South Africa


Medical aid schemes back collaborative national effort on vaccine funding

Leading medical aid schemes and industry bodies have expressed support for the proposal that they contribute to financing the procurement of Covid-19 vaccine supplies for members and high-risk non-members.

As pressure mounts on the government to sign deals to secure Covid-19 vaccine supplies, medical aid companies appear to support a plan to pay higher prices to ensure members and non-members alike receive the jab, but stakeholders need to iron out key details.

Leading medical aid schemes and industry bodies have expressed support for the proposal that they contribute to financing the procurement of Covid-19 vaccine supplies for members and high-risk non-members.

While announcing the country’s vaccine rollout strategy on Sunday, Health Minister Zweli Mkhize said funding would be drawn from three sources – the government, medical aid schemes and the private sector – and be pooled into a national fund to purchase vaccines from manufacturers once agreements have been reached.

State expresses wish for February rollout of vaccines, will prioritise healthcare workers

Approximately nine million South Africans are members of medical aid schemes and companies could cross-subsidise non-members for the jab, suggested the minister.

Discovery Health CEO Dr Ryan Noach told Daily Maverick discussions about collaborative funding with the Department of Health began in earnest in late 2020.

Momentum Health Solutions’ executive head of marketing, Damian McHugh, said the company had participated in conversations over the last two weeks about procuring vaccines “to ensure that we provide more health to more South Africans for less”.

“Within Discovery Health and Discovery Health Medical Scheme, we are delighted to be collaborating with the national Department of Health and working in solidarity to ensure adequate funding of vaccines for all South Africans,” said Noach.

“This has critical relevance and implications to the health of our population, and to our economy. We are embracing the opportunity to co-fund.”

McHugh said it was important for the private and public sectors to work together to provide equal access to vaccines, particularly to high-risk groups.

“We believe it will be in everyone’s best interest to procure and distribute the vaccine as soon as possible, to as many people as possible,” said McHugh.

In a statement, the Council for Medical Schemes, which provides regulatory supervision of medical schemes, said it had been in continuous discussion with the Department of Health and industry associations, which have supported providing universal access to Covid-19 vaccines for prioritised groups.

“The public-private collaborative approach is aimed at supporting the national effort of achieving a herd immunity of 67% and more through equitable access to the vaccine, particularly because the Covid-19 pandemic is a national and international public health crisis that affects all,” it said.

While some stakeholders were tight-lipped about how the plan might unfold as discussions in the Vaccination Acquisition Task Team, which is made up of members of the public and private sectors and reports directly to Mkhize, Noach offered some details.

“Medical schemes have agreed to support a pricing arrangement for the vaccines, which ensures that a surplus is generated by the schemes’ purchases of the vaccines, that can be used to cross-subsidise higher risk non-medical-scheme members, on a one-for-one basis, ie, for each vaccine procured for a medical scheme member, sufficient surplus is generated through procurement arrangements for the vaccine to subsidise the vaccination of one non-medical scheme member,” he said.

A recent amendment to the Medical Schemes Act has made vaccination for Covid-19 a prescribed minimum benefit, meaning it’s mandatory for medical schemes to provide the jab.

Noach said the proposed approach to pricing “is not unusual, considering that many medicines are sold at a higher single exit price (SEP) to the private healthcare sector than to the public health sector”.

Discovery’s board of trustees has approved funding for the vaccination of all adult members and Momentum said it had allocated sufficient funds to ensure all members are covered for the vaccine.

The Council for Medical Schemes said companies may incur additional costs “but this is not expected to be prohibitively high”.

It’s unclear whether any companies might argue that they should be allowed to dip into the reserves they must maintain to ensure solvency, totalling at least 25% of annualised contributions.

The state aims to vaccinate more than 40 million people this year, which critics have claimed is not feasible, starting with frontline healthcare workers before focusing on workers in essential services and congregate settings, the elderly and people with comorbidities.

Vaccines procured through bilateral agreements will be in addition to those already secured through the Covax initiative, expected to begin arriving at the latest by the second quarter of 2020. Equitable access for at-risk groups is crucial.

“We support government in its phased approach that will see frontline health workers and high-risk citizens having first access to the vaccine,” said McHugh.

Noach said, “It would be ethically inappropriate for a young, healthy, low-risk person to receive the vaccine before someone living with high risk. This approach to vaccination will also have the greatest impact on reducing the burden on the healthcare system. There are many high-risk priority groups covered by medical schemes.”

The Council of Medical Schemes noted a broad range of issues that need to be finalised before an agreement is reached, including: 

  • A clear criteria on prioritised groups; 
  • Guidelines on medical scheme liquidity management and scheme reserve requirements; 
  • The vaccine funding model and mechanism; 
  • The appropriate funding vehicle; and 
  • Governance processes for the prevention of fraud, waste and abuse.

Vaccine finances could be pooled in the Solidarity Fund or a similar model. The Solidarity Fund declined to comment.

“At this stage, the financing options are limited, so I think that the proposed funding strategy is a good one based on what we know,” said Russell Rensburg, director of the Rural Health Advocacy Project.

“The risks, based on what is known at the moment, will likely be around governance and oversight as it is not clear how these funds will be managed.”

The independently-administered Solidarity Fund, established with R150-million seed capital from the state, collected more than R3-billion in donations to help fight the coronavirus.

The broader business sector is also likely to contribute to funding the procurement of a vaccine. Business for South Africa’s Martin Kingston said the sector would support a government-led vaccination strategy that is transparent, credible and has clearly defined roles and responsibilities.

“We recognise that we need to leverage competent and capable resources from society at large. In all cases, the terms of any such support must be appropriate, withstand scrutiny and be consistent with the primary roles of each of the stakeholders,” he said.

“It is imperative that government leads the process of vaccination selection and pricing and leads all discussion in terms of these negotiations.”

Vaccine manufacturers Pfizer, AstraZeneca and Johnson & Johnson are expected to submit applications to the SA Health Products Regulatory Authority (Sahpra) for approval by the end of January.

Noach, who said Discovery had been in regular contact with manufacturers “for some time”, said the Vaccination Acquisition Task Team “has been working tirelessly to finalise funding of vaccines for all South Africans and to secure supply of vaccine from global manufacturers as soon as possible”.

“In relation to this, there is extensive work under way to agree commercial and supply terms with several vaccine manufacturers globally.” DM


"Information pertaining to Covid-19, vaccines, how to control the spread of the virus and potential treatments is ever-changing. Under the South African Disaster Management Act Regulation 11(5)(c) it is prohibited to publish information through any medium with the intention to deceive people on government measures to address COVID-19. We are therefore disabling the comment section on this article in order to protect both the commenting member and ourselves from potential liability. Should you have additional information that you think we should know, please email [email protected]"

Comments - Please in order to comment.

  • Auke Van Der Meulen Van Der Meulen says:

    Chinese vaccine approved by sahpra!

  • Laurence Erasmus says:

    So private medical schemes must contribute to the state for a vaccine but they cannot secure a direct supply from a manufacturer! Sounds like the setting up of another ANC looting spree!!!!

    • mike muller says:

      You will have noticed that, worldwide, it is the companies that supply the vaccines that decided that they will only sell it through government channels…?

  • Roslyn Cassidy says:

    And where is Bonitas, CAMAF and other medical aids in all this?

  • Paddy Ross says:

    I am a member of a medical aid scheme but I believe that I should have to pay for a vaccine(s) injection just as those who want a PCR test without a doctor’s letter have to pay. If people who can afford to pay for vaccination did so, there would be more people, who need the vaccine but can not afford the cost, able to receive the vaccine funded by this central fund. My only proviso is that the government can not be the only controller of this fund. It should be controlled by a supervisory committee comprising medical aid scheme representatives among others and its decisions must be transparent to the public at large.

    • Jacqui Goodwin says:

      Agreed. I would also be happy to pay for a vaccine, as a medical aid member. However, I would also want to choose which vaccine I received….

  • Rod McLeman says:

    So my medical aid will subsidise SAA??

  • Johan Buys says:

    “ Approximately nine million South Africans are members of medical aid schemes and companies could cross-subsidise non-members for the jab, suggested the minister.” That is NOT how medical aid funds work. I will likely score to be waaaay down the priority list, but my funds will be used to pay for people that are not a member of my fund? I can get my head around a collaboration to vaccinate healthcare workers, but not the rest. Where are the hospital groups in this? They pay big salaries and bonuses and dividends – maybe they should be funding vaccines for all their workers?

  • Greg Beech says:

    Is this the way NHI is going to work? Heaven help us all

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