Monday, February 15, 2010

Latest Econex report on National Health Insurance (NHI)

About a week ago, Econex released a report on the likely cost of the National Health Insurance proposals as they currently stand. Here is a summary of the findings.

Principles of the NHI
  1. Universal coverage with no copayments
  2. Comprehensive benefits similar to those currently offered on cheaper medical scheme options
  3. Freedom of choice of healthcare service provider

Cost estimates for the NHI
Various studies and methodologies have estimated the costs of the proposed NHI between R130bn and R250bn as follows:

Where should the money come from? Financing the NHI
The costs as estimated above are large when compared to government's tax revenue and to government's current expenditure on healthcare. Such a comparison is provided below:

Econex concludes that the NHI as it is currently proposed is too expensive and substantial policy changes would be necessary to introduce a system that meets citizens' needs and affordability constraints.

Current NHI proposals are widely regarded as being too costly for effective implementation. The really interesting debate is in the form that the NHI should take given budgetary constraints.

Furthermore, the political will behind implementation of the NHI is too strong to be deterred by these cost estimates. Policy reform is therefore critically urgent, or the design of the NHI system will be determined by an uninformed political process.

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