed to provide a particular service, or due to a lack of trust in it’s ability to deliver suitable services.

The state should care for the vulnerable in society, therefore, society as a whole, should contribute. But, also important, society should not become overly dependent on the state.

Members of society should also accept responsibility for their health. Any system that creates and encourage dependency is, in the long run, unsustainable.

Human behaviour

In all endeavours to create a caring social system, human behaviour should also be kept in mind – all behaviour cannot be regulated.

Some poor people save money or take on loans (sometimes from loan sharks) to see a private doctor, because they are not satisfied with treatment at state facilities.

Behaviour and work ethic are influenced by the fact that private medical care doctors are held personally responsible by patients, and because they can charge for their time, many private practitioners work after hours and week-ends.

Because losing patients threaten their livelihoods, doctors, nurses, and hospitals in the private system often treat their patients with greater respect than the state system. This is not denying that there are also many hard-working staff, treating patients with respect, in the public system.

Challenges bigger than apartheid and money

The minister’s, and the NHI’s challenges are much bigger than merely apartheid and money.

In the March edition of SAMA Insider Prof Dan Ncayiyana writes that the collapse of the Eastern Cape health system is “Not an apartheid legacy, but a democratic failure.

“The irony is that in the bad old days up until the 1994 democratic dispensation the system was in pretty good shape, notwithstanding the ever-present deprivations of staff, money and material”.

According an auditor-general’s report on the Eastern Cape health services, tens of millions of rands are lost every year through deliberate fraud, improper financial oversight, and poorly managed supply-chain systems.

A Special Investigations Unit is also investigating the loss of R800 million between January 2009 and June 2010 in that province.

In fairness, Minister Motsoaledi has limited powers to intervene since health is primarily a provincial responsibility.

Then, while a system of equality is necessary, it should also ensure patients in rural South Africa have the same care options than those living in cities. This is a huge challenge, and all our endeavours should be towards a better system than the present one. The solution will not be easy to find or implement.

Binary thinking will not help us. Co-operation between all sectors of society is necessary to create sustainable equality.

The minister and other role players will need the wisdom of a Solomon to reach that ideal.

by Frederik Nel, PhD, Life Coach, therapist and social commentator.

(Also published in “The Intelligence Bulletin”

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