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Why an NHI is necessary

The South African private healthcare system is in a time of review and reformulation. The Health Market Inquiry (HMI) and National Health Insurance (NHI) White Paper have spelt out the failure of the private sector to make affordable quality healthcare available to large segments of the country. Faced with the prospect of medical schemes dissolving under the proposed NHI, however, people are concerned that their access to care will decline.

“Private healthcare is unaffordable. It was developed without adequate planning and supply side regulation. Nobody is held accountable for the management of cost or the quality of outcomes,” says physician Dr Brian Ruff, an industry expert and the founder of integrated care company PPO Serve. “South Africa has a very hospital centered system, so much care happens unnecessarily in a hospital bed that could be done in the community.”

For users of private healthcare services, this translates into escalating scheme premiums and benefit cuts, which has resulted in gaps in necessary care, especially for complex medical problems. The system also ignores the management of social factors that impact health. According to Ruff, the solution includes protecting risk pools and strengthening the active purchaser role of schemes, which will better manage the way medical care is supplied. He agrees with the focus in the NHI White Paper on strengthening primary healthcare services in local communities, based on integrated and multidisciplinary primary care teams.

In their current form, schemes’ risk pools are shrinking, leaving more elderly and sick members than healthy ones; “When premiums are too high, families only purchase medical aid for the elderly and the sick. Treatment for these individuals’ costs schemes a lot of money,” says Ruff.

A functioning and sustainable healthcare system requires cross-subsidisation from healthy new entrants. Re-establishing risk pools requires the regulation of insurance products that selectively cover low-risk groups, a step put forward by the new demarcation regulations, which will come into play in 2019. Ruff argues for mandatory scheme membership and the purchasing of medical services at a population level, as in the NHI White Paper; “Community and solidarity over individualism lies at the heart of functioning healthcare systems, this is well known around the globe.”

The proposed NHI will introduce a single fund that will also support the purchasing of medical services for the country. Regional contracting units that are familiar with the needs of their population will review and purchase doctors’ and hospital services. While it is not yet clear if these will be public or private entities, Ruff likes the structure put forward by government; “It will create real competition and accountability. Providers will contend for limited-term contracts, based on the service and value that they deliver to patients, as well as their ability to best meet the needs of the community as a whole.”

Ruff co-founded PPO Serve with his colleague Riedwaan Jabaar in 2015 to develop integrated clinical consortia in the South African context. Practitioners form multidisciplinary teams that contract with purchasers, based on the value that they deliver to their patients. The pilot project in Alberton, Pretoria has been running for a year, and is showing good results for patients, clinicians and schemes. PPO Serve has also recently launched The Birthing Team, which provides safe and affordable maternity care.

Ruff believes that the best solution requires legislating benefits that supports new integrated models of care that deliver effective comprehensive clinical and social care, and that compete for patients and contracts on the outcomes they produce.



 Distributed by Be-cause Integrated Communications

Emma Proctor

021 447 1082 / 072 930 4412

 Distributed on behalf of PPO Serve

Founder: Dr Brian Ruff


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