Making sense of health care

The growing cost of medical aid puts the spotlight on the need for a more realistic approach to healthcare policy in South Africa. While NHI is intended to offer universal healthcare, questions have long been raised about how the country’s constrained fiscus can afford it and whether an already strained tax base can bear the additional burden.

Exacerbating the situation is the fact that the public healthcare sector, particularly many tertiary hospitals, are largely dysfunctional, requiring significant investment and repair before NHI can be implemented.

In one example, the health ombud found that Helen Joseph Hospital in Johannesburg was so under-resourced and poorly managed that it was not fit for purpose. Another, separate investigation by the office of health standards compliance (OHSC) came to a similar conclusion, reporting that the hospital was in a state of decay.

The private healthcare industry believes that instead of reducing the role of private healthcare funders, it should be expanded to cover more people, reducing pressure on the over-burdened public healthcare sector.

While medical schemes are struggling to grow their membership bases, they argue that they should be able to compete with low-cost benefit options (LCBOs) to compete with the proliferation of health insurance products currently in the market. Health insurance products are not subject to the same regulatory burden as medical schemes and are therefore able to position themselves as a more affordable alternative to medical aid.

In April, the medical schemes regulator gave companies selling health insurance products a two-year extension, pending government’s final decision regarding the future of LCBOs.

There is growing interest in health insurance products which provide affordable solutions covering basic primary medical care, such as day-to-day consultations with general practitioners, dentistry, optometry, acute and chronic medication as well as defined hospital events.

The key difference between medical aid and health insurance lies in their coverage. The former offers comprehensive health benefits, including prescribed minimum benefits (PMBs), while the latter pays a fixed amount for specific health events outlined in the policy.

Jessica Bates, Integrated Health executive at Dis-Chem, points out that medical insurance plays an important role in helping consumers who are not members of a medical aid scheme have access to quality healthcare, including primary healthcare.

“Medical aid membership isn’t affordable for all South Africans. Health insurance products are a viable solution, providing access to primary healthcare providers such as nurses, general practitioners and dentists, along with medication,” says Bates.

The World Health Organization (WHO) says more than one billion people globally are at risk of falling into poverty due to out-of-pocket health spending of 10% or more of their household budget and that scaling up primary healthcare interventions across low and middle-income countries could save 60 million lives and increase life expectancy by 3.7 years by 2030. The WHO says primary healthcare is the most inclusive, equitable and cost-effective way to achieve universal health coverage and is key to strengthening the resilience of health systems to prepare for, respond to and recover from shocks and crises.

In partnership with Kaelo and licensed non-life insurer Centriq Insurance, Dis-Chem Health branded medical insurance products provide access to affordable and quality private primary healthcare including doctors, dentists, optometrists, counselling, tests, scans and screenings, among others. Dis-Chem Health policyholders qualify for Dis-Chem extraRewards which provides additional savings, which can be used to fund the insurance premium.

Bates says health insurance products are ideal for corporates wanting to ensure that all their employees’ primary healthcare needs are covered. “At Dis-Chem we require our employees to join a medical aid scheme or be covered by medical insurance, based on relative affordability. Among our employee base and their beneficiaries, we have around 3,000 individuals who are covered by medical aid, while 20,000 are covered by medical insurance products. There is a misperception that insurance products don’t offer sufficient value. Our experience with our own employees proves otherwise. Of the 20,000 medical insurance members, 7,000 (33%) are voluntary dependents, where employees have chosen to add family members out of their own pocket.

“We see significant utilisation of general practitioners, nurses, medication and dentistry. In 2024, 70% of members utilised their benefits during the year, with the insurance paying for almost 17,000 GP consults, while 1,500 employees utilised their dental benefits. There is a notable shortage of dentists in the public sector, with the result that some of our employees had never seen a dentist before being covered by these policies.”

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