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


National Health Insurance Policy towards Universal Health Coverage

Executive Summary




1. This White Paper lays the foundation for moving South Africa towards universal health coverage (UHC) through the implementation of National Health Insurance (NHI) and establishment of a unified health system. The move towards Universal Health Coverage (UHC) through implementation of NHI is derived from the following: The Reconstruction and Development Programme (RDP); the Constitutional mandate based on the Section 27 of the Constitution; the 1997 White Paper for the Transformation of the Health System; and Vision 2030 of the National Development Plan Vision 2030.


2. South Africa aims to make significant strides in moving towards UHC through the implementation of NHI based on the principle of the Constitutional right of citizens to have access to quality healthcare services that are delivered equitably, affordably, efficiently, effectively and appropriately based on social solidarity, progressive universalism, equity and health as a public good and a social investment.


3. Moving towards UHC is also guided by several international frameworks of the United Nations multilateral system such as Sustainable Development Goals (SDGs) 2030 and in particular SDG 3 as well as the World Health Organisation (WHO) frameworks on moving towards UHC with health equity and the six pillars of the WHO's health systems strengthening framework. Achieving UHC will contribute significantly towards realising the vision of a long and healthy life for South Africans.


4. The White Paper on NHI recognises that good health is an essential value of the social and economic life of humans and is an indispensable prerequisite for poverty reduction, sustained economic growth and socio-economic development. To that effect, the critical role played by Social Determinants of Health (SDH) in contributing towards improved health outcomes and a long and healthy life for all South Africans is recognised. This requires a multi-sectoral approach of addressing SDHs. NHI aims to transform delivery of healthcare services by focussing on health promotion, disease prevention and empowered communities. A multi-sectoral National Health Commission will be established to address non-communicable diseases.


5. National Health Insurance will transform the financing of healthcare in pursuit of financial risk protection, by eliminating fragmentation, ensuring technical and allocative efficiencies in how funds are collected, pooled and used to purchase services, thus creating a unified health system that will move closer to the goal of UHC and SDG 2030.


6. National Health Insurance will extend population coverage, improve the quality and quantity of services that the population will be entitled to, as well as provide financial risk protection to individuals and households whilst reducing the direct costs that the population will be exposed to when accessing healthcare. This will protect individuals and households from out-of-pocket expenses and financial catastrophe related to healthcare.


7. Transforming the health care financing system also requires changing how revenue is collected to fund healthcare services and, even more importantly, how generated funds are pooled and how quality services are purchased. The key focus of the NHI reforms is therefore to create a single, publicly owned and administered strategic purchaser that will actively purchase healthcare services on behalf of the entire population from suitably accredited public and private providers.


8. To successfully implement NHI requires that an NHI Fund must be established through legislation. The sources of revenue for the Fund will be through a combination of pre-payment taxes derived from general taxes and complemented by mandatory payroll and surcharge taxes. The Fund it will pool funds and strategically purchase services on behalf of the population to achieve income and risk cross-subsidisation whilst improving the efficiency in purchasing of comprehensive personal health services.


9. Comprehensive healthcare services that are delivered based on scientific evidence will require a strengthened and reorganised health care system. The health care system will be reorganised in the areas of strengthening primary health care (PHC) including PHC re-engineering, hospital services, and EMS, improving leadership and governance in the health system through reforms to the management and governance of clinics, districts and hospitals. The Office of Health Standards Compliance (OHSC) will oversee certification of health care providers and health establishments to ensure they meet quality standards. The provision of healthcare services will be through an integrated system involving accredited and contracted public and private providers.


10. Strategic purchasing requires that health care providers are accredited based on stipulated criteria and in contracting these providers, alternative reimbursement strategies such as capitation for PHC services and DRGs for in-hospital services are applied. Strategic purchasing requires robust information systems to register and monitor utilisation, and mitigate corruption and fraud. Health Technology assessment and procurement systems must ensure that access is improved whilst also delivering healthcare services affordably, based on scientific-evidence and coste-ffectively. It is important for the sustainability of NHI that both supply and demand side measures are put in place. These may include interventions such as gate-keeping, implementation of clinical guidelines and protocols and a strong referral mechanism.


11. The population will be registered and issued with a unique identifier linked to the Department of Home Affairs identification system to enable users to access health care services. Vulnerable population groups such children, women, the elderly and people with disability will be prioritised for registration and delivery of services. The population will access services closest to where they live and the healthcare services will be portable.


12. Equally important, is that NHI requires the establishment of strong governance mechanisms and improved accountability for the use of allocated funds. The introduction of NHI will transform the current intergovernmental fiscal arrangements and relations as well as the current medical scheme environment to address technical and allocative efficiency. Once NHI is fully implemented, medical schemes will transform to providing complimentary cover. Other Social Security Funds such as the Road Accident Fund, Compensation Commissioner for Occupational Diseases in Mines and Works Act (ODMWA) and the Compensation for Occupational Injuries and Diseases Fund will transform so that funding for personal healthcare will be consolidated into the NHI Fund to prevent double-dipping.


13. Implementation of NHI will therefore require amendments to related existing legislation and enactment of new laws to ensure that there is not only legislative alignment but also policy consistency across government departments and spheres of government.