8. RESULTS OF COST MODELLING FOR THE SCENARIOS This section highlights the estimated costs of each scenario in 2030 (interim costs) and the estimated costs in 2040 (final costs) to distinguish between shorter-term investments and a longer-term steady state. The costs of the models are presented in standardised terms (relative to the NHI Bill scenario at a cost of R100) to rank the different scenarios. Absolute amounts are shown and expressed in 2020 terms (in real terms). However, they should be interpreted with caution due to various inherent uncertainties and assumptions. Three elements of expenditure are distinguished: publicly funded, private risk pooling, and OOP & private insurance expenditure. Private insurance, as opposed to medical schemes, is similar to OOP due to the limited nature of risk and income cross-subsidies, as well as the absence of a strategic purchaser. Risk-pooled private expenditure refers to medical schemes. In most scenarios, this sector no longer exists in its current form.
The total estimated cost of the five scenarios: By 2030, Status Quo Gold Standard and NHI as Described in the Bill are the most expensive scenarios in terms of total health expenditure (Figure 5). By 2040, NHI as Described in the Bill is the most expensive scenario. By contrast, Power to the People is the least expensive scenario by 2030 by a slight margin, while Reorienting Towards Value is the least expensive scenario by 2040. We also see that Reorientating Towards Value starts off relatively expensive due to the investments needed to measure the quality of care and the longitudinal costs of care. However, by 2035, this scenario is the most affordable. It sustains this position in 2040.
Figure 5: Total healthcare expenditure by scenario (Rands, standardised so NHI Bill scenario is R100 each year)
The breakdown of total health expenditure into the three main categories (publicly funded, private risk-pooling OOP) provides some insight into what is driving total health expenditure (Figure 6). OOP provides an essential third factor in understanding how the overall financing structure drives total healthcare expenditure. Under conditions of low-quality healthcare and limited choices to users within the chosen UHC system, OOP increases. Conversely, when users are satisfied with the quality of healthcare and have some choice in who provides their care, OOP reduces. South Africa currently has one of the lowest OOP levels for a low- and middle-income country 33 34. In 2030, NHI as Described in the Bill will have resulted in the closure of all private risk pooling (medical schemes). It is envisioned to have the highest OOP of all scenarios by 2030. By 2040, OOP has increased even further and constitutes a very large share (R210 billion of almost R900 billion) of total health expenditure, which is multiples greater than all other scenarios.
25 | TRADE-OFFS ON THE ROAD TO UHC: A QUANTITATIVE ASSESSMENT OF ALTERNATIVE PATHWAYS FOR SOUTH AFRICA
