Key issues facing the health sector in the next five years
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Key issues facing the health sector in the next five years. Thabo Rakoloti Director: Public Private Partnership National Department of Health The BHF Annual Southern African Conference, 2007. Presentation Outline. Legislative Framework Policy Context Key strategic challenges

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Key issues facing the health sector in the next five years

Thabo Rakoloti

Director: Public Private Partnership

National Department of Health

The BHF Annual Southern African Conference, 2007

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Presentation Outline

  • Legislative Framework

  • Policy Context

  • Key strategic challenges

  • Focus on key policy areas

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Legislative Framework

The Minister of Health has the responsibility “to prioritize the

health services that the state can provide taking into

consideration health needs and resources

available” (S4 (1)(e)

and to “Prescribe mechanisms to enable a co-coordinated

relationship between private and public health

establishments in the delivery of health services”


The Constitution

of the Republic

of South Africa

“everyone has the right to have access to health

care services, including reproductive health care”


“state must take reasonable legislative and other measures, within its available resources,

to achieve the progressive realisation of each of these rights” S.27(2)



Health Act,


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Burden of disease



  • Indigent

  • Low-income

  • marginalised


  • Infectious

  • Communicable

  • Chronic

  • Medical

  • Nursing

  • Pharmacy



  • Infectious (na)

  • Communicable (na)

  • Chronic (reduced)

  • High income

  • Good risks

  • Poor risks (decrease)

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Key Strategic Challenges

financial, human and other resources between the

public and private sectors, relative to the populations

they serve

health care resources available to different socio-economic groups within the population

Growing maldistribution of

all health care resources between and within provinces, which has been increasing over the past few years

Fragmentation of the health system, based on separate financing and provision arrangements for different socio-economic groups

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Challenges with current financing system

Inadequate Pooling of resources:

  • Private sector: covers 7m people

  • Public sector: covers 39m, of which 7m fall outside means test

  • Individual households: Out-of-pocket payments

  • 7m low income people who cannot afford medical schemes, but do not qualify for free public services, so pay out of pocket

  • Out of pocket payment is the most regressive form of health financing

  • Inequity: public/private sector

  • Inefficiency: excessive expenditure on hospitals

Inadequate financial risk protection

Inequity and inefficiencies in financing

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Context: Healthcare Financing, 2006

Public sector

R52 billion

Serves38 m

Private sector

R66 billion

= R1 368 pp

Serves 7 m

= R9 428 pp

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Context: Healthcare Provision in 2004,

Professional category


Public sector

Estimated dependants

34 611 781=82%

Private sector

Estimated dependants

7 597 709= 18%

Public: private ratio

General practitioners

19 729

5 398=27.4%

14 331=72.6%


Medical specialists

7 826

1 938=24.8%

5 888=75.2%

1: 3,04

Dentists (including specialists)

4 269


3 953=92.6%

1: 12,51


4 410

1 047=23.7%

3 363=76.3%

1: 3,21


3 406


2 943=86.4%

1: 6,36

Occupational therapists

1 986


1 598=80.5%

1: 4,12

Speech therapists and audiologists

1 388


1 269=91.4%


Dental therapists






3 808


3 586=94.2%


Distribution of Health Professionals in the South African Health Care System (2004)

Source: Health and Health Care in South Africa (2004)

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Key Issue: 1

Partial Social Security

Universal Social Security

Pillar 1:

  • Universally available basic benefit for all citizens and specified classes of legal resident

  • Contributory environment over-and-above pillar 1, characterized by strong mechanisms to ensure social solidarity:

    • Income-based cross-subsidies

    • Risk-related cross subsidies

    • Mandatory participation

  • Discretionary social security over-and-above

  • minimum levels regarded as essential

Pillar 2:

Pillar 3:

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Key Issue: Pillar 2

Out of Pocket Spending


X-subsidy from low to high risk

X-subsidy from rich to poor



Low risk

High risk

Low risk

Health risk


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Specific Issue: Access to Private Health Care

  • The MSA sought to promote non-discriminatory access to privately funded health care through –

    • Open enrolment

    • Community rating

    • Protecting a core set of benefits from arbitrary attrition

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Specific Issues: Access to Private Health care

  • The major objective has been met but there are still concerns involving the following:

    • very limited growth in overall number of covered lives

    • open enrolment for high risk individuals being frustrated through indirect discrimination

    • inappropriate benefit design

    • potential fragmentation of risk pools

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Reform of the Medical Schemes Industry

Legislative Development from 2007- Medical Schemes Amendment Bill

  • Introduction of the Risk Equalisation Fund

  • Restructuring of the Benefit design

  • Strengthening of the Governance framework

  • Introduction of the general framework for low income products

  • The Bill will be tabled in Parliament before the end of 2007

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Contribution Protection Mechanisms?

  • As a result of the escalation of the cost of health care, we are in a process to:

  • Create a statutory framework for effective pricing negotiations between funders and health care providers.

  • Extensive consultation as soon as clear proposal are in place.

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Health Technology Appraisal

  • Draft Regulations on Health Technology in 2008/9

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Public Private Partnerships

- Build Operate Transfer where the private sectors builds and operates a new facility for a given period of time and then transfer it to the public sector at the end of the concession period

- Build Transfer Operates that is where the transfer of the facility to the government would take place as soon as the construction is completed, rather than at the end of the concession period and

  • Revitalise Operate and Transfer where the private sector could rehabilitate the existing public health facilities at its own risk, and then operates and maintains the facility at its own risk for a given period

  • We are working with the National Treasury to prepare concrete proposals for consultation.

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Infrastructure v/s Service Delivery: PPPs




Indicative favourable trajectory combining both infrastructure dev’t and clinical services

Infrastructure development





Delivery of clinical services

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Achieving Millennium Dev’t Goals

  • The Millennium Development Goals (MDG’s) have set clear targets and goals for eradicating poverty and related human deprivations.

  • The MDGs include 8 goals, 18 targets and 48 indicators: 3 of the goals, 8 of the targets, and 18 of the indicators relates directly to health

  • Creating a standard reporting and evaluation framework for the public and the private health sector.