Health reforms in South Africa may impact medical tourism

The National Health Insurance Bill will change healthcare in South Africa. It aims to ensure most healthcare, including doctors’ visits, medicines, operations and hospital stays, will be free, for all South Africans, without any co-payments. The bill means that people may be treated by private doctors and in private hospitals and could lead to private hospitals not having the spare capacity for medical tourists.

South Africa’s National Health Insurance Bill has now been tabled in parliament, although it will have to be considered by both the National Assembly and the National Council of Provinces, and go through public consultation before it can be implemented.

The legislation will have far-reaching health reforms aimed at achieving the government’s ambition of providing universal health coverage.

The main aim is to launch an NHI Fund that will purchase health services on behalf of patients from public and private sector providers, which will be free at the point of care.
A key aspect of the bill is the future role it envisages for medical schemes, which currently provide coverage to about 8.9 million people. Private medical schemes cover 16% of the population, with most of the principal members of these schemes working in the formal sector. They will be phased out.

Instead of the current medical schemes, medical insurance will become more common. To ensure that they will still have direct access to a specialist, and no waiting times for treatments, wealthier people will probably take out medical insurance on top of their NHI contribution every month.

New specific types of top-up medical insurance, for orthodontics, or for cancer treatment, will probably be created.

South Africans will not pay subscriptions but will pay for it in tax. The government plans to introduce a payroll levy and a surcharge on personal income tax to fund the system. The government will use that money, and some of its health budget, to buy healthcare for all South Africans. That means that people may be treated by private doctors and in private hospitals.

Most healthcare, including doctors’ visits, medicines, operations and hospital stays, will be free, for everyone, without any co-payments. The national fund will not cover treatment if it’s not a medical necessity and where there isn’t a cost-effective intervention.

Every year, government will determine what prices will be paid to private and public hospitals and clinics for by specific services.

All South Africans covered under the bill must register as a user with the NHI fund at an accredited health care service provider or health establishment. Whenever users need to access healthcare, they will first need to visit this primary care facility. This facility may then refer the user to a specialist or another facility. If these referral pathways are not followed, users will not be covered by the NHI fund and will have to pay out of pocket.

The government acknowledges that state medical staff and hospitals cannot cope with treating the 83% of South Africans who don’t have medical insurance. Luckily there is an oversupply of private hospitals.

The wording is vague but only works if accredited healthcare providers include both public and private hospitals and clinics. But there is a catch, as accredited healthcare providers must have:

  • A minimum required range of personal health care services as specified by the minister.
  • Allocation of the appropriate number and mix of health care professionals.
  • Adherence to treatment protocols and guidelines, including prescribing medicines.
  • Adherence to health care referral pathways.
  • Adherence to the national pricing regimen for services delivered.

Instead of the private sector buying medicines for its patients, and the state securing treatments for public-sector patients, government will buy medicines for all patients.
Foreigners visiting South Africa must have travel insurance to receive health care services through the NHI Fund.

Although not clear in the bill, the intention is that anyone living legally in South Africa must pay into the scheme, including long-term expats, but the position of temporary overseas workers is unclear.

The unresolved issues of unaffordable private healthcare and poor levels of service delivery in the public sector have impacted negatively on South Africa’s national healthcare system, resulting in an inability to ensure that all South Africans have access to quality healthcare based on need and not on their ability to pay.

The implementation of the NHI is aimed at moving the country closer towards universal health cover, whereby all citizens, irrespective of their socio-economic status, will be covered to receive quality healthcare services based on their health status.

Private hospitals have publicly accepted that the legislation can no longer be stopped so they must work with the government.

In the long-run, private hospitals are unlikely to have spare capacity for medical tourists.