If ever there was a "public good", as economists call it, one that ought to be publicly funded, it's the Covid vaccine. Health minister Zweli Mkhize this week put a price tag of about R20bn on vaccinating the two-thirds of the population needed to achieve herd immunity and halt the Covid crisis. Health industry experts say that's the worst-case, all-inclusive scenario. It shouldn't exactly be a stretch in the context of a R2-trillion government budget - particularly not in the context of an economy and a tax base that have been devastated by the crisis. But it is what it is.
It's now agreed that SA will instead go the route of a partnership in which at least a third and possibly much more of the cost will come from private sources, including millions of medical scheme members.
That raises some big questions, but it also has some big advantages. Top of the list of questions is how private funders and the trustees of those schemes can ensure that buying and administering the vaccines is done transparently, effectively and with integrity. Not only do they need comfort that there's no chance of the corruption debacle that accompanied the government's emergency procurement of personal protective equipment, they also need transparency and accountability when it comes to the rollout of the vaccine programme itself. But a big question, too, is how SA can ensure that the rollout is equitable, and in line with a clear national strategy, even if much of the money comes from medical schemes and big corporations that might feel entitled to priority for their own members or employees.
The involvement of private money will force much-needed oversight and transparency. It could potentially also bring much-needed logistical, technological and management capacity to a highly complex process that a dysfunctional government cannot deliver on its own. But it's still early days, with many difficult funding issues to be resolved and choices to be made, on both sides.
The government has to lead the procurement of the vaccine doses SA will require because the global manufacturers will deal only with governments, given the constraints on supply. But the funding, as Mkhize indicated in his hastily cobbled-together Sunday night briefing, will come from three sources: the government, medical schemes and other private donors, most likely through the Solidarity Fund.
The Solidarity Fund has already donated about R250m to make the down payment SA had to make to the global Covax initiative, after Mkhize apparently approached the fund in December saying the government didn't have the money. The minister has now confirmed that the government does have funding for the vaccine rollout. Finance minister Tito Mboweni is said to have privately mentioned R10bn. How much more has to come from the private sector will depend on how much the government will make available. The timing matters too, given the need for advanced purchase agreements with manufacturers to secure supplies of vaccine.
Involvement of
private money
will force
much-needed
transparency
Covax will provide vaccines for 10% of SA's population. The medical schemes will provide for their members, who make up another 15% of the population, after regulations were changed this week to make Covid vaccines a prescribed minimum benefit for members - who include most of the health-care and other essential workers on the "Phase 1" list to receive the vaccine first.
Discovery estimates the total cost to SA's medical schemes of immunising their own members at about R3.5bn - a fraction of the schemes' gross premium income of R270bn a year, or their reserves of more than R87bn. But it's proposed, too, that the schemes cross-subsidise the cost of the vaccines for a further 15% of the population, through a price mechanism in which they will effectively pay double the cost price for each dose. They could also put up the advance funding to buy vaccines that will be required to secure agreements with manufacturers. This is members' money. Their trustees have a fiduciary duty to ensure it is properly and transparently spent. There's no guarantee they will support the plan - certainly not unless there is transparency and accountability in the way the money is spent.
And for anyone involved in designing SA's proposed National Health Insurance, there's a clear message here about the crucial importance of SA's private sector as a partner, now and in future.
• Joffe is contributing editor.
