South Africa
South Africa is divided into nine provinces, each of which is further divided into districts and sub-districts. In total there are 52 health districts spread across the nine provinces. Prior to 1994, districts were charged with all preventive primary care and environmental health services while the provinces were responsible for curative primary services.
South Africa is divided into nine provinces, each of which is further divided into districts and sub-districts. In total there are 52 health districts spread across the nine provinces. Prior to 1994, districts were charged with all preventive primary care and environmental health services while the provinces were responsible for curative primary services.
In 1961, South Africa became an independent nation-state. Shortly thereafter, the country legalized the continuation of apartheid policies, which called for racial segregation between whites and blacks. Under this system, private insurance organizations called Medical Schemes were established by private firms in order to provide for the healthcare of their white employees. Initially these schemes were few and normally took shape as “restricted” schemes, meaning that membership was only available to employees of a firm or a group of firms. Since the start of Medical Schemes, however, there have also been “open” schemes which allowed anyone to join. Since the late 1970s, non-whites have been able to sign up for Medical Schemes.
The continuation of apartheid reinforced the status quo within the health system, exacerbating inequalities between the urban and rural areas as well as between black and white populations. Up until the 1980s, there were separate hospitals and health care facilities for blacks and whites. Such a situation led to administrative and clinical service overlaps, creating significant inefficiencies in the use and allocation of available health resources. By 1994, the public sector had an extensive hospital-based, curative care system concentrated in urban areas. Conversely, due to systematic neglect, its district hospitals and primary care services were poor.
During the 1980s, the poor economic conditions within South Africa led the government to subscribe to neoliberal policies, key of which were fiscal restraint and the growth of the private health sector. This policy undermined the potential for cross-subsidies within the health system as a whole and led to increased inequality in access to and utilization of health services. During this time, for-profit general hospitals experienced particularly rapid growth, doubling between 1988 and 1993.
South Africa
Historical Context
South Africa is divided into nine provinces, each of which is further divided into districts and sub-districts. In total there are 52 health districts spread across the nine provinces. Prior to 1994, districts were charged with all preventive primary care and environmental health services while the provinces were responsible for curative primary services.
In 1961, South Africa became an independent nation-state. Shortly thereafter, the country legalized the continuation of apartheid policies, which called for racial segregation between whites and blacks. Under this system, private insurance organizations called Medical Schemes were established by private firms in order to provide for the healthcare of their white employees. Initially these schemes were few and normally took shape as “restricted” schemes, meaning that membership was only available to employees of a firm or a group of firms. Since the start of Medical Schemes, however, there have also been “open” schemes which allowed anyone to join. Since the late 1970s, non-whites have been able to sign up for Medical Schemes.
The continuation of apartheid reinforced the status quo within the health system, exacerbating inequalities between the urban and rural areas as well as between black and white populations. Up until the 1980s, there were separate hospitals and health care facilities for blacks and whites. Such a situation led to administrative and clinical service overlaps, creating significant inefficiencies in the use and allocation of available health resources. By 1994, the public sector had an extensive hospital-based, curative care system concentrated in urban areas. Conversely, due to systematic neglect, its district hospitals and primary care services were poor.
During the 1980s, the poor economic conditions within South Africa led the government to subscribe to neoliberal policies, key of which were fiscal restraint and the growth of the private health sector. This policy undermined the potential for cross-subsidies within the health system as a whole and led to increased inequality in access to and utilization of health services. During this time, for-profit general hospitals experienced particularly rapid growth, doubling between 1988 and 1993.
In 1994, South Africa held its first universal elections, with the African National Congress taking office by an overwhelming majority. After passage of the 1996 Constitution, a federal governing structure was adopted, with considerable autonomy given to the provinces. The public health system was reorganized into a national Department of Health with a counterpart in each of the nine provinces. Some local governments also had health departments, but their role remained uncertain until recently. The private health system continued under the overarching Medical Schemes structure.
In 1994, South Africa held its first universal elections, with the African National Congress taking office by an overwhelming majority. After passage of the 1996 Constitution, a federal governing structure was adopted, with considerable autonomy given to the provinces. The public health system was reorganized into a national Department of Health with a counterpart in each of the nine provinces. Some local governments also had health departments, but their role remained uncertain until recently. The private health system continued under the overarching Medical Schemes structure.
One of the post-1994 innovations was the move toward a district-based system intended to make health management responsive to local conditions and resource distribution more equitable. The success of such a scheme, however, has been hampered by the lack of full devolution of authority and the lack of adequate managerial and technical capacity to support proactive decision making and planning. District management teams are responsible for daily management of primary health facilities and community outreach programs. While a number of initiatives have strengthened their capacity, they have acted as units of a decentralized provincial system instead of as management entities with delegated authority. This has led to insufficient accountability of district teams for health service provision. The overburdened public sector, which functions as a provider-of-last-resort, caters to 84% (42 million lives) of the population with a budget that constitutes 52% of health spending within the country.
In 1994, the African National Congress established a Commission of Inquiry into the state of the healthcare system. The recommendations made by the Commission in 1995 were eventually put into practice by the 1998 Medical Schemes Act. Private Medical Schemes were redesigned in order to make them more affordable. First, community rating was introduced in order to entrench the principle of solidarity and to prevent individual risk rating. Second, open enrollment was introduced to expand access to those who had previously been excluded. Third, a set of minimum benefits were instituted to ensure adequate and consistent coverage for all medical scheme members irrespective of their benefit option. Finally, corporate governance structures were introduced to protect members’ interests. These reforms were meant to facilitate progress towards a Social Health Insurance system. The reforms also proposed for the implementation of a Risk Equalization Fund within the Medical Schemes system. However, in December 2007 the government decided to shelve the idea of implementing Social Health Insurance and instead opted to implement the more universal National Health Insurance. As a result of this decision, there are no plans to institute a Risk Equalisation Fund within the medical schemes environment.
The current focus of the health system reforms is multi-faceted. While the debate around the exact form that the National Health Insurance must take is still ongoing, the government released a green paper in August 2011, which outlines the proposed NHI plan. Over the next three months, the green paper will undergo a period of public commentary after which point, public input will be incorporated and it will be transformed into a white paper. Fundamental to the plan are strategies to strengthen the historically weak public health infrastructure as well as to mobilize domestic resources through a mix of general taxes and compulsory contributions from individuals above a certain income threshold. There is also a stronger focus on primary health care services and more appropriate use of hospital services. increasing and improving the quality of training for health professional categories, particularly doctors, nurses and allied. Further, efforts are underway to strengthen the partnerships between the public and private health sectors so as to harness the financial and human resources available in the country to provide accessible, quality health services to the population.
The private sector within South Africa is shrinking but remains well entrenched. It consumes approximately 48% of financial resources while catering to 16% (8.2 million lives) of the population. The private system benefits from significant direct and indirect subsidies from the government. These subsidies stem from tax exemptions on Medical Scheme contributions and from public training of healthcare workers who migrate to the private sector after graduation.
South Africa
Summary of Reforms
In 1994, South Africa held its first universal elections, with the African National Congress taking office by an overwhelming majority. After passage of the 1996 Constitution, a federal governing structure was adopted, with considerable autonomy given to the provinces. The public health system was reorganized into a national Department of Health with a counterpart in each of the nine provinces. Some local governments also had health departments, but their role remained uncertain until recently. The private health system continued under the overarching Medical Schemes structure.
One of the post-1994 innovations was the move toward a district-based system intended to make health management responsive to local conditions and resource distribution more equitable. The success of such a scheme, however, has been hampered by the lack of full devolution of authority and the lack of adequate managerial and technical capacity to support proactive decision making and planning. District management teams are responsible for daily management of primary health facilities and community outreach programs. While a number of initiatives have strengthened their capacity, they have acted as units of a decentralized provincial system instead of as management entities with delegated authority. This has led to insufficient accountability of district teams for health service provision. The overburdened public sector, which functions as a provider-of-last-resort, caters to 84% (42 million lives) of the population with a budget that constitutes 52% of health spending within the country.
In 1994, the African National Congress established a Commission of Inquiry into the state of the healthcare system. The recommendations made by the Commission in 1995 were eventually put into practice by the 1998 Medical Schemes Act. Private Medical Schemes were redesigned in order to make them more affordable. First, community rating was introduced in order to entrench the principle of solidarity and to prevent individual risk rating. Second, open enrollment was introduced to expand access to those who had previously been excluded. Third, a set of minimum benefits were instituted to ensure adequate and consistent coverage for all medical scheme members irrespective of their benefit option. Finally, corporate governance structures were introduced to protect members’ interests. These reforms were meant to facilitate progress towards a Social Health Insurance system. The reforms also proposed for the implementation of a Risk Equalization Fund within the Medical Schemes system. However, in December 2007 the government decided to shelve the idea of implementing Social Health Insurance and instead opted to implement the more universal National Health Insurance. As a result of this decision, there are no plans to institute a Risk Equalisation Fund within the medical schemes environment.
The current focus of the health system reforms is multi-faceted. While the debate around the exact form that the National Health Insurance must take is still ongoing, the government released a green paper in August 2011, which outlines the proposed NHI plan. Over the next three months, the green paper will undergo a period of public commentary after which point, public input will be incorporated and it will be transformed into a white paper. Fundamental to the plan are strategies to strengthen the historically weak public health infrastructure as well as to mobilize domestic resources through a mix of general taxes and compulsory contributions from individuals above a certain income threshold. There is also a stronger focus on primary health care services and more appropriate use of hospital services. increasing and improving the quality of training for health professional categories, particularly doctors, nurses and allied. Further, efforts are underway to strengthen the partnerships between the public and private health sectors so as to harness the financial and human resources available in the country to provide accessible, quality health services to the population.
The private sector within South Africa is shrinking but remains well entrenched. It consumes approximately 48% of financial resources while catering to 16% (8.2 million lives) of the population. The private system benefits from significant direct and indirect subsidies from the government. These subsidies stem from tax exemptions on Medical Scheme contributions and from public training of healthcare workers who migrate to the private sector after graduation.
South Africa stands to benefit from improvements in distinct facets of its health sector. Management is highly centralized at the provincial level, which leads to frustration among competent hospital managers due to the lack of authority. Meanwhile, provinces have in the past been reluctant to devolve authority to managers with little competence.
South Africa stands to benefit from improvements in distinct facets of its health sector. Management is highly centralized at the provincial level, which leads to frustration among competent hospital managers due to the lack of authority. Meanwhile, provinces have in the past been reluctant to devolve authority to managers with little competence. This has contributed to a vicious cycle of competent managers leaving the system and provinces being reluctant to devolve authority to lower levels due to the lack of capacity among management. This cycle can be broken if there are clear definitions of the delegation of authority to hospital managers that are linked to performance substantive monitoring. . Nonetheless, the Department of Health has recently completed a comprehensive audit of the skills and competence of all hospital managers with a view to identifying the most appropriate interventions to address the lack of capacity at that level as well as to develop initiatives for appropriate delegations to be given to these managers so that they can appropriately and effectively run hospitals.
South Africa’s poor performance in key health metrics like the Infant Mortality Rate and the Maternal Mortality Rate does not appear to be related to the levels of government expenditure in health. Rather, the health system appears to be underperforming within its current level of expenditure. In fact, South Africa is among only 12 countries in the world whose key health status indicators have experienced a further deterioration since the adoption of the Millennium Development Goals . This suggests that an improvement in health outcomes can be achieved without a significant addition of resources to the healthcare budget. An emphasis on reconfiguring the institutional and organizational elements of the health system can go a long way in ameliorating South Africa’s health status.
The current regulatory framework does not allow the country to address the mix of public and private providers, either in the incidence of benefits or in the financing breakdown. Financial and human resources have been migrating to the private health services sector, even while the proportion of the population acceding to it for care has decreased. Large sums of money are spent on marketing activities by open schemes intent on attracting young and healthy enrollees. Such cream-skimming attracts resources away from their intended purpose. There also exist vast salary differences between the public and private health sectors. This creates a tiered brain-drain system whereby public sector health workers migrate to the private sector and private sector health workers migrate to other countries. This disparity is incongruent to the disease burden and patient profiles that are prevalent among the populations attended to by each sector.
Finally, since the 1990s many proposals have been suggested for the introduction of National Health Insurance (NHI). The most recent proposal is contained within the 2010 ANC National General Council documents. The proposal calls for a publicly administered NHI Fund situated within the Ministry of Health organized to receive funds through a single-payer system. Under this system, services would be provided by both public and private providers and membership would be compulsory for all South Africans, with the option to enroll in voluntary Medical Scheme plans. The process will begin with consultations with the interested parties and will then proceed to a review of current legislation and the drafting of new legislative proposals.
South Africa
The Way Forward
South Africa stands to benefit from improvements in distinct facets of its health sector. Management is highly centralized at the provincial level, which leads to frustration among competent hospital managers due to the lack of authority. Meanwhile, provinces have in the past been reluctant to devolve authority to managers with little competence. This has contributed to a vicious cycle of competent managers leaving the system and provinces being reluctant to devolve authority to lower levels due to the lack of capacity among management. This cycle can be broken if there are clear definitions of the delegation of authority to hospital managers that are linked to performance substantive monitoring. . Nonetheless, the Department of Health has recently completed a comprehensive audit of the skills and competence of all hospital managers with a view to identifying the most appropriate interventions to address the lack of capacity at that level as well as to develop initiatives for appropriate delegations to be given to these managers so that they can appropriately and effectively run hospitals.
South Africa’s poor performance in key health metrics like the Infant Mortality Rate and the Maternal Mortality Rate does not appear to be related to the levels of government expenditure in health. Rather, the health system appears to be underperforming within its current level of expenditure. In fact, South Africa is among only 12 countries in the world whose key health status indicators have experienced a further deterioration since the adoption of the Millennium Development Goals . This suggests that an improvement in health outcomes can be achieved without a significant addition of resources to the healthcare budget. An emphasis on reconfiguring the institutional and organizational elements of the health system can go a long way in ameliorating South Africa’s health status.
The current regulatory framework does not allow the country to address the mix of public and private providers, either in the incidence of benefits or in the financing breakdown. Financial and human resources have been migrating to the private health services sector, even while the proportion of the population acceding to it for care has decreased. Large sums of money are spent on marketing activities by open schemes intent on attracting young and healthy enrollees. Such cream-skimming attracts resources away from their intended purpose. There also exist vast salary differences between the public and private health sectors. This creates a tiered brain-drain system whereby public sector health workers migrate to the private sector and private sector health workers migrate to other countries. This disparity is incongruent to the disease burden and patient profiles that are prevalent among the populations attended to by each sector.
Finally, since the 1990s many proposals have been suggested for the introduction of National Health Insurance (NHI). The most recent proposal is contained within the 2010 ANC National General Council documents. The proposal calls for a publicly administered NHI Fund situated within the Ministry of Health organized to receive funds through a single-payer system. Under this system, services would be provided by both public and private providers and membership would be compulsory for all South Africans, with the option to enroll in voluntary Medical Scheme plans. The process will begin with consultations with the interested parties and will then proceed to a review of current legislation and the drafting of new legislative proposals.
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