Key issues facing the health sector in the next five years

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Key issues facing the health sector in the next
five years

• Thabo Rakoloti
• Director Public Private Partnership
• National Department of Health
• The BHF Annual Southern African Conference, 2007

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Presentation Outline

• Legislative Framework
• Policy Context
• Key strategic challenges
• Focus on key policy areas

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Legislative Framework
everyone has the right to have access to
health care services, including reproductive
health care S.27(1)(a)
The Constitution of the Republic of South
Africa

state must take reasonable legislative and
other measures, within its available resources,
to achieve the progressive realisation of each
of these rights S.27(2)
The National Health Act, 2003
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POLICY CONTEXT
Cover
Burden of disease
Providers
System
Public

• Indigent
• Low-income
• marginalised

• HIV/AIDS
• Infectious
• Communicable
• Chronic

• Medical
• Nursing
• Pharmacy

Private

• HIV/AIDS
• Infectious (na)
• Communicable (na)
• Chronic (reduced)

• High income
• Good risks
• Poor risks (decrease)

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Key Strategic Challenges
financial, human and other resources between the
public and private sectors, relative to the
populations they serve
health care resources available to different
socio-economic groups within the population
Growing maldistribution of
all health care resources between and within
provinces, which has been increasing over the
past few years
Fragmentation of the health system, based on
separate financing and provision arrangements for
different socio-economic groups
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Challenges with current financing system
Inadequate Pooling of resources

• Private sector covers 7m people
• Public sector covers 39m, of which 7m fall
  outside means test
• Individual households Out-of-pocket payments
• 7m low income people who cannot afford medical
  schemes, but do not qualify for free public
  services, so pay out of pocket
• Out of pocket payment is the most regressive form
  of health financing
• Inequity public/private sector
• Inefficiency excessive expenditure on hospitals

Inadequate financial risk protection
Inequity and inefficiencies in financing
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Context Healthcare Financing, 2006
Public sector R52 billion
Serves 38 m
Private sector R66 billion
R1 368 pp
Serves 7 m
R9 428 pp
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  Context Healthcare Provision in 2004,
Distribution of Health Professionals in the South
African Health Care System (2004)
Source Health and Health Care in South Africa
(2004)
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Key Issue 1
Pillar 1

• Universally available basic benefit for all
  citizens and specified classes of legal resident
• Contributory environment over-and-above pillar 1,
  characterized by strong mechanisms to ensure
  social solidarity
• Income-based cross-subsidies
• Risk-related cross subsidies
• Mandatory participation
• Discretionary social security over-and-above
• minimum levels regarded as essential

Pillar 2
Pillar 3
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Key Issue Pillar 2
Out of Pocket Spending
Prepayment
X-subsidy from low to high risk
X-subsidy from rich to poor
Rich
Poor
High risk
Low risk
Low risk
Income
Health risk
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Specific Issue Access to Private Health Care

• The MSA sought to promote non-discriminatory
  access to privately funded health care through
• Open enrolment
• Community rating
• Protecting a core set of benefits from arbitrary
  attrition

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Specific Issues Access to Private Health care

• The major objective has been met but there are
  still concerns involving the following
• very limited growth in overall number of covered
  lives
• open enrolment for high risk individuals being
  frustrated through indirect discrimination
• inappropriate benefit design
• potential fragmentation of risk pools

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Reform of the Medical Schemes Industry

• Legislative Development from 2007- Medical
  Schemes Amendment Bill
• Introduction of the Risk Equalisation Fund
• Restructuring of the Benefit design
• Strengthening of the Governance framework
• Introduction of the general framework for low
  income products
• The Bill will be tabled in Parliament before the
  end of 2007

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Contribution Protection Mechanisms?

• As a result of the escalation of the cost of
  health care, we are in a process to
• Create a statutory framework for effective
  pricing negotiations between funders and health
  care providers.
• Extensive consultation as soon as clear proposal
  are in place.

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Health Technology Appraisal

• Draft Regulations on Health Technology in 2008/9

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Public Private Partnerships

• - Build Operate Transfer where the private
  sectors builds and operates a new facility for
  a given period of time and then transfer it to
  the public sector at the end of the concession
  period
• - Build Transfer Operates that is where the
  transfer of the facility to the government would
  take place as soon as the construction is
  completed, rather than at the end of the
  concession period and
• Revitalise Operate and Transfer where the
  private sector could rehabilitate the
  existing public health facilities at its own
  risk, and then operates and maintains the
  facility at its own risk for a given period
• We are working with the National Treasury to
  prepare concrete proposals for consultation.

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Infrastructure v/s Service Delivery PPPs
100
3
2
Indicative favourable trajectory combining both
infrastructure devt and clinical services
Infrastructure development
1
0
0
100
Delivery of clinical services
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Achieving Millennium Devt Goals

• The Millennium Development Goals (MDGs) have set
  clear targets and goals for eradicating poverty
  and related human deprivations.
• The MDGs include 8 goals, 18 targets and 48
  indicators 3 of the goals, 8 of the targets, and
  18 of the indicators relates directly to health
• Creating a standard reporting and evaluation
  framework for the public and the private health
  sector.

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THANK YOU