OBG talks to Dr Aaron Motsoaledi, Minister of Health

Dr Aaron Motsoaledi, Minister of Health

Interview: Dr Aaron Motsoaledi

Private medical insurers contend that an ageing population and rising medical costs necessitate the escalation of premiums. Is this claim justified?

DR AARON MOTSOALEDI: In 2010 total premiums for medical aid schemes stood at R84.7bn ($10.3bn), of which R30bn ($3.7bn) went to private hospitals and R19bn ($2.3bn) to specialists. What these groups charge has a significant impact on medical aid prices. A public enquiry by the South African Human Rights Commission uncovered that the escalation of private health care prices coincided directly with the market concentration that began to take shape in 1998. At that time, the number of private hospital groups reduced, crowding out smaller competitors. It is a basic business principle that the fewer players in the market, the easier it is to collude and control prices. As medical aid schemes are charged more by private hospitals and specialists, they will continue to increase their premiums and reduce benefits. We admit that the public system is lacking in quality and must be dramatically overhauled and improved. But the private system, while high in quality, is not sustainable at these prices and must also be reformed.

What is the rationale behind the introduction of the National Health Insurance (NHI) scheme?

MOTSOALEDI: In South Africa 8.5% of GDP goes towards health care, which is above the 5% recommended by the WHO. However, we are underperforming in terms of results. This is a reflection of unequal distribution as 5% of expenditure is in private hands and directed towards the 8m people who are members of medical schemes. The remaining 3.5% is allocated to the public and is shared among the 84% of the population unable to afford private coverage. There is a constitutional obligation for the state to provide universal health care and ensure that no person is refused emergency medical treatment. Unfortunately, this is not the case currently. The NHI, as a system of universal health coverage, will work to ensure that the distribution of national spending on health care is more equitably shared.

How will the NHI be funded and will there be opportunities for private sector participation?

MOTSOALEDI: Governments all over the world finance programmes with taxes and medical aid schemes in South Africa are already subsidised by the government in multiple ways. So when we now say that these same taxes should subsidise medical coverage for the poor who are not able to afford medical aid or are not fortunate enough to receive it through employment, I am unsure why people are up in arms. The NHI is not a competition between the public and private sectors. To be a success, it must be sustainable and there are two core conditions for achieving this. On the part of the government, the quality of health care in the public sector must be overhauled and dramatically improved. At the same time, private health care prices must be reined in. If the NHI is to be subject to exorbitant prices by the private sector, it will not survive.

What has been done and remains to be done to address the shortage of health care practitioners?

MOTSOALEDI: We are currently lacking an adequate number of nurses and doctors. Nursing in our country was hurt by a policy in 1984 that declared that primary nursing training must occur at university level, rather than at bedside wards and hospital colleges.

The total number of nurses dropped because many lacked the financial means to go to university. To make up for these lost years, we have set aside R1.2bn ($146m) to renovate 122 nursing colleges located within hospitals over the next three years. Over the past decade, we have produced 1200 new doctors per annum and we want to increase this figure three-fold.

We will be opening a ninth medical school and are incentivising the other eight schools to accept greater enrolment levels. In South Africa the “brain drain” of medical professionals is still a major issue. The WHO recently made a code of practice to discourage states from actively recruiting doctors from developing countries and countries with shortages of health workers.

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The Report: South Africa 2013

Health chapter from The Report: South Africa 2013

Cover of The Report: South Africa 2013

The Report

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