There is no health-care funding model in the world that can right the wrongs of SA's past while upholding the high standard of care that exists in the private sector.
But lessons can and must be learnt from the way other countries have structured their health systems, bearing in mind SA's unique history and vast income disparities. This is the view Mx Health executive for business development Susan Mynhardt expressed in the latest Mx Health Quarterly Healthcare Review.
Mynhardt points out that with a total annual health-care expenditure of US$652/person, SA spends more than any other mid-level country ranked according to the United Nation's Human Development Index (HDI).
However, this aggregate expenditure masks huge discrepancies within SA between those able to afford world-class private care and everyone else who has to use the public health system.
In SA, 5% of GDP is spent on private health care to cover 7m people, but only half this amount - or 2,6% of GDP - is spent on public health care that caters for the other 36m.
The dichotomy is stark: SA's private health-care sector is rated among the top five in the world, based on quality and cost performance indicators, but according to Mynhardt, 90% of childhood deaths could be prevented by improving access to proper sanitation, safe water and nutrition.
Government attempted to provide a basic service to all by focusing on primary health-care provision and by providing free public health care to children under six, pregnant women, and the disabled. However, years of underinvestment in the public sector has resulted in crumbling infrastructure in many places; restrictions on services such as dialysis; poor health outcomes; an overburdened and demotivated workforce and hence, skills flight.
Pandemics such as HIV and TB have further contributed to the crisis.
"More and more of our qualified professionals are being lured to other countries by the promise of better pay and better conditions," says Mynhardt. "At least 2 114 local nurses left for the UK during 2001."
In the private sector, benefits shrink while costs tend to escalate each year, typically exceeding consumer inflation. "Part of the problem is that the pool of insured people is too small to sustain services at a reasonable rate of increase," explains Mynhardt.
"We have to accept that as long as we are unable to increase the insured population and bring new more workable health-care models to the market, costs will continue to rise unreasonably, services for both segments of the population will become less satisfactory, and we'll continue to lose professionals."
In the search for solutions abroad, Mynhardt has come to the conclusion that all health-care systems are in crisis. Health-care expenditure is rising in the West as years of underinvestment come back to haunt the welfare governments of the UK and Western Europe. The ageing of populations, coupled with the advent of expensive new life-prolonging therapies, drives the cost escalation.
Germany has the highest ratio of health-care expenditure to GDP in the world, with 8,1% of GDP being spent in the public sector and 2,7% in the private sector. Despite this, the population complains of substandard care. It is partly a result of anticompetitive health-care practices and underservicing. The latter results in poor health-care outcomes, which ultimately lead to additional costs.
In the UK, where about 80% of health care is financed by taxation, the National Health System (NHS) has also failed to cope with the ever-increasing demand for care, leading to the rationing of elective procedures.
"SA undoubtedly has much to learn from developed countries, particularly from their mistakes. However, our situation is different from theirs," says Mynhardt.
Developed economies have substantially higher HDI scores than SA, which is ranked a lowly 119 out of 177 countries. SA is also ranked only 52 out of 95 developing countries in terms of the Human Poverty Index, between the Democratic Republic of the Congo (53) and India (48).
"Nowhere else in the world do we have such extremes between rich and poor as in SA," she says. "Running a health-care programme along the lines of developed, wealthier economies would be unwise."
Absa Healthcare Consultants MD Louis Botha concurs. Speaking from the floor at the Mx Health Quarterly Healthcare Review presentation in Johannesburg earlier this month, he said that the problem was essentially one of economics.
"The First World countries that have successful social health systems all have high per capita incomes, a strong middle class, low unemployment and homogeneous populations," he said.
"However, the SA economy is not growing fast enough to create the vibrant middle class and tax base that is required to make social health insurance (SHI) work."
Mynhardt feels that SA needs a uniquely SA model that strikes a balance between the private and public sectors. SA's proposed SHI model attempts to do this. Though it contains elements that can be found in many health-care systems around the world, it is a unique home-grown response to a particular history and set of circumstances.
The health department's envisaged SHI model has three basic layers. At the bottom, the poor, unemployed, informally employed and low-income earners will rely on the publicly funded health system, as is now the case.
In the middle layer, 15m-20m people (40%-50% of the population) will belong to a system of multiple medical aids of which membership will be compulsory for all in formal employment and which will be regulated.
Above that, people of means will still be allowed to buy up to gain more comprehensive private medical aid cover. As such, SA's envisaged SHI model is comparable to the system that prevailed in much of Western Europe in the 1950s as well as in some Latin American countries such as Chile and Mexico today.
The step-by-step process of reforming the medical aid industry - which commenced five years ago, with the introduction of open enrolment and community rating, and culminated in June this year with the creation of the Risk Equalisation Fund (REF) - has drawn heavily on the experiences of Belgium and Ireland.
By learning from their mistakes, SA has managed to leapfrog Ireland in the development of the REF. According to Mynhardt, Ireland has taken 11 years to get to the same place that SA reached in June when the REF was launched.
Though progress is being made, the next phase of implementation towards SHI has been delayed indefinitely due to resistance from the national treasury and Cosatu.
Cosatu rejects the plan to make medical aid compulsory for all informal employment since the cost of even the most basic private cover is too expensive for low-income earners.
Treasury is also reluctant to pay tax subsidies into the new REF in an environment where private health-care costs seem out of control.
As an interim measure, a task team is working on ways to make low-income medical schemes (Lims) more affordable, but it could take several years before the sceptics are convinced and SA can move towards the goal of mandatory cover.
Mynhardt is ever mindful of the bigger picture - health care is a social issue and in SA care is often stymied by people's lack of access to the most basic services: clean water, nutrition, shelter and transport. She feels that seeing the problem in these terms will help SA arrive at a more holistic solution.
