South Africa is at a critical juncture with regards to financing the health sector to improve health and to deliver quality health services to all. The 2011 Green paper made clear that the NHI aims to improve access to quality healthcare services and provide financial risk protection against health-related catastrophic expenditure for the whole population (1). It also provided a plan of action to prepare for its introduction A series of national and international consultations and submissions have clarified views, expectations and showed the many challenges that come with changing the way health is financed so as to achieve universal coverage of quality health services (2,3). A series of reports from government and non-government sources have reviewed progress (4,5) and a number of research articles have provided the much needed analysis of the current status of South Africa’s financing of health, the challenges, and comparisons with other countries that are also moving to universal health coverage (UHC) (6). A recent publication on the progress and challenges with reforms in the health sector over recent years showed how changes to health financing, envisaged under the NHI, is just one of many changes underway to achieve UHC in the country (7). This paper provides a personal view of some of the key next steps the country will need to consider as it moves forward with its changes to health financing. The commentary draws on experience from other countries as well as South Africa and focuses on some of early challenges that may need to be considered.
The aim should be to ‘purchase’ services, results and, where possible outcomes, from public, private and not-for-profit providers in a way that drives more efficient and equitable delivery of health. The services (or ‘benefits’) to be available should be a well-defined comprehensive service, including measures of quality, and build on the defined national service guidelines, essential drug lists and protocols that already exist for national Primary Health Care (PHC), HIV/TB and communicable diseases, reproductive, maternal, child and adolescent health, and non-communicable diseases (NCDs). This should include covering catastrophic illness, such as for cancer and major injuries. The new systems for financing should be expanded using an incremental approach, for example starting with high quality PHC services, focusing on non-salary costs, and then expanding to specialist services and inclusion of funds for staff salaries. All steps should be accompanied by careful analysis of cost drivers, access and quality of services. National agreements on the inclusion of new services, technology or drugs should be based, as now, on objective assessment of health technology that include cost-effectiveness studies, and should focus on the benefits from integrated approaches to service delivery. Some public health services will likely continue to require separate funding approaches, such as for disease surveillance and outbreak response, and tackling cross-sectoral determinants of health such as early childhood development (ECD), nutrition, tobacco control and promotion of exercise.
Strategic purchasing will be carried out by the proposed NHI Fund, with clarity on its objectives and on the decision making roles and accountability of institutions at national, provincial, and districts levels and of the providers of services, both public and private. This may require amendments to regulations to enable these roles at different levels. As noted above, the functioning of the NHI fund should be sequenced and be linked to what is feasible in terms of capacity at the different levels. Much of the funding will come from existing district budgets in the public sector, with additional funds, as they become available, for defined expansion and improvement of services. There is now considerable global experience on the options for governance and structure of a strategic purchasing fund that South Africa can draw upon, aiming for agility and minimized transaction costs.
There is also now a large global knowledge base on provider payment mechanisms and how to optimize service delivery using purchasing and contracting arrangements. Central to success is a unified national information system, including for user enrolment or registration, and for provider payment. The government may need to consider changes to rules on public financial management to allow for performance based funding of providers. Districts and service providers will need to better understand what they must do to prepare for payment mechanisms, such as contracts and possible capitation based funding arrangements. In hospitals, financing in many countries is linked to grouping of conditions, such as through diagnostic related groups (DRGs), but simple funding more linked to performance should continue to be explored, as discussed below. Incentives will need continued exploration for contracting private specialist services in under-served rural areas. The introduction of an enrolment or registration system should empowers users, and be part of a move to greater accountability with greater local engagement and oversight of services.
The competition commission enquiry currently underway should help improve the efficiency of private financing and private provision of services. In the early stages of the NHI, there should be close partnership between the development of NHI Fund and private providers with a view to developing a unified information system for registration of users and payment for services. There may also be value in exploring their role in delivering a standardized benefits package. The government may need to review its tax subsidies on medical schemes to be consistent with its longer term goals for a comprehensive PHC service and strategic purchasing.
South Africa, as with all middle and high income countries, will continually struggle to afford the universal coverage of quality health services that its citizens expect to be delivered. There is a growing global pool of documentation and ‘implementation’ science behind achieving and sustaining UHC. South Africa is already contributing to this, and can continue to learn from lessons elsewhere. A few areas are highlighted here:
The introduction of the NHI will bring changes, some good some difficult, some predictable and some unexpected. Careful monitoring, rigorous evaluation and programs of operational, or ‘implementation’ research, will be the key to success. Learning from other countries can help but only to a limited extent. South Africa has a unique history, and has a health sector that will no doubt take an equally unique route on the muddy and sometimes uncertain routine route to universal coverage of high quality health services.
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