The National Health Insurance Bill IV: Summary of the HSF’s conclusions on the Bill

This brief is one of a series of four briefs on the National Health Insurance Bill (“NHI”). Their content is based on the submission which the HSF made to Parliament on 29 November 2019 on the National Health Insurance Bill (“the Bill”).
The National Health Insurance Bill IV: Summary of the HSF’s conclusions on the Bill

The first brief deals with the current situation in the health sector and how the NHI proposes to change it, the second with the lack of detail that has been provided on crucial aspects of the proposed NHI and its financing, and the third with the State’s ability to manage such a project. This fourth brief contains a summary of our conclusions.

Our conclusions

1. While we support the underlying concept of universal health care, we believe that insufficient information has been provided to enable a lawful public consultation. In addition, grossly inadequate research, planning and analysis, concerning the operational, administrative and financial aspects of the NHI, have led to a Bill which cannot be considered to be the product of a rational process. National Treasury’s opinion that it cannot be funded as envisaged, provides further concrete evidence of an exercise which is glaringly irrational.

2. Government has been unable to manage the public health sector in an acceptable manner and, at the same time, has also shown itself to be unable to regulate the private health sector. In addition, it has shown itself to be incapable of managing many State entities in a satisfactory manner. Government now proposes to establish an NHI which will control and manage most of the health sector, and which is intended to serve as the single purchaser and single payer of health care services from both the public and private sectors. It makes no sense to try to integrate these two segments of the national health system into one consolidated purchasing framework, if there is no clear plan to address their respective shortcomings. 

3. Government has not explained how the NHI will ensure health services of an acceptable quality. It has not completed a feasibility study for this massive enterprise and is unable to provide an estimate as to what it will cost. It is therefore impossible to estimate the increase in tax that is required to fund it and the Bill and the accompanying memorandum do not provide adequate detail as to how Government proposes to implement, fund and run the NHI in an efficient manner. 

4. Another fundamental defect of the Bill and its accompanying memorandum is that no justification is presented for the attempt to exclude private medical schemes from the greater part of the South African health sector. It is illogical to expect patients to fund the NHI through increased taxes, but then at the same time to remove their freedom of choice if they want to continue to use private medical aid for their needs, to be funded from their personal after-tax income. 

5. Government also continues to underestimate the complexity and scale of establishing the NHI and will not be able to keep to its announced timeline of implementing it by 2026. An over hasty attempt to get the NHI up and running, can only cause further damage to the country’s health system. In the context of a highly constrained fiscal situation, the risk is that the substantial costs of re-engineering the health system may mean that real per capita Government expenditure on the provision of health care may actually drop. 

6. What therefore needs to be done, if universal health coverage is to be pursued? 

  • first of all, a properly functioning public health service has to be put in place, and here issues of management and accountability have to be addressed, rather than financial ones; 
  • secondly, a private sector health service that is properly regulated by Government; 
  • thirdly, the private sector needs to be consulted in a substantive manner on the NHI, in order to approach the project in a collaborative manner, as a lack of co-operation and commitment by the private sector will effectively torpedo the implementation of the whole NHI structure. A new system can only succeed with the consent and support of health care service providers and it is naïve of Government to imagine otherwise; and
  • fourthly, clarity has to be obtained as to the cost of the NHI and confirmation from National Treasury that the project is affordable.

7. Only once these goals have been achieved, can a comprehensive NHI be reconsidered. In effect, the Bill and the comments by persons who are responsible for its implementation, are creating the impression that the NHI is being invented as it goes along. As a consequence, the NHI project has led to a great deal of insecurity amongst the South African public in general, and in particular, professionals and employees in the health care sector (both public and private). 

8. The effect of the way in which the NHI project is being driven by Government should not be underestimated: any attempt to deal with a major project such as the NHI in a manner which lacks credibility, will inevitably have a detrimental effect on the perception of Government’s general ability to deal with a daunting social and financial challenge. As a result, further damage will be done to business confidence, which is a crucial element in investment decisions and ultimately, in driving economic growth and increasing employment. In the fourth quarter of 2019, the RMB/BER Business Confidence Index was at its lowest point since 2009. 

9. It is not the principle of universal health coverage which is the problem, but the manner in which Government is trying to implement it. In our view, the Bill is the result of an irrational process, it is seriously defective and will cause yet more damage to an already struggling health sector. We therefore recommend that the Bill be withdrawn.

Anton van Dalsen
Legal Counsellor