Speaking at the Hospital Association of South Africa's (HASA) 19th annual conference in Cape Town, Childs outlined ways for the private healthcare sector to increase its coverage by making it more affordable to belong to a medical scheme.
"We'd all like universal healthcare coverage to be moreequitable and effective," said Childs. "There is a lot more we can do within the private sector to improve access, affordability and equity."
He added that medical scheme regulatory reform which had been proposed years ago was critical to making medical cover more affordable.
"It's not that it's broken, but it's not complete," said Childs. "While National Health Insurance (NHI) is important, we can't leave medical schemes as a regulatory orphan in the meantime."
This would mean introducing a risk equalisation fund that would create a level playing field between schemes to even out the financial impact of having different risk and demographic profiles.
Regulations that made it mandatory for all those in formal employment to belong to a medical scheme should still be introduced, he said.
"Mandatory membership compensates for anti-selection, to stop members joining schemes only when they need care, and leaving thereafter," said Childs. "Mandatory membership could reduce contributions by 9-14%."
He also emphasised that Prescribed Minimum Benefits (PMBs), a list of conditions which schemes wererequired to cover, provided needed social protection, but were a barrier to entry for low income families.
"Just to cover the PMBs, the average cost to a family is around R1,064 a month," said Childs. "Assuming people would be willing to pay 15% of their income towards medical scheme cover, only 30% of the households could afford the PMBs and lower income families would need significant employer subsidies if they were to get medical cover."
Childs said more could be done to use income cross subsidies - where wealthier members subsidised more people to come into the private healthcare sector. "By using smart income cross subsidies, access to medical schemes could be expanded significantly,alleviating a large load from the public sector."
He also urged schemes and employers to work hard on preventative programmes to stop people getting sicker.
Childs said if all these measures were implemented, medical scheme contributions would be 20-30% lower. "Then, if we pass on only half of potential savings to the existing market, the remainder can be used to cross subside the new market at similar benefit levels," he added.
Kevin Lings, chief economist at Stanlib said South Africa needs to establish a massive middle class where more people were employed for more people to afford medical cover.
"First create the jobs, then look at how you're going to distribute socio-economic services," he said.
He pointed out that the country's unemployment rate was also far higher than other emerging markets and still 306 000 jobs below the previous peak in the last quarter of 2008.
Lings said only 859,000 taxpayers paid 53% of personal income tax.
"In order to expand access to medical schemes and hit 30% coverage, we need a much bigger, stable middle class, which is family orientated, has technical skills with good job opportunities."
