South Africa


  • Service: Advisory
  • Industry: Healthcare
  • Type: Business and industry issue
  • Date: 2010/09/14

National Health Insurance System can draw from international best practice 

South Africa’s proposed National Health Insurance System (NHIS) faces the advantage of being able to draw extensively from global best practice to ensure efficiencies in service delivery and patient care. This was the view to emerge at a KPMG Dialogue on the NHIS. “Although there are differences in different geographies, many countries face similar issues,” said Sven Byl, Global Executive Director of the KPMG Healthcare Sector. “My understanding is that South Africa is experiencing similar trends to those we are seeing around the globe.”

Three trends affecting the sector include increasing life expectancy, the move from the prevalence of infectious diseases to increasing chronic diseases of lifestyle and more sophisticated consumer awareness, enabled largely through the internet. “There have been a number of developments in health consumerism, with many patients visiting different countries to get treatment, for example. Some governments have also developed a health tourism strategy to encourage this. It represents an economic opportunity for countries,” said Byl.


Governments around the world are also becoming more involved in deciding what a quality healthcare system should look like, apart from the roles played by the payer and the providers of health services. The role of governments is being largely determined by the improved quality of health outcomes data which enables them to decide what to fund and what to avoid funding. “In Singapore, for example, the government has decided to adopt clinical practises that demonstrate the best value for patients. In South Africa, it will be important to invest in good, quality IT systems to ensure that data quality acts as an enabler for government to make critical decisions around a NHIS.”


Governments internationally are also reviewing their funding approaches to capital projects. Many are approaching the private sector to fund the modernising and managing public sector health assets, driven largely by the expertise required to do so.


South Africa’s spend on healthcare represents 8.7% of it GDP which places it in the company of a number of a number of upper-middle income countries and even some high income countries. In relation to other developing economies such as Russia, India and China, this translates to US$1 000 per capita per annum. “In all likelihood, this is going to increase. The challenge for the South African government is how it’s going to allocate the funds and to define the model it’s going to follow in doing so. There is likely to be a big debate between those who favour a large national policy and those who advocate choice, voice and competition. It’s the same debate that occurred in the US.”


A significant change in the global healthcare landscape has been the move to community-based healthcare, with a focus on smaller facilities such as clinics, hospices and homecare rather than large hospitals. This has proved to be cheaper than hospitalisation and has produced better patient outcomes as well.


While the trend for health care skills to migrate is particularly acute in South Africa, it is an issue globally. The trend raises ethical issues since the migration has generally been from developing economies to developed ones. This is likely to be exacerbated by the increase in ageing populations in the developed world.


In the attempt to improve safety, quality and efficiency in the sector, many countries have turned to e-health solutions, where patient and billing data are recorded on smart chips. In some instances, however, countries have chosen the wrong e-health solution. “In the UK, for example, one billion pounds was spent on a NHS computer, with slow implementation. Canada spent hundreds of millions of dollars, with challenges in implementation. The Singaporeans, on the other hand, introduced an IT solution quietly and will phase it in within five years. When they do, they will have an e-health solution available in households. It’s efficient and it’s cheaper than visits to hospital as diagnoses can be conducted virtually,” said Byl.


“Ultimately, in introducing a new healthcare system in South Africa, there are a few key questions that need to be asked. These include ‘who qualifies for NHIS cover, particularly in relation to visitors and migrants?’, ‘who should be required to contribute to a NHIS?’, ‘how does government measure quality against spend?’ and ‘is spend sustainable against economic growth and inflation?’ among others. Once these foundational questions have been answered through policy development, governments seldom revisit them.”


A snap survey conducted at the dialogue revealed that 57% of respondents felt that a NHIS should be funded by contributions by the employer and the employee, with 37% advocating a general tax (including VAT) for the system. In addition, 51% of respondents believed that the NHIS should be introduced over five years with 26% maintaining that it should be done in less than 10 years. The survey showed that 52% believed the introduction of a NHIS would increase productivity as a result of a healthier population and workforce. It would also increase economic activity as the healthcare sector expands to serve more people and increase and improve service delivery as more receive healthcare services. 47% felt that a NHIS would bring positive change.


“Ultimately, health care reform impacts on a country’s most important asset: its people. It is good economic policy, not just the state being benevolent. It impacts directly on the productivity of a country.