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National Health Act, 2003 (Act No. 61 of 2003)


National Health Insurance Policy towards Universal Health Coverage

Chapter 7 : Financing of NHI

7.10 Containing costs and improving management

7.10.3 Public management and financing reforms


266. The introduction of pricing and reimbursement mechanism and other regulations (such as mandated generic drugs substitution) in pharmaceutical markets internationally has proved an effective policy lever to contain health expenditures. Other public management reforms include enhancing the role and quality of health technology assessment (HTA), promoting efficiency in health system funding allocation and freeing up resources, thus attenuating pressures on the public budget.


267. In respect of the employment of health professionals, there are also administrative improvements to consider. There is concern that limited private practice arrangements are abused, resulting in absence from duty or negligence of care in some public health facilities. But there are also examples of well-managed arrangements that bring specialist capacity into the public service, sometimes associated with teaching or consultancy duties, while allowing for private practice on reasonable terms.


268. In preparing the ground for NHI, there is a clear imperative to improve the administration and effectiveness of public health delivery, to draw on lessons of current practice and to pilot innovative approaches to partnering between public and private service providers. In the longer term, NHI reforms should narrow the gap between public and private facilities in terms of quality of care, coverage, costs and accessibility. Bridging this gap is important for increasing patient choice, achieving efficiencies and establishing cost-effective arrangements that take advantage of both public and private sector capacity.