South Africa has moved one step closer to a National Health Insurance scheme, with Finance Minister Pravin Gordhan announcing a R121-billion health budget for 2012/13, aimed at improving hospitals and strengthening public health ahead of the scheme's introduction.

The National Health Insurance scheme (NHI), which will be phased in over a period of 14 years, starting this year, aims to provide equitable health protection for all South Africans.

Delivering his Budget speech to Parliament in Cape Town on Wednesday, Gordhan allocated R1-billion to the scheme's pilot projects in 2012/13.

Nursing college, hospital upgrades

Gordhan also announced that R450-million had been put aside to upgrade about 30 nursing colleges, with a further R426-million allocated for initial work on rebuilding five major tertiary hospitals.

These are the Chris Hani Baragwanath Academic Hospital in Johannesburg, Durban's King Edward VII Hospital, the Dr George Mukhari hospital in North West province, the Limpopo Academic Hosptial, and the Nelson Mandela Academic Hospital in Mthatha in the Eastern Cape.

Gordhan's Budget also makes R968-million available over the next three years for the provision of HIV drugs. The move is expected to bring up the number of recipients of free antiretroviral treatment up from 1.5-million in 2011 to about 3-million by 2015.

Paving the way for the NHI

The Department of Health will this year complete an audit of all health facilities in the country, and is working with the Council for Scientific and Industrial Research and the Development Bank of Southern Africa to develop a targeted response to the infrastructure needs of the sector.

Health Minister Aaron Motsoaledi acknowledged on Wednesday that it would take some work to finally get the NHI to where the government wants it to be.

"That is why we are giving ourselves a period of 14 years, but we do acknowledge that we have to start somewhere, and I must emphasise that by piloting we are putting down the bricks and we getting everything ready," Motsoaledi told journalists in Cape Town.

There were two "preconditions" for making the NHI work in South Africa, namely an overhaul to create a quality health care system, and strict regulation of the sector to make it more affordable to all South Africans.

"When we say we want to regulate pricing, it does not mean we are unfair to the private sector," Motsoaledi said. "What we saying is that you can't discriminate against people based on price just because the public health system is so poor."

In the interim, general taxes will remain the primary financing of NHI projects, while new funding resources will be explored over the long term depending on the progress of institutional reforms and health delivery capacity.

Preliminary modelling suggests that full implementation of the system may be realised by 2025, but this will require financing to rise from 4% to 6% of gross domestic product (GDP).

A discussion paper on revenue options and associated transitional issues, including the role of medical schemes, will be released later this year.

Source: BuaNews