Why medical aid schemes and insurance companies should be allowed to provide primary healthcare services

By Dr Katlego Mothudi, Managing Director, Board of Healthcare Funders

Healthcare - The outbreak of COVID-19 has once again shed a spotlight on the importance of affordable access to quality primary healthcare. When the pandemic was at its peak in 2020, scenes of patients being treated in corridors and parking lots through overcrowded wards were commonplace, sparking fears that the unprecedented levels of admissions would overwhelm the public healthcare system.

Thankfully, our collective fears were never realised, and we are glad that we have a resilient, albeit overstretched, public healthcare system. The outbreak of COVID-19 did not only test the capacity of the public healthcare system but served to remind policymakers to re-evaluate the current policy framework that governs the healthcare industry overall and make the required reforms with the objective of providing universal and affordable healthcare.

Today it is estimated that there are around 7.5 million actively employed South Africans who do not belong to a private medical scheme because they cannot afford the premiums that medical schemes are required to levy.

There is an opportunity to bring these health citizens into the fold of the private healthcare sector by introducing the necessary reforms that allow them to opt for benefits that suit their lifestyles and pockets.

Often these health citizens are of working age and simply require primary healthcare benefits that will enable them to access day-to-day health needs, such as consultations with private general practitioners, pharmacies, dentists, and optometrists.

One of the key drivers of high medical aid scheme premiums is hospitalisation, for which payment by medical schemes is mandatory. Giving members the opportunity to opt-out of purchasing a hospitalisation benefit will significantly reduce medical aid premiums and ensure that members are able to purchase and pay for cover that they require.

Providing health citizens with affordable and quality access to primary healthcare has multiple benefits. Firstly, it alleviates the pressure on public healthcare institutions.

Secondly, it enables health citizens to take preventative care to manage non-communicable diseases such as cardiovascular conditions, cancer, diabetes, hypertension, respiratory illnesses, and mental health disorders, which contribute significantly to the disease burden in South Africa. Often the prevalence of these diseases is a direct result of risk factors such as tobacco use, physical inactivity, harmful use of alcohol, and an unhealthy diet.?

A good and robust primary and preventative care package thus leads to a more sustainable and effective healthcare system.

Our public healthcare system is already paying a heavy price for the opportunities lost through not providing tailored primary healthcare benefits to lower-income earners. The fact that medical schemes may not offer these benefits cannot be justified from a moral and pragmatic perspective.

There is an opportunity for the regulator to exempt private medical aid schemes and other role players to provide affordable healthcare benefits and tailor packages for both traditional and more expensive benefits, as currently offered by the private medical aid schemes, and a lower but tailored benefit option.

The non-availability of primary healthcare benefits deprives over nine million people, who are able to subscribe to these services, of an opportunity to access quality and affordable healthcare. This is at variance with the objectives of the healthcare system as outlined in the Constitution and the prevailing health policy framework. Providing primary healthcare options to those who cannot afford membership of a medical aid scheme means that there will be more available healthcare benefits at a lower cost, which is what every healthcare system is supposed to aspire to achieve.

Health citizens who are not members of a medical aid scheme lose out on the tax benefits that accrue to those who subsidise their healthcare. Providing primary and affordable healthcare benefits will be a game changer for a wider pool of the population, and will even make healthcare more affordable.

Because of the tax credit, the primary healthcare benefits that could be provided would be much richer. From an administration point of view, providing primary healthcare benefits to lower income earners means more subscribers to private healthcare cover, which translates into potentially mitigating the costs of administration, better contracting with service providers, and more enhanced economies of scale.

Exempting medical schemes from providing primary healthcare, in the form of a low-cost benefit option, allows members who are already in the system but struggling to keep up with premium payments the opportunity to scale down their cover appropriately, while also giving people who are outside of the system the opportunity to access quality and affordable private healthcare.

This is a no-brainer. The current regulatory framework and associated policies are depriving millions of people of the opportunity to take charge of their healthcare needs and that of their families. In the end, it is the health citizen who loses.