Factors influencing the financing of South Africa's National Health Insurance

Abstract

With the advent of the new National Health Act, health care in South Africa is at a critical point as this will be the first time in history that a National Health Insurance is being implemented in this country. Globally National Health Insurance has been around for more than a hundred years, however some countries with long established national health schemes are currently grappling with funding issues surrounding their health systems. South Africa should take note of these issues as it embarks on this journey. The objective of this study was to perform a literature review on how South Africa’s National Health Insurance can be funded taking cognisance of the history of the country and experiences of other countries. It is imperative for each country to achieve optimal health care funding to ensure the success and long-term sustainability of National Health Insurance. The analysis of the problems experienced by other countries revealed that balancing the three main funding options namely, allocated from the national revenue fund, user charges and or donations or grants from international organisations, is critical as the funds needed in a system to achieve coverage at an affordable cost is dependent on the current state of health care in a country. Considering South Africa’s history and current inequality in society and health care it is clear that the majority of funding for the National Health Insurance should be supplied by the national revenue fund. The required funds can either be raised by increasing existing taxes or introducing a new tax specifically aimed at financing the National Health Insurance. The use of user charges is important however, although not purely for a revenue collection point, but from a cost control point of view as well. Some studies have revealed that the lack of user charges results in a misuse of the system.