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National Health Insurance – South Africa Style

Posted by John McDonough  October 7, 2012 02:59 PM

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I just returned from a week long training program in South Africa (SA) with some colleagues from the Harvard School of Public Health. We were there for the launch of collaboration with health professional schools in Pretoria and East London to train up-and-coming officials in the South African health system to meet the challenges in this dynamic and complex system. While there, I also got a look at that nation's efforts to achieve national health insurance for its 50 million residents.

I arrived thinking they might have some things to learn from the U.S. health reform experience, and left convinced we have some things to learn from South Africa. Here are some thoughts, mostly written on the 16-hour plane ride back home:

Both SA and the US have apartheid legacies, though in SA it was apartheid against the vast majority of 80% non-whites, and in the US it was apartheid against the 10% of African Americans, plus American Indians and others. (Those who don't understand apartheid American-style might want to read The Warmth of Other Suns by Isabel Wilkerson.)

Both SA and US have separate and unequal health systems. In SA, about 17% of the population have private health insurance ("medical schemes") giving them full access to the best medical care the country has to offer; about another 30% pay out of pocket for private outpatient services and use public hospitals when needed; and the majority rely on an overstretched and underfinanced public system -- the nation spends nearly equal amounts on the private and the public systems. In the US, we have 17% uninsured, reliant on charity care, and another 10-15% badly underinsured, while the large majority has access to good care with all its flaws. In both societies, a key health reform worry is how to extend good coverage to the disadvantaged without threatening the good care provided to the fortunate.

Among our respective peers, both nations spend lots on medical care. The US is far and away #1 in the world in spending, even though we are the only one of the 25 most advanced nations not to provide universal health coverage. SA is classified as an upper middle-income country that spends an above average amount of money on health care, it is increasingly in the minority of its peers in not having national health insurance, as countries such as Brazil, Thailand, Korea, Taiwan, Mexico and others already have implemented NHI for their people. As a special issue of the Lancet made clear earlier this year, NHI is now a global phenomenon as even poorer nations such as Vietnam, Ghana, and Nigeria reach for it. The US and SA have less and less company in leaving so many of citizens unprotected.

Why nations are doing it now is noteworthy, as they recognize that NHI is a key path to long-term economic development. Protecting citizens from the financial ravages of illness and injury keeps people fiscally as well as physically healthy, and more able to be productive citizens. The Commission on Macroeconomics and Health estimates that every ten year increase in life expectancy at birth triggers continuing economic growth of .3 to .4 percent each year. Nations are catching on -- covering everyone is good for business.

And the converse is also true. In the U.S., researchers now document declining rates of life expectancy among lower educated white populations. What a waste and what a tragedy!

Both the US and SA have been talking about some form of national health insurance going back to the 1920s and 1930s. Though the US has not implemented the biggest part of the Affordable Care Act yet, we're on the other side of the "passing a law" mountain, working our way through the swamps of contentious implementation. SA is still facing the mountain and it looks steep and rocky, just as ours did.

Like ours, the SA health system is loaded with inefficiencies and inequities. System improvements such as "paying for performance" and moving away from fee-for-service are aspirations, with little on the ground experience. Their health professional shortages make ours look like peanuts. And corruption, unfortunately, is rampant in many parts of the system.

Though South Africa has a bona fide multi-party democracy, the African National Congress (ANC) -- the leading force to overthrow apartheid -- has run the government since 1994 with lopsided majorities. The ANC Party Congress (imagine if the Democratic or Republican Party Platform were a governing document with real teeth) sets the nation's agenda, and prioritized NHI four years ago. SA's Health Minister, Dr. Aaron Motsoaledi, is working hard to make it happen. In August 2011, he released a "green paper" policy document that laid out broad goals and intentions, and will disclose more in an upcoming "white paper" scheduled for release by the end of this year. He has a 25 person advisory committee that includes all key stakeholders, and it's working hard to get down to brass tacks.

A key choice design choice is what to do with the private "medical scheme" system that currently covers only about 17% of the people. Expanding that system to everyone would increase the cost of the SA health system from around 8.5% of gross domestic product to about 30% -- making the US system look cheap by comparison. Getting rid of it would alienate not just the white minority but growing numbers of the African middle class, including government workers who were just recently folded into this system. Also, the SA system badly needs data, information systems, and other advanced tools the US takes for granted.  Right now, it is the private sector alone that has these tools.

In the green paper, the Minister laid out an agenda to get to NHI in 15 years, starting now with a series of pilot projects which turn out to be badly under-financed -- so meaningful lessons from them may be hard to realize. Just like in the US, the fight over financing -- who will have to pay what -- will be the acid test.

Sadly, South Africa has been one of the few nations in the world that has seen some key health indicators decline over the past decade, the legacy of a clumsy response to the devastating HIV/AIDS epidemic by Nelson Mandela's successor, Thabo Mbeki. Mbeki's successor, Jacob Zuma, is facing re-election in 2014, and faces in-party opposition. National health insurance was an early priority for Mandela's government until it realized that the final years of white minority rule had left the nation's coffers depleted.  Making it finally happen would be an important legacy for President Zuma.

It is revealing to talk with so many health system leaders and experts about their experiences during the apartheid years, how they went from being resistance fighters to health system leaders. Some of them worry about the younger generation that lacks memories of what it took to claim this society for all of South Africa's people. Though the struggle to achieve national health insurance will be nothing like the struggle to defeat apartheid, it will require deep commitment and skill. Definitely worth watching.

Nelson Mandela is not in view much these days at age 94.  His words, taken here from his memorable autobiography, Long Walk to Freedom, offer inspiration for today's challenges:

“I am fundamentally an optimist. Whether that comes from nature or nurture, I cannot say. Part of being optimistic is keeping one's head pointed toward the sun, one's feet moving forward. There were many dark moments when my faith in humanity was sorely tested, but I would not and could not give myself up to despair. That way lays defeat and death."

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About the author

John E. McDonough is a professor of practice at the Harvard School of Public Health. He is the author of the book “Inside National Health Reform”, published in 2011 by More »

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