Life in our time of cholera?

I love to read, so I’m not proud to admit right upfront that everything I know about “Love in the time of cholera” I learnt in 3 minutes from wikipedia starting about 3 minutes ago. Seems like a book I should read.

But another than playing on the well known book and movie title, this post has nothing to do with the book.

It has everything to do with cholera. And the very real possibility of a cholera or similar disease outbreak in Cape Town in the next year. Here is a little superficial analysis of the numbers.

The City of Cape Town now expects us to run out of municipal water

The City of Cape Town has gone from claiming unequivocally:

“we want to give the people of Cape Town an assurance that this well-run city will not run out of water.”

on the 17th of August 107 to 4 October 2017’s:

If consumption is not reduced to the required levels of 500-million litres of collective usage per day, we are looking at about March 2018 when supply of municipal water would not be available.

How are dam levels and consumption point away from achieving these targets

CT has been stuck persistently above 600Ml (million litres) per day for an extended period and this is down from a peak of 1,200Ml per day in January 2015. The low hanging fruit are long gone. I do not see how we will decrease consumption by another 20% (since we’re over 600Ml at the moment) and this therefore suggests we will run out of water.

Consumption has reduced significantly, but shows no signs of decreasing below 600Ml per day

Continue reading “Life in our time of cholera?”

US Life Expectancy and the dangers of superficial analysis

Life Expectancy is going up. In general. But what really matters isn’t the general but the specifics. I know it’s hard to work through maths and actual calculations, but it doesn’t help if you run your analysis off slogans.

US Life Expectancy is going up. But not as much “at retirement” as it is up “at birth” because all the improvements in infant mortality are irrelevant at retirement. Similarly, mortality improvements aren’t the same for all income bands. The detail matters when it comes to trillions of dollars of social security.

Discrimination and anti-selection

Medical Schemes in South Africa are actually pretty fair.  It doesn’t matter how old or sick you are, as long as you’ve been part of the programme at some scheme, you’re generally covered.

There is a natural subsidy from young to old, healthy to sick and that is absolutely intentional. It’s “fair” in that you get cover no matter what your genes gave you at birth or what you’ve been exposed to in life. It’s “unfair” in that healthy individuals will pay more on average for cover than they will claim.

The black-and-white meaning of the word “fair” really breaks down here. What is important is what the outcomes are and whether it is the best system.

Enter the Consumer Protection Act and Anti-gender-discrimination laws in Europe. The Consumer Commission is investigating whether Medical Schemes discriminate against pregnant women by requiring a waiting period before providing cover.  Well, yes they are, but pregnant women (and not-yet-pregnant women) are anti-selecting against medical schemes when they choose not to belong for years, or upgrade to a more comprehensive plan just before giving birth and incurring all the additional costs of childbirth for the expense of other members.

I’m not saying this is “fair” or “unfair”. The point is, do we feel all pregnant mothers should be able to claim full benefits for their pregnancy regardless of whether they belonged to a particular scheme or any scheme at all before they became pregnant? This cost will be picked up by other members.

The theory goes that as medical scheme contributions increase to fund this increased cost, more members will elect not to belong to a scheme until they are actually pregnant, this decreases the pool of people paying the subsidy, requiring an increase in the subsidy per remaining member. And so on.

In practice I’m not convinced this matters much except at the absolute margin.

Whatever the decision, the Consumer Commission should deal directly with the Council for Medical Schemes and not individual schemes.  When our laws are possibly inconsistent, the laws must get resolved first before any individual scheme, trustees or administrator incurs costs of explaining the issues and trying to figure out how to comply with inconsistent legislation.

More utterly misguided criticism of medical schemes

I wish this would be the last time I say this (or the first or the second):

“Medical Schemes are non-profit entities are don’t make profits for shareholders.” There are administration companies that charge administration fees that have shareholders and make profits. However, if my medical scheme pays me a greater benefit, they will be removing a benefit from someone else or making everyone pay more in contributions.

It really is a simple idea, but clearly this misguided “GP” doesn’t understand the first thing about the organisation he is criticising.  Note that I’m not commenting on a particular medical scheme’s practices, but rather the universal reality of medical schemes.

Compounding wisdom from a surprising source

I really struggled when Health Minister Aaron Motsoaledi announced (many sources, but here is one) that private healthcare costs have increased by 121% over the last decade.

He continued: “Over the past decade, private hospital costs have increased by 121%, while over the same period, specialist costs have increased by 120%.”

Anyone who measures growth over long periods without using compound annual rates can’t be taken seriously. Abusing numbers for shock value is a sure sign of a weak argument or a lack of appreciation for long-term issues.

121% over nine years (2001 to 2009) equates to an average cumulative annual growth rate of 9.2%. Now medical price inflation of 9.2% is high given inflation over the period and modest real growth in GDP and salaries. But 9.2% tells a very different story to a layperson than 121%. The 9.2% is more useful, more comparable to inflation, more easily able to be understood. 121% is more shocking.

I was really encouraged to read this in a story, quoting Matlala from HASA:

He pointed out that while the green paper said private healthcare costs had increased 121% between 2001 and 2009, this should be contextualised against the backdrop of contributions to public healthcare increasing by more than 100% over the same period.

“Even the price of bread has increased 111% over the decade… We have to face up to the fact that the cost of living has gone up, including healthcare,” Matlala said.

Finally, someone quoted acknowledging that the 121% figure is utterly misleading.

Incidentally, 111% over 9 years is equivalent to an 8.7% annually compounded growth rate, just 0.6% per annum below healthcare cost increases. 


Health costs we should all be happy to be paying at long last

With all the debate and discussion about the costs (and hopefully benefits) of NHI, it really is encouraging to see that the Department of Health and government aren’t hanging all their hopes on the Big Bang of NIH to solve our healthcare issues.

As we slowly put the curse of the Mbeki-Manto-Beetroot alliance behind us, all HIV patients with a CD4 count of 350 or less will now get government antiretroviral (ARV) treatment, Deputy President Kgalema Motlanthe announced on Friday.


This is fantastic news because, although there is naturally a cost involved, the increase in productivity of our workers, the protection of normal family units and a general sense of improved quality of life for our citizens has considerable value. Hopefully the buying power of the SA government for ARV’s is also reaching astronomical levels and therefore very low costs must be available.

This is of course a potential benefit of NHI – more robustly directly single-payer and therefore single price-maker for health services could contain costs to an extent. The extent to which this cost containment is placed on foreign companies and drug manufacturers is a straight win for the economy. Cost savings squeezed out of local firms and individuals have a partially offsetting cost in terms of reduced incomes for those sectors of society.

But this is overwhelmingly good news – even if it is 15 years late.