In the fourth and last article of a series aimed to empower patients on their rights in the funding of healthcare, Elsabé Klinck looks at the most recent proposed developments in healthcare funding, namely changes proposed to medical schemes, and the National Health Insurance (NHI).
Development in healthcare funding
We have, in the third article of this series, addressed managed care as practised within the medical scheme environment. We have also referred to the prescribed minimum benefits (PMBs) and designated service providers.
Now we are looking at proposals to change the PMBs, as well as other aspects in the medical schemes law, such as agreeing to only go to a designated service provider. We will also look at the health system changes envisaged. This proposed law aims to create a national, countrywide health insurance system, which will include both the public and private sectors.
It must be noted that what we discuss below are only proposals, and no changes to any of the laws or health funding systems are in place yet. It will still be many months, if not years, before such changes are brought into effect.
The review of the PMBs
A process to amend the current PMBs started at the Council for Medical Schemes two years ago. According to the law, the PMBs must be updated every two years. This is to ensure that it keeps pace with developments in technology and healthcare.
These updates have, unfortunately, not been done as the law requires. As a result, many of the descriptions and treatment, or diagnostic options available, are not always recorded as part of the PMBs in the list attached to the regulations.
For example, newer types of diabetes treatments are not included in the treatment descriptions for diabetes, and newer forms of blood glucose monitoring, such as continuous blood glucose monitoring systems, are also not considered for inclusion.
The PMB review process includes representatives from patient groups, as well as doctor and medical scheme groups.
What is significant is that the PMB review process will include consideration of primary healthcare, as well as an alignment with what is envisaged as benefits under the NHI.
The NHI benefit list does not specifically include all the conditions currently listed as part of the PMBs. Requiring, for example, all (or more) primary care chronic conditions to be funded, will necessitate some cuts in the level and types of diabetes benefits. So, to fund more conditions, fewer treatment options in diabetes care may be available.
Therefore, an expansion of what must be covered by medical schemes would necessitate trade-offs, should medical scheme budgets remain the same. More would have to be covered with the same amount of money.
The Medical Schemes Amendment Bill
The Health Market Inquiry, investigating price increases and competition in the private healthcare sector, have found (as recorded on page 456) in their draft report released in July:“Ideally the trustees of schemes should be interceding on behalf of members to ensure that they receive value for money and that administrators are delivering the best possible value to scheme members. But, the governance of schemes is problematic,”
The Medical Schemes Amendment Bill now tightens the responsibilities that rest on the trustees and principal officers of medical schemes, to act in the best interests of the beneficiaries of the scheme.
Other changes are proposed in this draft law. One of these changes will support the creation of two registers, or lists. One for people who belong to medical schemes and one for healthcare providers.
- The beneficiary register will help the Council for Medical Schemes determine what the health status and needs of patients are. This will assist with planning on the resources needed to render healthcare services.
- The healthcare provider register will be a list of doctors, hospitals and other healthcare providers.
Both lists will be provided to the NHI Fund. It seems that the medical scheme amendments will assist in the transition into a national health insurance system.
The Bill also proposes a new system of benefits to replace the current PMBs. These benefits will be “service benefits”. This is not described in the law, and it seems that schemes will no longer have to pay for certain diagnoses, such as diabetes, but rather for a certain number of doctor visits, specific medicines, specific tests, and so on.
The Amendment also creates a new type of medical scheme option or plan, called “efficiency discounted options”. If a person agrees to belong to such an option or plan, the person and all their beneficiaries agree to only use preferred or network providers. This means one would not be free to choose one’s provider. In return, however, there will be a reduction in medical scheme monthly contributions or premiums.
Other changes brought about by the proposed law relates to contributions or premiums. If the main member’s contribution is expressed as 100%, the main adult dependent(s) would pay 50% of that, adult children (up to the age of 30 years) 40% of that, and child dependents 20% of that.
The idea is to create an incentive for younger adults to stay on medical schemes, to address the fact that young people often do not belong to medical schemes. Having young, healthy people on medical schemes is important, for the cross-subsidising effect it has.
Many stakeholders have expressed concerns about many aspects of the Bill, such as the income that will be lost by the flat-structure premiums, etc. A key concern has been the proposed amendments to benefits as service benefits. What will happen to persons with diabetes who have certain benefits as part of the PMB rules, where such benefits are no longer prescribed in law? If more conditions must be funded, medicines and other treatment options will be limited, as the same budget would now have to stretch to cover more. This would mean that patients may no longer have all their diabetes treatments funded as in the past.
The NHI Bill has been lauded as the solution to many problems facing the health sector. It proposes that the NHI structure to be set up, called the NHI Fund, become the only entity that will buy services and goods. Currently goods, such as medicines, are bought by the various provinces and other entities, such as the military and correctional services. It is hoped that by centralising the funding of healthcare, many of the current problems on financial ability to pay for medicines and to ensure sufficient supply could be addressed.
However, the South African Constitution currently makes provinces legally responsible for rendering healthcare, and compels the treasury to make sure that monies are allocated to provinces to fulfil this mandate.
Shift from current system
What the NHI Bill proposes is a fundamental shift from the current system. Under this system general tax money is provided to the provinces, and with that money they create, maintain and fund public hospitals and clinics with staff being paid, with medicines, and so forth, to render the healthcare services.
The NHI system will separate the service providers (i.e. the public hospitals, clinics and their staff) from the funding model. So, all public hospitals and clinics will be service providers contracted to the NHI Fund. They will then get paid according to the patient population they are generally looked after. They will therefore no longer get a general budget from the national treasury through their province. Medicines and medical devices will then also not be supplied from the province, but bought by the NHI Fund and provided directly to the hospital or clinic.
Another fundamental change is that, whereas provincial health allocations are done based on the extent of how rural the province is, as well as how large the population is, the new allocations will be on the disease- and incident (e.g. accident) profiles in the feeding area of that hospital.
So, a diabetic patient who suffers a hypoglycaemic event and goes to hospital, will be covered by that hospital based on calculations that was made on the estimated numbers of similar patients in that area who are likely to require hospitalisation due to hypoglycaemic events.
Clinics, who render primary healthcare, and where diabetes care will be based, will be funded on a capitation basis. That means, if that clinic renders services to a thousand patients, that clinic will receive a flat per patient per month fee to look after that patient, irrespective of how sick or well the patient is.
Private general practitioners, nursing practitioners and other primary care providers could, under the new proposals, join forces and collectively contract with the NHI authority on a district level to provide primary care. The idea is that servicing uncomplicated patients could be done by, for example, nursing professionals, whereas more complicated care could be rendered by a GP, etc.
The NHI Bill also makes it clear that private sector hospitals and specialists could contract into the NHI, but is not clear on how they would be paid for rendering services to NHI patients. No private sector provider would be permitted to “opt out” of the NHI. To receive a certificate to practice, a person must be accredited by the NHI, and therefore render services to NHI patients.
Supply chain unknown
It is not known exactly how the supply chain will work, and how a diabetic patient will receive medicine under the NHI. If the patient goes to their primary care provider in their area, the cost of that visit will be covered by the capitation agreement between that provider and the NHI Fund. The patient will then get a prescription for, for example, an insulin. The patient will then get that specific insulin from the pharmacy in their area if that insulin is part of the NHI Fund’s benefits. This raises the question that if the patient’s specific insulin is not available from the NHI Fund – can that patient obtain their insulin from their medical scheme, or pay out of pocket?
As the Medical Schemes Amendment Bill proposes that medical schemes do not provide duplicative cover, it is not clear whether it would be possible for a patient to get their consultation for a specific condition from the NHI, but their medicine from a medical scheme.
There are still many uncertainties as to how, practically, the proposed changes to the PMBs, the Medical Schemes Amendment Bill and the NHI Bill will affect the delivery of diabetes care.
It is, however, important that patients living with diabetes are involved in the discussions around these changes. They need to make their voices heard as to how various proposals would, practically, affect their right of access to healthcare, and the availability of services, medicines and medical devices, which are required to ensure optimum health outcomes.
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Elsabė Klinck (B.Iuris, LLB, BA Hons (German), BA Applied Psychology) specialises in health law, -policy and -ethics. She owns a successful healthcare consulting firm, serving various clients in the pharmaceutical, medical device, healthcare professional and health facility markets.