High costs in S.Africa healthcare industry under scrutiny - CNBC Africa

High costs in S.Africa healthcare industry under scrutiny

Southern Africa

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Stethoscope. PHOTO: Getty Images

“I’m confident that we will be able to get affordable healthcare in South Africa. A lot depends on political will and government having the guts to see to it that they intervene meaningfully when it comes to this,” Humphrey Zokufa, Board of Healthcare Funders (BHF) managing director, told CNBC Africa.

“All of this is provided for already in Section 27 of the Constitution, that healthcare is a right and healthcare must be made accessible to people, and government must embark on various strategies, including legislative changes to make sure that a South African citizen has access to healthcare.”

The BHF has since called on for cheaper healthcare since the Commission’s investigation announcement in the industry.

The BHF is the representative organisation for majority of medical schemes in South Africa. The organisation also represents medical schemes in Zimbabwe, Namibia, Lesotho and Botswana.

Zokufa said that more money was going to healthcare providers and away from medical aid schemes, all while increasing the burden on the member who pays the contributions.

The additional fact that the cost of medical aid increased on an annual basis, subsequently subjecting consumers to costs above the Consumer Price Index, is a considerably large burden.

Reports nonetheless show that few medical schemes fail to make a surplus despite their mounting annual fees.


“[In] the annual report that comes from the Council of Medical Schemes, the last two reports do show a surplus when it comes to medical aid schemes. Having analysed that, we see that the contributors of that surplus are mainly two large schemes,” Zokufa explained.

“The rest of the medical schemes are in deficits and that has been the picture for the last five to 10 years. One can project that that will be the picture going forward.”

The introduction and implementation of the National Health Insurance (NHI) scheme could provide relief for both the industry and consumers but such systems will take decades before many can start to reap their full benefits.

The NHI is also expected to have a significant impact on private healthcare schemes.

“The major problem with the medical aid schemes industry right now is fragmentation, which doesn’t lend itself to meaningful subsidies both in terms of income and disease profile. If you put everybody into one basket, you then begin to benefit from those cross-subsidies,” said Zokufa.

“If the NHI becomes the single purchaser as proposed, then you’ve got the economies of scale to extract a reasonable tariff from those who provide healthcare and healthcare products. That situation [is not being obtained right now].”