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After the Bell — the election hoax that is the NHI Act

After the Bell — the election hoax that is the NHI Act
President Cyril Ramaphosa after signing into law a national health bill that aims to provide universal coverage to South Africans, at the Union Buildings on 15 May 2024. (Photo: Reuters / Siphiwe Sibeko)

This government hasn’t yet earned the right to try to implement a system as huge and complicated as free healthcare. I for one would be so much more inclined to support the government’s intention here if it could run a post office, for example, but it can’t.

At last, very late in this election cycle, we have a real policy debate; it’s just a pity it is only a few weeks away from the actual vote and therein lies the problem.

The debate around the National Health Insurance Act puts a free-at-the-point-of-use (I’ll shorten this to “free” for the rest of this article) national health service directly on the agenda. It’s a great debate to have, partly because the issues involved are very complex and have an enormous impact and, as it happens, cost.  

At root, however, there are only three issues to consider: 

  1. Does free healthcare work?;
  2. Will it work in South Africa at this moment in history?; and
  3. Will the NHI Act, as legislated, bring about the desired result?

The answer to the first question is, I think, on balance, yes. Take a look at the graph below.  

NHI

This is a recent comparison of national health systems; the key figures to compare are the US, which has a mostly private system, and any number of European countries, which have largely free systems. The US is spending just below 17% of its GDP on healthcare and getting results that are notably poorer than Italy, for example. But of course, it’s not as simple as this. 

One of the questions people never ask is whether it would be possible for European countries to get the healthcare results they do if the US healthcare system was also generally free at the point of use. One of the main reasons Americans pay more for healthcare is because medicine is hugely more expensive there — pharma companies recoup their enormous research budgets mainly in the US. However, the benefits of US medicinal research, which has a more entrepreneurial system, are utilised all over the world. So in a sense, European systems are freeloading off US entrepreneurial progress. 

It’s also worth noting that even between free systems, there are very big differences in outcomes. When I lived in Europe, my German friends said they would never go to a British National Health Service (NHS) hospital, and you can see why in the health outcomes. The NHS is a fabulous system, from a South African perspective, but the maternal mortality ratio is double that of Germany’s, so it has its problems too. It shows that implementation is key. 

But, for the sake of argument, let’s give the free systems the thumbs-up in a general sense. There is a good reason from economic theory to do so, because when it comes to making choices about healthcare, we the public are at a huge informational disadvantage.  

A market economy, ie, the kind that works, is based on free choice, but free choice requires more or less equal knowledge between buyers and sellers. In a healthcare system, we don’t and really can’t second-guess our doctors.  

But above all, the free at the point of use system is just fairer. Even for me, a dedicated believer in free markets and entrepreneurship, I’m happy to accept the utility of wealth disparity if it’s based on fair competition and is an outcome, not an initial condition. But conceptually, healthcare inequality is unacceptably grievous. 

Read more in Daily Maverick: Understanding the National Health Insurance Bill – Six articles to read

So, the second question: Can SA introduce free healthcare now? The answer to that is clearly “no”. Most of the Western free systems were introduced in the shadow of war when there was a huge public consensus on the need for fast, effective healthcare systems. Populations were willing to make enormous sacrifices to ensure that these systems were established. They are today massive, massive systems.

The question that the SA situation poses is the opposite: can you go from an established dual system with some free healthcare at the point of use, and a private health insurance-based system, to a single, free-at-the-point-of-use system? In other words, you are asking everyone benefiting from the existing healthcare insurance system and paying for it, to give that up in favour of a system where they will get worse service. Really? That’s going to work? 

Enormous hypocrisy

I don’t think that is realistically feasible and you can see that in the enormous hypocrisy of the politicians who voted for the NHI Act, even though they are all using private healthcare. The reason is understandable: the government system sucks. 

SA’s child mortality rate is about 24 per 1,000 live births, and there are 88 maternal deaths per 100,000 live births. The flip side of this statistic is that SA’s child mortality rate is improving rapidly — and here is the irony — as more people join the private system. SA’s infant mortality rate is down by about 20% in the past decade. Will degrading the private system increase or decrease this figure? That depends, obviously, but my guess is it will make things worse.

And question three: Will the NHI Act bring about a free system? Obviously, that’s the intention, but sadly the Bill itself is gobbledygook. Just for a start, it doesn’t define healthcare, and because it doesn’t, its cost is unknowable. If the intention is an allopathic system, then it will cost at least an extra R200-billion a year, on top of the existing R250-billion the government spends on the current generally free system.

Read more in Daily Maverick: 2024 elections

That will be a bit less than the R270-billion South Africans spend on private healthcare. If implemented now, it would bankrupt SA, but knowing that, the intention is to implement it incrementally. However, the general assumption is that private systems are going to reduce their fees as the government allocates to itself, progressively, a monopoly on specific healthcare functions handled now by the private sector. Really?

Even the name is a misnomer: it’s not an insurance-based system — it would be great if it were. It’s really just a taxation-based system, with the money piled into a fund controlled by an institution essentially separate from the government. Does that not scream at you: “This is going to be a huge, corrupt mess”?

The ways it seemingly violates the Constitution are multitudinous. For example, it essentially designates healthcare as an exclusively national function (very ANC, BTW), in contradiction to the Constitution, which considers healthcare a joint national-provincial function. Leon Louw from the Freedom Foundation calls it “the biggest, most idiotic, most unconstitutional, most counterproductive and most corruption-prone law in history”.

The fact is that this government hasn’t yet earned the right to try to implement a system as huge and complicated as free healthcare. I for one would be so much more inclined to support the government’s intention here if it could run a post office, for example, but it can’t. So forgive me, but until we have a little more track record for something as important as our healthcare, I’m going to continue paying those extortionate private healthcare fees. DM

Gallery

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