It has been stated over time, both by proponents and those opposed to National Health Insurance (NHI) that the South African health system is historically inequitable and fragmented. It has been described as a two-tiered system consisting of the public and private health sectors.

The country spends almost 8.6% of gross domestic product (GDP) on health care, which is comparable to other middle-income countries.

However, 4.1% of health expenditure as a percentage of GDP is spent on 84% of the uninsured population served in an overburdened public health sector while 4.4% is spent on about 16% of the population covered by medical schemes.

Out-of-pocket payments are currently estimated at 12.5% of the household budget. Combined with transport costs, this plunges both working-class and middle-class families into serious financial difficulties.

Internationally, about 60% of health expenditure is government-funded, while 40% of health expenditure is privately funded.

In contrast, in South Africa close to 52% of health expenditure is in the private sector, which is higher than other upper-middle-income countries where about 40% of health expenditure is private.

From a funding and delivery perspective, the private sector has grown from being a complementary service provider in the 1960s to now being a significant source of health care funding and expenditure.

On the other hand, the public health care sector, while achieving major strides in tackling the quadruple burden of disease (that is HIV, AIDS and TB, maternal and child mortality, non-communicable diseases, injuries and violence), faces many challenges and perceptions of spiralling costs as well as inducement of demand, which are among the key challenges the private sector needs to reflect on.

In 2014 the Competition Commission initiated an inquiry into the private health care sector in terms of Chapter 4A of the Competition Act, 89 of 1998 (as amended) (the Act).

Among other things, the investigation reviewed interrelationships between various markets in the private health care sector, including contractual relationships between and within different health service providers, the contribution of these interactions to escalation of private health care expenditure, the nature of competition within and between these markets, and ways in which competition can be promoted (HMI, 2014).

This inquiry also included a consumer survey and public participation of different stakeholders, including patients covered by different medical schemes.

The 2018 provisional findings noted among other things that this market is characterised by the rising costs of health care which cannot be attributed to the impact of ageing, gender, disease profile, member movements and the impact of plan mix.

The rising costs continue to affect the affordability of medical scheme cover while there are also challenges with regard to disempowered and uninformed consumers and ineffective regulation and governance failures. These observations are in line with the issues identified by Section 59 Council for Medical Schemes investigation as well as the recent inquiry by the South African Human Rights Commission.

Considering the above, as the NHI War Room in the Presidency, we hope that the Health Market Inquiry findings and recommendations will enable all stakeholders, regardless of their different interests and roles, to reflect on issues identified, especially considering the current move towards universal health coverage within the country.

In fact, the report is timely, given the approbation the country received at the UN General Assembly in New York last week for its revitalised effort to achieve universal health coverage through the National Health Insurance. We should recall that the recent G20 Summit in Japan also singled out universal health coverage as a significant step-change towards reducing inequality.

This is also in line with the recently signed Presidential Health Compact and the National Development Plan which recognises that the attainment of quality health care is not only the responsibility of the health sector, but requires all other sectors of society, that have an impact on health, to play a role in improving the well-being of all South Africans.

The interlinkage of health with the other sectors is also well articulated and recognised in the UN Sustainable Development Goals.

With the release of the HMI report, we look forward to a constructive national dialogue that propels the country towards an equitable health care system. DM

Ngcaweni is head of the Policy Unit in the Presidency. Khumalo is on secondment as health economist in the NHI War Room in the Presidency.