Mindshift required for improved health care in South Africa

Improving healthcare in South Africa will require not only regulatory change, but also a mindshift from consumers, healthcare professionals and funders, Professor Sharon Fonn of the School of Public Health at the University of the Witwatersrand told the Board of Healthcare Funders conference in Cape Town last week.

Fonn was a member of the Health Market Inquiry (HMI), appointed by the Competition Commission to explore ways of improving competition and ensuring the sustainability of private healthcare.

None of the inquiry’s 2019 recommendations has yet been implemented, although private healthcare is still regarded as key even if the contested National Health Insurance (NHI) system is introduced.

Health care needs to adapt

Fonn said the private healthcare sector, funded by medical scheme contributions that rise by more than inflation each year, is unsustainable because many members can no longer afford it.

The public sector is excellent in some places but is generally falling apart, she said.

In the face of this common threat, the public and private sectors “can and must work together − get out of the courts and get around the table”, she said, referring to court challenges to the NHI Act.

While some structural problems, including the absence of a risk equalisation fund, need legislation, Fonn said certain changes should begin now to prepare South Africa for healthcare reform.

Mindshifts required for change

The HMI highlighted three areas in which South Africans need to change their thinking: social solidarity, purchasing healthcare on the basis of value, and the role of the private sector in achieving access for all, Fonn said.

1. Scheme members don’t understand social solidarity

The HMI hearings showed that many medical scheme members are angry because they pay high contributions and believe they should receive at least as much, or more, in benefits, Fonn said.

This is “incredibly problematic” because it shows that members do not understand social solidarity, the principle underpinning health insurance systems in which the healthy subsidise the sick and the young subsidise the old, she said.

Schemes must explain that younger, healthier members may not get back what they pay in, while older or sicker members may receive more than they contributed.

2. Lack of transparency creates distrust

The HMI found that members do not trust schemes. Instead, they see schemes as limiting their choice, directing their care and standing in the way of excellent health care, Fonn said.

This is partly because schemes are not transparent enough. Members need to understand why schemes create provider networks and why using them can help avoid co-payments.

Schemes struggle to explain this because few are measuring the outcomes of their networks or practising value-based purchasing, she said.

Members should know why preferred providers are selected and understand that these contracts should serve members, not scheme balance sheets, administrators or other stakeholders’ profit margins.

Members and healthcare professionals also need evidence on why essential medicine lists, a scheme's limited formulary and generic medicines can save money and enable cheaper bulk purchasing, she said

Private providers should lead the measurement of healthcare outcomes, Fonn said, because if they do not, it will be forced on them. Trustees should understand their accountability for buying care on the basis of these outcomes.

Consumers often think more care is better care, but schemes must provide evidence showing why this is not always true and why direct access to specialists without referral may not be appropriate, Fonn said.

3. The private sector can help in providing health care for all

Another misconception that emerged from the HMI hearings was that the private sector has no responsibility for ensuring broader access to healthcare, Fonn said.

The Constitution makes government responsible for the legislative changes required to realise healthcare for all, but it does not require government to provide every healthcare service, she said.

Even those motivated by profit would be better off in a more equal society in which wealth is more widely distributed, Fonn said.

To play a meaningful role, however, the private healthcare market must adapt in line with the HMI recommendations.

Health providers paid for outcomes

One of the biggest problems in private healthcare is its reliance on charging a fee for every service instead of every patient successfully treated as this creates a perverse incentive to overservice, Fonn said.

Strategic, or value-based, purchasing funds services with the greatest impact on health. If NHI is introduced, it is expected to include strategic purchasing based on health outcomes, Fonn said.

The conference also heard from Lungile Kasapato, CEO of healthcare management company PPO Serve, who described how value-based purchasing can save money on expensive hospital admissions and specialist costs while shifting spending towards primary and preventative care.

PPO Serve has partnered with the Government Employees Medical Scheme (GEMS) to support general practitioners caring for GEMS members. It helps set up multidisciplinary teams, digital patient management and reporting so GPs and allied healthcare practitioners can coordinate care and treat members proactively.

Savings can be achieved

Kasapato said members with complex needs receive the most intensive services, chronic and at-risk patients get appropriate care, and healthy patients are screened and offered preventative care.

Instead of being paid for each service, doctors are rewarded for preventing disease, managing sick members and improving outcomes, which are measured against hospital admissions and other high costs.

PPO Serve’s modelling and pilot projects show that spending more on primary and allied health care can achieve a six percent reduction in hospitalisation costs, about five percent in specialist costs and about five percent in other hospital costs, reducing overall healthcare costs to around 95 percent, Kasapato said.

She said this strategic purchasing requires a clear separation between the purchaser and the provider of healthcare services.

Build trust to succeed

If healthcare remains unaffordable and untrusted, it will fail, Gerald Van Wyk, executive director and group CEO of AfroCentric, told the conference.

Van Wyk said provider variation, fraud, waste and abuse, benefit depletion and out-of-pocket expenses all fuel distrust and affordability pressures in the healthcare industry.

He agreed that healthcare must be delivered differently, with better health-risk management, benefit design, behaviour change, care coordination, trust and governance.

The industry should seek exemptions and use innovation to improve affordability through preventative care, primary healthcare, mental health support, better clinical pathways and integrated care, he said.