CHAMBER OF MINES OF SOUTH AFRICA

COMMENTS ON THE DEPARTMENT OF HEALTH'S WHITE PAPER FOR THE TRANSFORMATION OF THE HEALTH SYSTEM IN SOUTH AFRICA


INTRODUCTION
The Chamber welcomes the white paper for the transformation of the health system in South Africa. It is a praiseworthy effort to present a document that sets out the framework as well as the policy, objectives and principles of the Department of Health to achieve a health care system that meets the basic needs of all South Africans. The white paper is an extensive document and these comments will only focus on some of the important and relevant aspects to the Chamber.

Given the limited resources available, as well as the constraints of the health care system inherited by the new government, the primary health care approach of the Department of Health is supported. The major concern however, is how to achieve comprehensive primary health care for all without jeopardizing the excellent existing health care services which would be to the detriment of all South Africans.

The private sector should work in unison with the Department to achieve accessible, affordable and sustainable health care for all. However, the Chamber has serious concerns as to how these common goals are to be achieved and these are set out in the following discussions.

A UNITED RESPONSE
The white paper refers to a single, unified health system that will include the private sector to promote common goals. The "pooling" of both public and private sector resources is required according to the white paper to meet the basic needs of all people. Integration of the private health care sector into a National Health System (NHS)is foreseen in the white paper.

There is no doubt, taking the size and the services available within the private sector (including the mining industry), that the private sector has a major role to play in achieving the goals of the NHS, but the crucial issue is how this will be achieved within a framework of voluntary cooperation, goodwill and a market oriented economy. Regulatory reform proposed in the white paper is cause for concern to business and the private health care sector where the approach seems to be more towards regulation than promoting voluntary cooperation following consultation. A united response that would be to the benefit of all parties, could only follow after consultation and agreement, and free-market principles should apply where feasible.

The Chamber would once again pledge it's willingness to cooperate and to form part of a unified response, at all levels of health care, provided this occurs within a consultative framework. This could well take place, inter alia, in the form of accredited providers as contemplated by the Department of Health in the white paper.

AFFORDABILITY
Affordability of the NHS is crucial, as it must be accepted that the demand for health care would always exceed the available resources and scarce resources therefore must be rationed. Future availability and rationing of health care will foremost be dependent on economic growth.

The white paper clearly states that it considers the goals of the NHS affordable, provided that a redistribution of public resources takes place and new sources of public health finance are acquired over and above general government revenue. Acquiring additional sources of public health finance is a macro-economic issue as it could result in an irreversible surge of financing requirements for health.

SOCIAL HEALTH INSURANCE
The issue of social health insurance is dealt with very briefly, without any substantial detail, by the white paper. It is indicated however that a detailed policy on health insurance will be published in another white paper to complement the current white paper.

However, based on the white paper and comments made by the Director-general on the subject at a National Consultative Forum, the following is clear:

· all formally employed persons will be required to be insured for the costs of treatment for themselves and their dependents in public hospitals;
· the cost of this insurance will be shared between employers and employees;
· contributions will be related to income and family size;
· the proposal constitutes a new tax, in the form of a payroll levy, to fund public hospitals outside the national fiscus.

This insurance is motivated to cover all formal sector employees for treatment at public hospitals as well as members of medical schemes who have exhausted their medical benefits and then seek further treatment at public hospitals.

However, the white paper refers to social insurance as "(a)nother important means of increasing public health finance". Public hospitals will most probably only retain a portion of fees generated with the balance paid to provincial health departments to finance the shortfall in the state's free primary health care package (estimated at R1,4bn in 1997/8 rising to R3,4bn by the turn of the century).

Such a situation would fail to balance paying taxes to receiving benefits in return and would merely constitute an additional tax. The following principles should apply before such a dedicated tax is implemented:

· a defined package of services and benefits should be guaranteed to those taxed;
· employers providing such a defined package to their employees should be exempted from contributions or reimbursed for similar health services provided;
· exemption of medical scheme contributors who are sufficiently insured with no potential liability for public hospitals.

Due to the potential impact such a levy would have on the private health sector and business, it would have to be acceptable to the National economic development and labour advisory council (Nedlac) as well as the Department of Finance.

All of the concerns expressed above would of course have to be reconsidered in more detail once the white paper on the subject is made available to all stakeholders. It is recommended that the Department follows an open and consultative process in this regard.

REGULATION OF THE PRIVATE SECTOR
The Department of Health and the white paper is bound on regulating the private sector through the licensing of health care facilities on a 80:20 ratio rather than allowing free market forces to operate, and even though there might be some merit in such an approach the opportunities for abuse becomes real cause for concern.

The white paper states that a proper informed approach is necessary to regulate the private sector and that " a central weakness in the regulatory framework has been the tendency to lay down rigid regulations about what the private sector can and cannot do."

However, contrary to the above, the white paper also states that medical schemes will be more regulated in future and that the recent deregulation of the private health insurance market will be reversed. The white paper is very prescriptive stating that " medical schemes may not exclude an individual on the basis of health risk" which would have been fine provided schemes were allowed to apply proper risk management principles. The white paper continues by stating that "contribution rates for the full package of benefits will be set according to income and number of dependants"

An internal document of the Department has been available which contemplates a system of "community rating" as well as an Equalisation Fund which are highly controversial. The Chamber has serious concerns about the viability of such a system in South Africa which inter alia does not allow rating by age. Further details are required from the Department of Health to clearly set out their approach to regulating the private sector as following criticism of this document titled Proposals Concerning the Financing of the Private Health Industry in South Africa the Department indicated that the document was just an initial, unofficial discussion document.

The issues of pre-funding for post-retirement health care and tax incentives are complicated ones which need much more in depth consideration.

The Chamber agrees with the white paper that the practice of transferring patients to private hospitals once their medical benefits are exhausted should be discontinued, but then medical schemes must be allowed to do risk management in accordance with sound economic principles.

The Chamber recommends that the Department of Health seriously engages in thorough consultations with all stakeholders on all issues affecting the private sector before making papers available or continues to process legislation on the subject.

OCCUPATIONAL HEALTH
The white paper states that the providing occupational health services would be the responsibility of the provincial authorities, mainly to provide services to the informal and smaller work places. This should be done with due regard of the health care services provided in terms of the legislation dealing with occupational health and in close cooperation with the Department of Labour as well as the Department of Minerals and Energy to avoid duplication. The white paper, sadly, is silent on the most progressive piece of occupational health and safety legislation in South Africa namely the new Mine Health and Safety Act, No.26 of 1996.

The white paper is also silent on the major role that occupational health services could, and are currently fulfilling in providing primary health care, especially in rural areas. This should be acknowledged as part of a united response, with due credit to the providers of such services.

NATIONAL HEALTH LABORATORY SERVICE
The future role and function of the Chamber in the South African Institute for Medical Research is part of separate discussions between the stakeholders.

HIV AND AIDS
The Department of Health should take cognisance of recent international approaches to the HIV epidemic and the focus should shift from a human rights to a public health issue in order to contain the spread of the virus.

The white paper mentions legislative interventions to outlaw discrimination and discriminatory practices, but in line with the Constitution of South Africa, the referral should be to unfair discrimination rather than just discrimination.

CONCLUSION
The white paper provides the framework within which the Department of Health will strive to achieve the objectives of a National Health System. The private health sector is seen as an integral part of this system by the Department. The Chamber supports the approach of cooperation and rational application of resources with the objective of optimising the use of physical and human resources, but insists that the solution should be a mutual beneficial one.

Extensive discussions and consultation are essential to achieve such a mutual beneficial approach and the Department of Health should further engage in such a process with all stakeholders on the critical issues raised above.