NHI vs. PPP: picking a path to universal healthcare

Where election season coincides with widespread poverty and inequality, it’s perhaps to be expected that the issue of National Health Insurance (NHI) will be a talking point. On paper it makes sense: as Health Minister Aaron Motsoaledi put it, the idea is to equalise healthcare so that it is available to all based on need rather than socioeconomic status.

Nobody can deny many South Africans are living in a cycle of dire need. Via the healthcare route, this becomes a vicious cycle, where the poorest citizens have the least access to quality healthcare. Add to this the burden of HIV, tuberculosis and the rising tide of non-communicable diseases, incl¬¬uding cancer – and you have something of a perfect storm; a continual slowing of productivity. If one factors in a host of broken systems surrounding healthcare – poor transport, education, administration and drug stock-outs – the magnitude of the problem increases fourfold.

Minister Motsoaledi has emphasised in particular that 80% of the medical specialists in the country are servicing only a fifth of the population.

Although South Africa spends roughly 10% of its GDP on health – a large amount relative to other countries (India, low on the scale, spends 1%, compared to China at 3%), the allocation of funds is a challenge.

Inequality poses an appreciable problem both to government and those in the healthcare industry, including the funders. How does one solve it? NHI has been put forward as a means to assist the under-resourced, but there are some funding hurdles that need to be overcome. Even in the UK, where the employed subsidise the unemployed fairly successfully, funding of a national health system remains problematic. In South Africa, where the unemployment rate has just reached a 12-year high, the pool of potential subsidisers is simply too small.

So how are we to assist those who cannot access the medical care they need? A possible answer lies in more efficient partnerships between funders and providers, and between the private and public sectors. ICON, the Independent Clinical Oncology Network, is one organisation that has managed with some success to bridge the gap between funders, patients and clinicians. On some levels it is seeking to do the impossible; to expand the number of patients being treated by private healthcare, thereby reducing the burden on the state – one way to improve outcomes for both patients and providers. By reducing private healthcare costs, they have succeeded in bringing an estimated 20% more oncology patients into private care. One of the ways they do this is by limiting the variation in clinical treatment protocols, ensuring greater consistency in prescriptions, lower costs, and better patient outcomes overall. Further, ICON negotiates with stakeholders to arrange drug imports where necessary. Ultimately, the result is more productive relationships and lower costs to the funder of care.

This is a model that can work in other areas of medicine. ICON’s approach has been widely praised: at the 2015 World Innovation Summit for Health (WISH) in Doha, Qatar, it was featured in a prestigious report on how cancer care can be made more affordable without compromising on quality. More importantly, ICON also illustrates the value of multi-disciplinary partnerships.

Public-private partnerships are a viable option in healthcare. In Kenya, this has worked particularly well. “PPPs combine the skills and resources of both the public and private sectors in new ways,” the Kenya Healthcare Federation explains, “through sharing of risks and responsibilities. This enables governments to benefit from the expertise of the private sector, and allows them to focus more on policy, planning and regulation.” A study by Evanson Kiambati Minjire on the performance of PPPs in healthcare notes that while this is an evolving area, it’s also a growing phenomenon, particularly in the developing world. Currently, policymakers don’t have a repository of ‘best practices’ to draw on, but Minjire’s study notes that major factors influencing the success of such partnerships are, first and foremost, accountability and a regulatory environment, only then followed by project funding. Curiously, it is the management of the project, rather than the money, that affects its success most of all.

The advantages of a PPP, notes the World Bank, are normally rooted in the need to improve the operation of public health services and facilities, and to expand access to higher quality services. PPPs provide the opportunity to leverage private investment for the benefit of public services, and the potential to formalise arrangements with non-profit partners who play important roles in public services. Lastly, PPPs give state resources more potential partners as the private healthcare sector matures.

The PPP model has already been used in Southern Africa: the Lesotho Queen Mamohato Memorial Hospital and Clinics were financed, constructed and operated privately, and clinical/ non-clinical services were provided privately; meanwhile the state reimbursed the operator for capital and recurrent costs and provided the relevant public buildings. It is critical to understand, here, that PPPs are not privatisation. They are a joining of forces for the benefit of healthcare. While the Mamohato hospital was questioned in an Oxfam report for its long-term cost, it has also consistently produced better patient outcomes than its predecessors, and its directors have slammed the Oxfam report for allegedly inflating the estimated costs in its report. The Lesotho budget speech for the fiscal year 2014-15 corroborated this. So far, the Lesotho case supports that of Kenya, suggesting PPPs may work in Southern African healthcare as well.

Social impact bonds have also been used to some effect, not only in the healthcare industry. In 2015, the £1.65m Ways to Wellness programme was launched by Bridges in the UK, providing up-front funding for preventive interventions by specialist providers and aiming to improve health outcomes for some 11,000 people. And earlier this year, the Western Cape Department of Health (WC DoH) and Department of Social Development (DSD) set aside R25 million to invest in three SIBs in partnership with the Bertha Centre for Social Innovation and Entrepreneurship at the UCT Gradaute School of Business aimed at improving the health, nutrition and developmental status of pregnant women and children up to five years who live in low income communities.

Of course, the healthcare system cannot be tackled in isolation. It is also necessary to look at the health of patients holistically: community support, transport, the availability of fieldworkers, and any number of factors that may influence patient compliance, such as the temptation to sell prescription medications to recoup transport costs or even make ends meet where there is no employment. Considering medication deliveries such as those successfully implemented in some mining communities may ease the burden of administration on hospitals and the burden of time, cost and transport on patients, increasing compliance and decreasing the costs of medical care for all long-term.

Overall, there is no need for resistance to seeking more innovative approaches to healthcare – including public-private partnerships. One might argue that renewable energy is an outstanding example of the potential success of the model, which will ultimately be a healthcare innovation – a new approach to solving a problem everybody in South Africa agrees needs to be tackled urgently. There are many routes to a solution, and NHI should not be regarded as the only national highway as it may be complimented by additional routes. The advantages of combining state infrastructure and private resources are glaring. It is not, at present, a perfect system. But the only way to perfect it is to get started.

Snyman is the CEO of ISIMO Health – operational and administrative body of ICON.

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