An essential hospital package for South Africa : Selection criteria, costs and affordability

In 1995 the Committee of Enquiry into National Health Insurance (NHI) recommended that formally employed individuals and their employers be required to fund at least a minimum package of hospital cover for workers and their dependents. This has recently been echoed in a Department of Health policy paper on social health insurance. This research aims to define and cost a minimum package of essential hospital care for competing (public and private) health insurers in South Africa. CRITERIA FOR PACKAGE DEFINITION: Based on the objectives implict in the NHI Committee report, the following criteria were used to define the essential package: (i) the extent to which there was another appropriate responsible party who should pay for treatment; (ii) the degree of discretion in deciding whether or not to provide treatment (roughly equivalent to 'urgency'); and (iii) the cost and effectiveness of treatment. On the basis of the above criteria, 396 out of 598 possible interventions were included in the package. Using local mine hospital and private sector utilisation rates and mine hospital cost data, it was estimated that the essential inpatient package would cost around R502 per enrollee per year, using 1998 prices, for a working age population and their dependents. Age-sex standardised outpatient care costs in the mine hospital population studied were estimated at R183 per person per year. It was therefore estimated that the total inpatient and outpatient hospital package would cost around R685 per person per year. The results presented in this paper are intended to inform the process of defining a national essential hospital benefit package. Assuming that contributions were proportionally related to income, and that costs should not exceed 6% of wages, the package should be affordable to all of those earning above R20,000 per year. Significant additional work is required, firstly at a technical level to assess the appropriateness of the prioritization approach used here, and secondly to take the debate around essential hospital benefits to broader political and public forums.