What could the soon to be unveiled National Health Insurance Bill and the Medical Schemes Amendment Bill entail?
Today at 13h00 SA standard time the National Minister of Health will hold a press briefing at which he will "unpack" the National Health Insurance ("the NHI") Bill and the Medical Aid Schemes Amendment Act ("the MAS bill").
What the precise implications of these two pieces of legislation will be – which we know form part of a greater legislative and political imperative – will hopefully become clearer later today. Many commentators, who have considered in detail various iterations of the NHI white paper in the past, have offered valuable insight and thoughtful commentary with regard to the potential implications of this anticipated legislation. You can read some commentary here and here.
For now, and pending the press briefing, we offer the following speculative comments with regard to the potential implications of this new legislation.
Potential Implications for Medical Aid Schemes & Members
Members of medical aid schemes receive tax credits governed by factors such as the number of members of the scheme in a family unit. These are determined annually as part of the national budget and taxation rates when they are announced. The amount of a tax credit is a function of the amount spent by members on contributions to a medical aid scheme.
Until the end of the 2018 financial year, the amount of these tax credits were increased annually by amounts designed to keep pace with inflation. In the 2019 financial year the rate by which these tax credits was increased was reduced to 2.3% which is below the rate of increase in inflation on an annualised basis. For the next two years, tax credits can be expected to increase at rates below CPI.
This is being done in order to make available more revenue generated by income tax in part to fund the NHI. The rate of increase in the tax credits, as well as the credits themselves available to persons who contribute to medical aid schemes, will probably be reduced year on year to make more tax revenue available to fund the NHI. This will make medical aid contributions less affordable for an increasing number of people on an ongoing basis.
This will also lead to a decrease in the number of medical aid scheme members as more and more people will find the cost of membership too high as a result of reduced tax credits. At some stage the number of members contributing towards a medical aid scheme will drop to a level below which the scheme is unsustainable and it will cease to exist.
There will be fewer schemes and, ironically, a greater monopoly – or at least the scope for it.
Schemes will seek to make their administration systems available to the NHI system and generate a new revenue stream that way.
If medical tax credits are phased out completely very few people will be able to afford to remain medical aid scheme members. The rest of us will have to access the public health care system under the auspices of the NHI.
Potential Implications for Private Practitioners
With dwindling numbers of medical aid scheme members as patients, fees earned by private practitioners from that source will be reduced. Private practitioners will be obliged to treat NHI referral patients at rates imposed by the NHI. This has the following potential implications:
- Being paid reduced rates for treatment requires private practitioners to see more patients in order to generate income levels similar to that enjoyed previously.
- This may compel private practitioners to spend less time with patients and on work-ups which could foreseeably lead to a decline in the quality of care.
- Private practitioners may face long delays in receiving payment for NHI patients consulted since they will have to rely on the NHI administration system to process and pay their claims and they could find themselves waiting months or years for payment as is presently the case with claims submitted to the Compensation Commissioner.
Going forward, it is likely that the bulk of a private practitioner's income will be derived from fees generated by consulting NHI-referred patients, a reducing proportion thereof will consist of fees generated from consulting medical aid scheme members and a similar, smaller proportion will consist of fees generated from consulting private, self-funded patients. Is such a model financially viable for private practitioners?
Does such a model not economically disincentive practitioners from specialisation?
If such a model is not financially viable for a large number of practitioners what are their alternatives? Emigrate?
Implications for Professional Indemnity Insurers and Organisations
As the NHI system is rolled out and, if, we predict, the numbers of medical aid scheme members dwindle, more and more patients will seek treatment under the auspices of the NHI. As we have seen from the model fee generation mix of private practitioners above, in future a decreasing proportion of their income is likely to be derived from treating patients outside of the NHI system.
With an increasing number of patients being treated under the auspices of the NHI system, one can predictably expect that professional indemnity claims against practitioners by NHI patients will increase. Although a NHI patient sees a practitioner as a result of referral from the NHI system, if that patient experiences harm due to the negligence of the practitioner concerned, against whom does his or her recourse lie?
The temptation is to conclude that liability for professional negligence on the part of a practitioner in such a situation must lie with the NHI since it made the referral and as such "employed" the services of the practitioner, but the answer is not necessarily clear. This is so because the practitioner concerned is engaged in practise for his or her own account and does not act with the course and scope of his employment with the NHI.
We recently saw the introduction of the State Liability Amendment Bill of 2018 in the National Assembly. This bill seeks to limit the liability of the State in respect of claims for damages emanating from patients who suffered negligence while seeking treatment in the public healthcare sector. Are all patients who seek treatment within the NHI system limited by the provisions of this Act? Do their claims lie against the State or the practitioner who was negligent?
Depending on where liability for harm suffered at the hands of a private practitioner by a patient who was referred to that practitioner by the NHI system lies, there could be implications for the risk and pricing profile of the cost of indemnity of the various specialist disciplines. This could be favourable or unfavourable from a risk and pricing perspective.
Implications for the Public
The notion of universal health care for all is a noble one. The pursuit of it has the potential to do great good but it brings with it the possibility of great harm.
The potential for great harm has been well documented by commentators previously. Much has been said about the motivation for the apprehension of great harm being caused by the NHI system. There is no doubt that the Minister will draw our attention to vested interests who are understandably concerned about their investments made in the healthcare sector and their desire to protect these in the light of the rollout universal healthcare.
Is it acceptable if the NHI provides more people with greater access to more healthcare services previously not available to them, even if it has the effect of depriving some of access to healthcare services they previously enjoyed?
No doubt, some interesting discussions lie ahead.