In the ongoing discussions surrounding the implementation of the National Health Insurance (NHI) in South Africa, it is essential to consider the role of medical schemes and the misconceptions surrounding them. Prior to understanding the role of medical schemes, it is important to understand what they are and the basis they operate on.
Medical schemes make provisions for individuals and families to obtain comprehensive health care coverage and allow them the choice of medical care. They are non-profit tools that provide medical expense coverage to their members in exchange for a monthly premium. Schemes are legally regulated by the Medical Schemes Act 131 of 1998 (the Act) which keeps them from being for-profit organisations and from having their stocks traded on platforms such as the Johannesburg Stock Exchange (JSE).
The Council for Medical Schemes (CMS) exists to protect the interests of medical scheme members, monitor medical schemes’ financial soundness, and control and coordinate their functioning in a manner that complements national health policy. The CMS also ensures that medical schemes operate in compliance with the Act. Medical schemes are governed by Boards of Trustees who must be fit and proper persons, i.e., competent to perform their role. According to the Act at least fifty percent of the trustees must be elected from amongst scheme members. Many trustees therefore have a vested interest in keeping their medical scheme sustainable. Boards of Trustees are held to certain legal and ethical standards and are required to work diligently, in good faith and with due care and skill to ensure their scheme’s compliance with the law, that proper control systems are employed on the scheme’s behalf and that the interests of scheme beneficiaries are protected at all times.
Despite the rising costs of private healthcare and a lack of government stewardship over the private health sector, medical schemes continue to provide access to quality medical services to approximately 8.9 million members in South Africa. The South African health system still grapples with numerous challenges in both the public and private sectors. With the overwhelming and increasing demand for essential health care services, shortages of medical supplies and technology and skilled health care professionals, the healthcare system is still under extreme pressure. The COVID-19 pandemic only exacerbated these issues.
South Africa indeed faces significant challenges to provide access to healthcare services to all of its people. With a population of over 58 million, only around 9 million individuals are beneficiaries of medical schemes. These people pay medical scheme contributions from their own private income. For those who cannot, the public health sector’s limited funding has led to overcrowding and resource shortages at every level. The current financial situation in the public health sector poses legitimate concerns.
Over the years, what has become undeniably evident is that inefficiencies in state-owned entities and the public health sector due to widespread mismanagement, incompetence and rampant corruption have adversely impacted the general public and its constitutional right of access to health care services. Centralising the public funding of healthcare through NHI raises serious concerns around health service delivery. The government needs the co-operation and support of the private sector to successfully implement NHI.
Medical schemes successful implementation of proper administrative infrastructure and functional corporate governance systems demonstrates a commitment to effective and inclusive health system development, benefiting all parties concerned and contributing to greater societal advancement.
