We now have the next (and final?) edition of the National Health Insurance Bill which, aspirationally and inspirationally, seeks to achieve universal access to quality healthcare services in the Republic of South Africa in accordance with section 27 of the Constitution.

According to the preamble, the Bill seeks to achieve the progressive realisation of the right of access to quality personal healthcare services and to ensure financial  protection from the costs of healthcare, plus create a single framework throughout the Republic for the public funding and public purchasing of healthcare services. The Bill also seeks to promote sustainable, equitable, appropriate, efficient and effective public funding of healthcare services.

In terms of section 2, the purpose of the Act (after the Bill becomes law), is to establish and maintain a National Health Insurance Fund to, amongst other things, ensure the sustainability of funding for healthcare services within the Republic and to provide equity and efficiency in funding by the pooling of funds and the strategic purchasing of healthcare services, medicines, health goods and health-related products from accredited and contracted healthcare service providers.

The devil appears to lie in the detail, which is still to come under the myriad of regulations contemplated in the Bill. (Whether, in fact, legislation by way of the extensive proposed regulation in the particular circumstances is permissible – is debatable). 

Regulation is contemplated regarding, among other things, the legal relationship between the Fund and the various categories of health establishments, healthcare service providers or suppliers as provided in the National Health Act; the budget of the Fund including the processes to be followed in drawing up the budget in compliance with the provisions of the Public Financial Management Act; the accreditation of the healthcare service providers; the establishment and sourcing of suppliers; the relationship between public and private health establishments; and the opting in of the private healthcare providers.

What the Bill is silent on is how the proposed funding structures talk to budgeting and payment for and financial resolution of medico-legal claims, which will arise from centralised healthcare funding. Even in the best of healthcare delivery worlds, there is no medical care without medico-legal claims. This is a lost opportunity. 

Notoriously, the Provinces have a contingent medical malpractice liability exposure in excess of a hundred billion rand. Driving a large number of patients, who currently do not make use of the public healthcare system, into that system is likely to increase the number and quantum of medical malpractice claims at least in the short and medium term and, absent any significant results being seen from any quality of care improvement programme, those are likely to place additional medico-legal strain on the system. There are programmes in place in some Provinces, with varying degrees of success in dealing with both the historical provincial exposure to medical malpractice claims and new claims.

If, as contemplated by the Bill, healthcare delivery becomes more centralised, how then is the historical provincial medical malpractice burden to be dealt with? 

Presumably, that enormous exposure and problem remains with the Provinces.  How are new medical malpractice claims then to be dealt with and budgeted for?

Part of the difficulty is that there are different approaches in different Provinces to budgeting for such claims. In some Provinces, all costs related to those claims come out of the operating budget, which means less money for delivery of quality of care and the perpetuation of an endless cycle of the Province taking from “Peter to pay Paul” – with the inevitable negative effect on delivery of quality healthcare. 

In drafting the Bill, the opportunity presented itself to provide for and require appropriate and distinct assessment and budgeting for medico-legal claims and its constituent components – including Plaintiff claimant and defence costs, expert costs and settlement and judgments. And to propose appropriate amendments to the Public Financial Management Act, and related laws and regulations in this regard. As well as to provide for the ability of the Fund or the relevant authorities to insure, or at least re-insure, that liability either by way of enabling the creation of an appropriate self-insurance structure (for example, by way of the use of an appropriate captive structure or variations thereon. Or traditional insurance of the liability risk) with re-insurance of those risks. There are many international insurers (and willing local insurers) with experience and competence in the insurance of State facilities for medico-legal liability in a number of jurisdictions, who would be able to bring their skill and expertise to the table – not only in respect of the financial structure and solutions in respect of that exposure, but also in terms of their risk mitigation and risk management offerings, including clinical training options in respect of healthcare facilities and healthcare practitioners.

It is unclear what happens medico-legally, where the Fund contracts for healthcare services from private providers. Is it expected of those providers to insure their own liability in respect of the services rendered, and do those providers still stand to be sued in their own right for any alleged medical malpractice?

If so, why would it be permissible for liability, in that regard, to be insured but not necessarily when the services are rendered from a public healthcare facility or all under the umbrella of the Fund? That (if it is the case) would also suggest that a patient who presumably through pure chance has services rendered through a private health facility, is potentially in a better position in that patient could sue and recover damages from that private health facility and its insurer. In that regard, currently the National Health Act requires all private healthcare establishments to maintain appropriate medical malpractice liability insurance (but not public healthcare facilities). Unless the intention is, and the Bill is silent on that, to prevent the patient recovering any damages from the entity responsible for the service delivery and requiring recovery against the Fund.

Where necessary private doctors provide services, are they required to maintain their own medical malpractice insurance? Will the Fund indemnify those doctors in respect of any claims? It seems that the appropriate solution would be to legislate that where there is such provision of National Health Insurance services, a nominal defendant (the Fund) is sued in respect of all matters rather than the healthcare service provider themselves and that the Fund provides the indemnity.

In this regard, there is also an opportunity – maybe there is other legislation in the offing – to create a single and central authority responsible for all medico-legal disputes arising from the delivery of national health insurance services. 

Other jurisdictions with a form of national health insurance provide for the creation and funding of such an authority – both in terms of administrative costs, and budgeting for as well as resolution of such claims. A single authority responsible and mandated to deal with such claims would allow for the appropriate skilled resourcing of claims-handlers; a national policy response to such claims; useful and appropriate intelligence-gathering regarding the trends in respect of claims and the issues commonly litigated; whether any particular healthcare service provider is problematic regarding service delivery which will then allow for appropriate intervention; to more easily detect fraud where a claimant may pursue claims in respect of different facilities for multiple alleged injuries resulting from the same treatment; and to identify and allow for responses in respect of problematic claimants, Attorneys and experts.

Rather than deal with these challenges in a separate piece(s) of legislation, it is suggested that the Bill be amended to deal holistically with those issues and opportunities.