Both the public and private sectors play significant roles in health care in South Africa. The country suffers from health problems commonly associated with extreme poverty, such as high maternal mortality rates, yet also boasts some of the world’s most elite facilities and doctors. Another trait that marks the health care challenge in the country is the disease burden: HIV and AIDS are the most commonly cited epidemics, but the country’s health care professionals have identified several others in this area.
RAISING THE STANDARDS: South Africa’s history before, during and after apartheid has featured large-scale attempts to address health issues, and in 2012 talk in the sector will be dominated by yet another. The country currently offers universal health care via hospital access. But this standard of care is far lower than what those who can afford private care have access to, and a major part of the country’s post-apartheid mission is to eliminate the gap between the rich and poor, and provide a better future for the historically less fortunate. The Department of Health is embarking on a multi-decade plan called the National Health Insurance (NHI) to provide better health care for citizens. The idea is to eventually ensure a higher standard of care for all South Africans, to eliminate the disease burdens complicating the challenge and to move from a system based on curing health problems to one in which prevention plays a larger role (see analysis).
The government’s full vision is not expected to be realised until 2025, but 10 pilot projects funded by a R1bn ($122.4m) conditional grant were initiated in April 2012 in OR Tambo in the Eastern Cape, Vhembe in Limpopo, Gert Sibande in Mpumalanga, Pixley ka Seme in the Northern Cape, Eden District in the Western Cape, Dr Kenneth Kaunda in North West province, Thabo Mofutsanyana in Free State, Tshwane in Gauteng, and uMzinyathi and uMgungundlovu in KwaZulu-Natal. A large-scale inventory of the sector will also continue throughout 2012. The lack of comprehensive data is a common theme in the country, and an impediment to effective reform. An example specific to health care is that death certificates do not always mention whether the deceased was HIV-positive or infected with AIDS, said Debbie Bradshaw, director of the Burden of Disease unit of the South African Medical Research Council, a parastatal research organisation.
COST OF CARE: Health care spending in recent years has usually comprised just over 8% of the GDP. About half of that total comes from private sector spending, which covers only a minority of the population. This leaves public spending just below the minimum level of 5% that is recommended by the World Health Organisation (WHO). According to a fiscal review by the National Treasury, 42m people are reliant on the public system and 8.2m pay to use private services.
Of the government’s total budget in 2010-11, health care received a 14% share. Expenditures reached R102.5bn ($12.55bn) in the 2010/11 fiscal year, and were projected at R127.bn ($15.54bn) for 2011/12. Since 2007-08, the average year-to-year increase is 7.5%. According to an infrastructure report by the South African Institution of Civil Engineering (SAICE) from 2011, the cost of replacing the current public sector health care infrastructure would be R200bn ($24.48bn).
REGULATION: The Department of Health is the main relevant government agency overseeing the sector, but a regulatory overhaul is expected. Some of the new and revitalised bodies on the cards include the Office of Health Standards Compliance, the creation of which was called for by the Department of Health. Public health infrastructure is the joint responsibility of the Department of Health, the Department of Public Works and the health departments of the nine provinces. The Health Data Advisory and Coordination Committee was created in 2010 to address the information shortage.
Precise figures as well as statistics in multiple categories are not so comprehensive. A national database called the District Health Information System is considered incomplete and inaccurate, and the last large-scale study on the national infrastructure was in 1995-96, according to SAICE. WHO’s South Africa office has also noted the poor quality of data in its reporting on the country. “Routine data was submitted to WHO only twice in 2009, and surveillance data (weekly and monthly) was seldom on time,’’ according to a WHO 2009 annual report, the most recent report available. However, as part of the fledgling NHI effort, a comprehensive audit of hospitals is under way, and facilities that want to be able to bill the NHI for procedures will have to meet standards in categories that include medicine availability, cleanliness, patient safety, waiting times and infection control.
The country is well aware of the economic imperative to discuss health care and make the necessary reforms. The health minister, Aaron Motsoaledi, said in July 2011 that HIV and AIDS are to blame for 30% of workplace absenteeism and tuberculosis 3.7%. Human Sciences Research Council’s CEO, Olive Shisana, meanwhile, told local media that the NHI would boost the economy because businesses would have lower health care costs and could therefore reinvest the savings in their operations. Over time, each additional year of life expectancy adds 4% to the GDP, according to a Department of Health policy paper outlining its plans. Life expectancy is currently 54 for males and 59 for females, according to Bradshaw, and the country’s goal is to add two years to both by 2014.
PUBLIC SECTOR: In addition to accounting for almost 15% of public spending, the health care sector provides jobs for more than one in five public sector employees. In the post-apartheid era, the government’s emphasis has been on capital expenditure to evolve the health care system into one designed to treat all of the country’s 55m citizens.
One constraint has been the ability to spend all budgeted money. As an example, the Hospital Revitalisation Grant of 2009, which has been considered among the more successful government programmes, actually reported R813.6m ($99.58m) less in spending than the total allocated. Maintenance is needed across the board, according to SAICE, as the focus on building new hospitals has come at the expense of keeping existing facilities in good condition. Despite the problems, however, the system manages to provide a basic level of care for all citizens.
In the 2011-12 budget, R2.9bn ($354.96m) was earmarked for improving facilities, and R1.4bn ($171.36m) for district-level maternal and child health services. R1.2bn ($146.88m) was set aside to introduce family health care teams, an attempt to boost prevention efforts by getting people to see health care professionals before they have an ailment that needs treatment.
As a part of the effort to move from curative to preventive care, South Africa recently sponsored a design competition for community centres that would include health and education services as well as retail space and room for other private enterprises. The winner was Farrow Partnership Architects of Toronto, which said the hope is to have prototypes built by 2014. The model is envisioned as single-storey buildings of about 1672.25 sq metres and adjustable to meet the differing needs of cities, townships and rural areas.
Human resources are also a major necessity for progress. A decades-long brain drain has resulted in many doctors now living and working elsewhere, and the average age of those who are employed domestically is 55. There are also shortages of nurses, specialists and administrators. As part of the drive to strengthen the public health services to prepare for the NHI era, all CEOs of current public hospitals have been asked to reapply for their jobs, Bradshaw said. Those who are not qualified are unlikely to be rehired.
DISEASE BURDEN: According to a 2011 Department of Health publication, South Africa has 0.7% of the global population but 17% of HIV-infected people. The rate of prevalence is 23 times the global average. In 2009, the number of patients receiving antiretroviral treatment was 1.1m, and the target for 2014 is 2.5m. The number of public facilities providing the treatment has jumped from less than 500 to about 2000, according to the South African National AIDS Council.
The mortality rate appears to have peaked in 2006, when an estimated 226,803 deaths of confirmed AIDS victims were recorded, according to the Actuarial Society of South Africa, which collaborates with government and parastatal authorities to develop statistics and projections. The number fell to 201,992 in 2008, the most recent year for which figures are available. One sign of progress is that the rate of mother-to-child transmission has fallen significantly from 10% to 3.5%, according to the Medical Research Council.
The rate of infection, however, is not declining, said Bradshaw, and that is despite campaigns to increase awareness and to encourage people to get tested. “Treatment has started to reduce the mortality burden,’’ she said. “But the prevalence, in particular in younger women, was not showing signs of declining as of 2010.’’ Domestic production of branded and generic drugs is insufficient to meet demand, which is expected to grow, especially if the NHI is successful in bringing more people into the system at the preventive level. For the antiretrovirals needed to suppress the HIV virus, currently four importers resell to the government. The cost is approximately R4.2bn ($514.08m) annually, Motsoaledi told local media in February 2012.
“The government is introducing preferential treatment to local producers of pharmaceuticals in an attempt to help revive the sector domestically,” Brian Daniel, the CEO of Pfizer (South Africa), told OBG. “But because of the small production volumes this will not drive down prices or improve competitiveness.”
The government plans to invest some R1bn ($122.4m) in a joint venture between Swiss drug-maker Lonza; the Industrial Development Corporation, a parastatal development bank; and Pelchem, a fluoro-chemicals specialist that is a subsidiary of the Nuclear Energy Corporation of South Africa. The venture will mark the first domestic production of antiretrovirals.
When South Africans speak of the country’s disease burden, however, HIV and AIDS are just one aspect of it. The disease burden is split into three categories, and in the first, HIV and AIDS are grouped with tuberculosis as communicable diseases. Maternal, infant and child mortality are also in this category, which encompasses maternal, perinatal and nutritional diseases, as well. In the second category are non-communicable diseases such as high blood pressure and chronic heart and lung diseases. The third category is injury-related.
Rates of violent conflict and road accidents in South Africa are higher than global norms, representing an additional challenge for the system. To help fight diseases in the latter two categories, Motsoaledi’s department has been advocating for the overall reduction of salt consumption and regulations on alcohol sales.
PRIVATE CARE: Those who can afford to buy private health care in South Africa usually do, as the standard is generally higher. About 16% of the population participates, which comprises out-of-pocket payers and the 16.2% of South Africans who have health insurance, which includes most people employed in the formal economy. The Council for Medical Schemes is the umbrella group for the approximately 100 medical insurance schemes on offer. However, only about 30 have more than 10,000 members. Consolidation has been a trend in recent years, with the number of schemes falling from more than 180 in 2001 as insurers look to achieve economies of scale. Some have collapsed, however, and according to the Department of Health sustainability is a concern going forward.
Private offerings came under criticism in 2011 for surging costs – a 2011 policy paper noted a 121% rise in prices at private hospitals over the past decade and a 120% jump in specialist costs. Contribution rates for medical schemes have doubled over a seven-year period, but without a corresponding increase in access to services. However, it is not the only area in which costs have risen, supporters of the sector say. Dr Nkaki Matlala, the chairman of the Hospital Association of South Africa, noted that food costs have increased by 100% in the same period.
Private hospital networks are also prominent, with the biggest being Netcare. With details of the NHI as yet uncertain, these companies are unclear on their role in the future, although the government has said it envisions plenty of private sector participation.
OUTLOOK: The NHI plan, although not outlined in detail, has the potential to revamp the entire sector, and all options remained on the table. As the hospital audits are completed and the 10 pilot projects that comprise the first steps towards establishing the NHI take effect, more information is due to become available on what is to come. Private-public partnership opportunities are expected and increased domestic production of drugs is a potential niche to be filled.