How can developing countries implement health systems that are both equitable and
sustainable? Is social health insurance (SHI) a valid healthcare finance mechanism for these
countries? This article examines the lessons that can be drawn from the South African
experience of adapting and implementing SHI.
Researchers from Universities of Witwatersrand and Cape Town in South Africa, and the London
School of Hygiene and Tropical Medicine studied the implementation of SHI in South Africa.
SHI has a long tradition in the developed world but was only revived as a potentially useful
model for low and middle-income countries in the 1980s. This revival was because:
* it was thought that SHI could increase the equity and efficiency of health resources
* it was believed that SHI could generate resources at times when government funding in
healthcare was in decline.
These views were held by many policy-makers in South Africa in the late 1980s. Their stance
was strengthened at the time by the existence of an unequal health system that spent its
resources on a relatively small minority and did not provide care to those most in need. SHI
was seen as the best funding model to deal with these problems. Its introduction was
announced in the National Health Plan by the African National Congress in 1994. The initial
idea is that the state collects funds from different sources and uses them to buy health
services that can then be distributed to the population according to need. It was estimated
that at least half of the South African population would benefit from the scheme. In the
event, only a limited version of this idea is now being proposed. Researchers found that:
The introduction of SHI in South Africa in its currently proposed form would not address
the challenges of equality of provision faced by the system. This was partly because only
those above a certain income were asked to contribute to financing, and would benefit from,
* The model of SHI introduced only covered hospital services and not the entire range of
* The system increased inequalities in access to healthcare, with the rich accessing services
through private insurance and the state covering low-income and high-risk groups.
The paper illustrates how SHI design can be affected by concessions that have to be made to
key stakeholders and how these can affect the core objectives of SHI. Lessons for future
policy development and implementation include:
* The design of SHI has to be geared to achieving key policy objectives such as equality and
* In order to avoid inequalities of access and ensure the long-term sustainability of the
system, it is necessary that the SHI and existing private insurers contribute to the same
* For SHI to work its implementation has to take place at the same time as organisational and
other financial reforms.
* Pre-determined objectives need to be stuck to in order to protect the integrity of the
* It is necessary to take into account that powerful actors such as private insurers or
high-income groups can have a negative effect on the implementation of SHI.
Contributor(s): Di McIntyre, Jane Doherty and Lucy Gilson Source(s): 'A tale of two visions: the changing fortunes of social health insurance in South Africa',
Health Policy and Planning 18(1): 47-58, by D. McIntyre et al, 2003.( Source: http://www.id21.org/health/h1dm1g3.html
29 July, 2003).