Tricky NHI transplant

Health minister Aaron Motsoaledi has repeatedly said he has no intention of harming the private medical scheme industry, but he has not fleshed out what role medical aid schemes can, or will, play under the full NHI environment envisaged in 14 years' time.

Industry players say only schemes that embrace the NHI and reinvent themselves will survive.

Schemes are right to be concerned; the industry is shrinking. The number of registered medical aid schemes has declined from 98 in September 2011 to a current 92. More schemes are expected to disappear, according to the Board of Healthcare Funders.

The board says that without attracting new members and those who are young and healthy, schemes will struggle to meet the regulated prescribed minimum benefits of full payment for chronic and emergency health-care conditions.

Board MD Humphrey Zokufa says schemes, which now have a membership of 8,2m, have been unable to increase their numbers since the introduction seven years ago of the Government Employees Medical Scheme (Gems), which boosted membership from 7m to over 8m.

He says small schemes that fold cannot compete with bigger schemes, and that these larger competitors - such as Discovery, Gems, Liberty, Bestmed, Medshield, Thebemed, Momentum and Topmed - often absorb the small players.

Grant Newton, CEO of medical scheme administrator Sanlam Health, says that though there are historical challenges of trust between government and the private health funding and service provider sectors, there are opportunities for government to gain skills and services from the private sector that could save it money.

Newton says Sanlam Australia, which has a private health product covering 4m lives, is supported by that country's government, which gives taxpayers a 30% rebate for buying private health insurance. He says the Australian government is aware of the role private health plays to relieve the pressure on the state to provide health care for everyone.

"There will always be room for private health funding, even in an NHI environment. Like any national health service, [the NHI will not be able to] be everything and do everything for everyone, which will leave gaps for private health-care opportunities."

Newton says that, for instance, "medical aid administration is a skill that government does not have but that the private health sector can provide. The problem is that government does not trust us . because we have not built that trust."

Zokufa says the organisation he heads, which represents 75% of local medical schemes and seven scheme administrators, is discussing consolidation as a survival tool. It is also discussing collective solutions to pricing and service provider challenges.

"We need to reduce scheme numbers, which [will provide] more bargaining power," Zokufa says.

Profmed principal officer Graham Anderson is not worried about the NHI's effect on the scheme. Profmed provides insurance for well-off citizens, those in the 9-10 LSM level.

Anderson says people who can afford it will still want to jump the queue.

"The number of members might drop but there will always be a private healthcare system. The logistics of serving over 50m people are going to be very tough. What government needs to do is not overtax those who can afford private health, and not try to reinvent the wheel. SA private health care is rated among the global best."

A source close to the department says: "It would be interesting to see how the medical scheme industry is willing to assist in the implementation of the NHI. It would make sense for government to use the private sector. You cannot run an efficient system without the private sector's expertise." Linked IT systems would also be cheaper for both sides.

Health department spokesman Fidel Hadebe says he is not aware of any discussion with medical aid schemes or administrators. He says the NHI white paper will be released soon; hopefully, that will provide more guidance on government's view of the future of private medical schemes.

Source: Financial Mail