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NATIONAL HEALTH INSURANCE

Ramaphosa ponders giving private sector more say in NHI roll-out – presidency spokesperson

Ramaphosa ponders giving private sector more say in NHI roll-out – presidency spokesperson
South Africa's President Cyril Ramaphosa signs into law the National Health Insurance Bill at the Union Buildings in Pretoria, South Africa, 15 May 2024. (Photo: Reuters / Siphiwe Sibeko)

President Cyril Ramaphosa had ‘noted the concerns expressed by some business leaders about his signing into law of the NHI Bill’, and was considering how to give the private sector greater input into its implementation, according to his spokesperson, Vincent Magwenya.

In response to substantial backlash elicited by his signing of the National Health Insurance (NHI) Bill into law on Wednesday, President Cyril Ramaphosa is “giving thought to a mechanism” for greater engagement and collaboration with business, labour and other social partners, according to his spokesperson, Vincent Magwenya.

“Our legal framework also allows for amendments to be made if necessary,” Magwenya said.

On Friday, Business Maverick reported that one of the biggest concerns around the implementation of NHI was that there is very little solid detail in the Act. Costs and benefits were the two key issues in the NHI Act that faced constitutional challenges, said Neil Kirby, the director and head of healthcare and life sciences at Werksmans Attorneys. 

Legal challenges are already in the works from the trade union Solidarity, the Health Funders’ Association, the South African Medical Association, the Board of Healthcare Funders, the South African Health Professionals Collaboration and the Democratic Alliance.

Read more in Daily Maverick: It’s business as usual for medical schemes, with NHI implementation years away 

Business Unity SA CEO designate Khulekani Mathe said, “The Act has procedural unconstitutionalities. The Bill provides for public consultation and the Constitution’s drafters did not just mean a tick-box exercise. We put substantive considerations to Parliament that were completely ignored, and this violates important parts of the Constitution. 

“What makes this difficult is that we are passing a law without knowing how it will be funded. The government has not put forward substantive funding details. There is a flimsy reference to pooling (public and private sector spending on health). Still, unfortunately, money in the private medical aid sector comes from individuals making individual decisions to contribute to a fund. The only way to make them contribute is by imposing a tax.” 

Read more in Daily Maverick: Everything you ever wanted to know about the NHI but were afraid to ask 

Mathe queried why the government had not partnered with business to work out the details of NHI. “Why does a government that has seen the benefits of working together in the energy space, logistics, crime and corruption, and pooling our resources, think it can do it alone regarding healthcare? We are trying to get our heads around it.” 

Responding to questions from Daily Maverick on Sunday, Magwenya said, “We’ve noted the varied responses towards the President’s assent to the NHI Bill. The President has found it heartening that large sections of our country’s population have welcomed his signing of the Bill. Equally, we have noted the concerns expressed by some business leaders.

“The President is giving thought to a mechanism that will allow for more engagement and collaboration with business, labour and other social partners as we begin to roll out the implementation of the NHI.

“The implementation will be rolled out in a phased manner; there is no element that is going to happen overnight or be managed in haste. Our legal framework also allows for amendments to be made.

“Therefore, the President will be looking for those opposed to the NHI to rise to the occasion and be part of a collaborative effort to make it work for the benefit of all South Africans. We already have successful case studies of collaboration between government and business, particularly in the energy and transport and logistics sectors. Therefore, we can collaborate to ensure that NHI truly delivers to the vision and commitment of universal access to quality healthcare.” 

Read more in Daily Maverick: NHI fund will take decades to roll out — we answer your burning questions 

The cost

Asked about the money that will have to be raised to fund the NHI, Mathe said, “We calculate that what’s needed is an additional R200-billion to fund the NHI. The questions include how you will impose a tax and whether it will be personal income, VAT, or corporate tax. Whichever way you look at it, it will be substantial. 

“We have maxed out our ability to tax individuals — we are taxed at among the highest levels in the world. To pass a law without dealing with these issues is a challenge. It will have massive macroeconomic implications. 

“The Act creates a fund called the NHI Fund (like the Road Accident Fund or the Unemployment Insurance Fund), which has substantial governance difficulties. Do you want to do that in the health sector with all the risks attached? Even if you can guarantee no corruption, there are still difficulties. 

“For example, if it’s a single purchaser model (where the state purchases all health goods and services), it and only it pays a GP for seeing me. I walk in, the GP takes my details and collects no cash. That GP may not get paid. The government struggles to pay small businesses, and GPs may be forced to close their shops and go somewhere else to make a living. This model has these risks for suppliers of healthcare, medication and equipment, for example. How will that doctor live if they are not paid for six months? 

“Section 33 of the Act says that when the law is fully implemented, medical aid will provide those services not provided by the fund. Right now, the benefits package needs to be defined. Will whatever is not covered still make medical aid viable? It shuts the door to medical aid by that. If you tweaked that section and created a provision for the fund to co-exist with medical aids, it can be successful.”

Business Unity SA CEO designate Khulekani Mathe. (Photo: Supplied)

Optimal outcome

Mathe also answered the following questions:

Question: The status quo does not work because it creates a massive inequality in healthcare. What does an optimal outcome look like?

Answer: There is definitely a need to reform our health sector. We support the goal of universal health coverage. It’s how we get there that matters. There are ways to get us there without causing the damage we foresee. 

The private sector has made submissions proposing a low-cost benefit option for 10 years now (since 2015). This would create a medical aid-lite. People contributing roughly R300 could access a package of primary health in the private sector that would cover between five and 10 million people. 

You can transition people to the private system by making a minor tweak. That’s not been approved for over 10 years — these incremental improvements can go a long way to make improvements rather than a sledgehammer approach. You can tweak section 33 of the legislation for a start (this is the part of the law which could outlaw medical aids once fully implemented).

Q: Does that deal with the health Gini coefficient, the massive gap between what most people get through healthcare and what some who can access the private system receive? In addition, the health market inquiry has shown significant profiteering and overpricing in the private sector, which pushes up costs for those same burdened taxpayers.

A: I can’t answer the profiteering question, but I’ve given an example of reforms that would get us on the way to universal health coverage. The private sector has the capability and means to train healthcare personnel, but the law prevents them from doing so. We are astonished at the inability to see these ideas. 

Making wrong decisions could result in a system that collapses. It’s not sustainable. If the whole system collapses, that equalises human suffering. I’m not pretending to be a health systems expert — others can do that. Given the direction of the position of our country’s ability to finance things, as things stand today, we have all but exhausted the ability to borrow because of our debt stock and debt levels. If you borrow more, you run into unsustainable debt levels — that would mean expenditure cuts.

Borrowing to fund the NHI is not an option. Taxing to fund only makes sense in a growing economy. We could see a system collapse without getting the economy into shape before imposing a tax. 

Q: Has South Africa hit the Laffer Curve (where additional tax increases can result in lower compliance and collections)? SARS Commissioner Edward Kieswetter is finding more and more revenue, so perhaps we have not.

A: I’m not a tax expert. Where he [Kieswetter] is finding more and more is among tax evasion culprits. What we’re talking about is that the NHI would increase taxes for everybody. Would the SA economy be able to tolerate a 1% tax increase in VAT (although we know it requires far more) or one or 2% in personal income taxes? This could impact tax morality. The higher and higher you raise taxes, the less people can tolerate it. 

Q: What is the way forward?

A: It will be unfortunate when this ends up in the courts. We lose when things lose the opportunity to progress. Even if Busa does not [go to court], a queue of others will take this to court. We pleaded with the President to return the Bill to Parliament for reconsideration. 

Q: What did he say?

A: He did not respond. We wrote a petition, which was not responded to, and the announcement was made.

Q: Has Busa sent another petition [after the law’s announcement]?

A: In reality, it will change nothing. We don’t believe it was made because the Presidency was unaware. A different calculation was made. The impact on investor confidence, especially in the health sector, is huge. Anyone thinking of investing in healthcare is thinking twice. DM

Gallery

Comments - Please in order to comment.

  • Glyn Morgan says:

    Ramaphsa is panicking! Ha! EFFING HA!!

    • Jacques Siebrits says:

      I guess he was shocked by the negative response. So now he is applying his mind.

    • Denise Smit says:

      He is not panicking , it is a calculated election ploy to make you think he is going to be more accommodating. Covering all ground before the election

    • Denise Smit says:

      Just moving away from from nationalized electricity because of the destruction caused by the government, now nationalizing health. how bright can you be

    • Paddy Ross says:

      Ramaphosa may well be genuine now in his desire to listen to the business community and other professional bodies but one can guarantee that his aim in signing the Bill into an Act was to influence the election outcome by conning a vast number into believing that this “Rolls Royce” healthcare system will be here tomorrow. Those gullible voters will be unaware that the ANC is incapable of achieving this mythical Rolls Royce.

  • Walter Spatula says:

    Our weak president gave them the finger, in a calculated political move. Why should they now work with him?

  • Shaun Pastor says:

    “The President has found it heartening that large sections of our country’s population have welcomed his signing of the Bill.” Words, words, words. Does he really think we are as illiterate as the 8 out of 10 Grade 4 students who are illiterate in this country?

  • drew barrimore says:

    Oh my goodness. The ANC’s President (forget the rest of SA) is pondering something. He has ‘noted concerns from some business people’ (not ordinary South Africans, not NGO’s, not most of the medical sector). He did not note these concerns months, even years ago, he noted them after he ‘found his pen’ and signed the law. He did not note Zuma selling the country to the Guptas. He did not note the dollars in the couch. He did not note that the Police Minister he appointed should be playing a clown at kid’s parties. He did not note that his organization destroyed public health care across the country except the Western Cape.

  • Antonio Tonin says:

    Cyril, you remind of that old maritime lost in translation joke: “Mayday, mayday, we’re sinking!” say the medical and healthcare professions. “What are you sinking about?” asks Cyril

  • Antonio Tonin says:

    Brilliant funding model. First you shaft the individual taxpayer, overburdening him or her completely, then you shaft the private sector, which leads to pension fund values shrinking which means, Cyril, you knock the ordinary tax paying citizen down, then you kick them hard as they lie there wounded. A masterstroke!

    • Mike SA says:

      Thats right he has complete contempt for the tax payer who he refers to as the “haves” forgetting that it is the “haves” who pays for his personal protection and that of the other parasites.

  • Hedley Davidson says:

    I find it infuriating each time I read about these incompetent thieving scoundrels who make ill considered and irrational decisions to curry favour with millions who they ensure are illiterate and dependent voters . Just name one successful initiative in 30 years , yet the list of failures is long . To say we have provided electricity and water – what – unreliable illegal connections and non potable water with sewerage in the streets . A disgrace to any citizen . Please stay away from trying to run anything , outsource everything and live like kings, but if you are not part of the solution you are part of the problem.

  • Sydney Kaye says:

    Take no notice of this sly intervention. Full speed legal action and do not get co-opted.

  • Thinker and Doer says:

    Why were there not these discussions held BEFORE the legislation was passed? There were proposals made to adjust the legislation to potentially implementable, but they were repeatedly ignored, and the legislation rammed through, in largely the form it was originally introduced. The Statememt by the Presidency notes comments made by “some business leaders”. What about the comments of taxpayers who are facing unaffordable taxes, and another round of looting and corruption on a massive scale, associated with a completely unimplementable programme by government, and complete chaos and decimation of health care? Clearly the concerns of taxpayers don’t count for anything. The President is only scared of the prospect of Constititutional challenge. The court challenges must be launched, then we will see how willing the government is to engage.

  • Jane Crankshaw says:

    Please bear in mind we are an African country and a fledgling integrated Democracy that has been through the upheaval of radical economic transformation….. CR has to step carefully so as not to upset the majority whilst relying on the minority to pay for the future of this country…..of course he needs dialogue with the Business Community – the very people who represent the minority and who are, at last stepping forward to find the way forward!

  • Jennifer D says:

    There is only one reason for the ANC to implement the NHI and that is to gain access to the big pot of privately (mainly post tax) contributed health care funds. Does he think the private hospitals will continue to function, or that private doctors will remain in SA – no, he is fully aware that under his guidance, the functioning private health care (which we can be sure he uses himself), collapses. So, no problem, Cyril and his cronies, having raped the countries assets, will fly to Russia (or China) or, to Harley street in emergency, for healthcare, and the previously well functioning private hospitals will collapse from no funding, no equipment, no beds, millions of patients. The outcome of the NHI is not healthcare for all, it is money in the pockets of the ANC and healthcare for none.

  • michael james says:

    The President is a very dishonest man and would probably eat his children to stay in power. Business SA saved the country after receiving some promises, Time will treat him badly

  • Lynda Tyrer says:

    I hope no one believes him because for years private sector has been trying to tell him the idea will not work this way and been totally ignored. Maybe now he understands that the private sector is sick of his games, and ready to stand up to his party’s controlling ways.

  • Geoff Krige says:

    SA has people who suffer unemployment. Let’s set up a fund to help them – UIF robbed and broken by the ANC.
    SA has people who suffer following motor accidents. Let’s set up a fund to help them – RAF robbed and broken by the ANC.
    SA has students who are unable to pay their fees. Let’s set up a fund to help them – NSFAS robbed and broken by the ANC.
    SA has indigent people who cannot find work. Lets set up a fund to help them – SASSA robbed and broken by the ANC.
    SA has people who struggle to get adequate health care. Let’s set up a fund – NHI. Why would anyone think this will be anything other than robbed and broken by the ANC.
    I happily agree that all the people of South Africa deserve access to good health care. But NHI run by the ANC is certainly not the way we will get there.

  • Mike SA says:

    When discussing the status quo of he health sector DM, you need to compare apples with apples because what medical aid members get it is what they pay for despite paying in their tax for a facility they do not use ie the tax contributions of every private medical member pays for at least four indigent persons .
    Private medical aids paid for by after tax income does not cause inequality, what causes inequality is the failed socialist economic policies that our government and as it appears from the questions, that DM subscribe to.
    Clearly the DM subscribes to the socialist policies of everybody must be reduced to the lowest common denominator because that is the inevitable outcome of socialism.
    Right now one can read in the Daily Mail UK that people are finding it impossible to get a GP appointment in the UK for at least six months and that its citizens are opting for private medical aids.
    We already have a system where the medical students are not the best by at least 20% which is the racially skewed University admission entry requirements.

  • Trenton Carr says:

    “We are trying to get our heads around it.”

    One of the most obtuse takes around this train wreck I’ve seen.
    Are you saying you don’t see that ramaspineless signed this law as an election ploy?

  • Blingtofling HD says:

    Yes please. Involve the private sector. 99% private and 1% state. Then you will see some action. Just as with power for electricity. But I wouldn’t get too excited. Overtures at voting time is just as empty as the other promises made. To make an improvement in the healthcare, start by getting the thousands of med professionals standing in queues in UK, the Nertherlands …. and you can go on ad finitive, back to help restore our country

  • John Lewis says:

    Business leaders would be wise not to be deceived by this olive branch and to continue to use every legal tactic they can to delay this terrible piece of legislation or get it amended.

  • John Lewis says:

    Business leaders would be wise not to be deceived by this olive branch and to continue to use every legal tactic they can to delay this terrible piece of legislation or get it amended.

  • Graham Smith says:

    Now squirrel realises that he’s made a deliberate f.up, he says he’ll consider input from private sector. So the taxpaying people must come to the rescue again. Just like an obnoxious and delinquent child. Shame on him. The sad part is that he has no shame. Get rid of the anc. NOW.

  • Mark Penwarden says:

    I love how he’s only noted concerns NOW and not the same concerns raised over and over again since the NHI inception. The ANC just ignored everyone so they could get it signed in (for electioneering) and make it look like they actual have done something constructive. They don’t like the private sector cause it asks the important and difficult questions the ANC hasn’t thought or cared about. I mean free healthcare in a country with the highest unemployment, a shrinking economy, a dwindling tax base and out of control government corruption and mismanagement.

  • Hilary Morris says:

    Oh Please! Long gone are the days when anyone who can follow what has happened to SA believes a word our president says. The smile, once found charming, is no match for the near total destruction of our (yes, all of our) country. Election promise that will go the way of all the others. This health bill is – quite literally – sickening.

  • TS HIGGO says:

    According to Wikipedia, Ramaphosa has a law degree. Generally in first world countries one assumes the person studied and earned such a degree. In South Africa degrees are often bought, largely from universities in the Eastern Cape or bogus London “universities”.

    Now I’m no lawyer, I’m an ordinary person with an average IQ… but one thing I’m aware of is that when you sign a contract (pass a new law), the contract has legal standing. Imagine going to court and arguing after the fact that you were intending to negotiate the terms of the already signed contract on the trot. You’d be thrown out of court.

    This is the man running our country with an advanced economy. This is the man who’s promised on the campaign trail to do to healthcare what the ANC has done to the economy.

    What a joke, but the ANC voters have lapped it up and will swarm like flies to the polls to vote for the corruption to continue and the ANC will continue to eat cake

  • Tim Price says:

    Best for the private sector to stay well away until the dust has settled from the inevitable court action that will follow.

  • William Stucke says:

    DM continues its downward spiral of massively biased reporting. Item 1 for the prosecution:

    > Question: The status quo does not work BECAUSE IT CREATES A MASSIVE INEQUALITY IN HEALTHCARE. What does an optimal outcome look like? (Emphasis added)

    Why is a value judgement inserted into this question? We know why the status quo doesn’t work, and it’s nothing at all to do inequality in healthcare. It doesn’t work because of the ANC’s policy of cadre deployment and the incompetence and massive corruption resulting have destroyed the public health system. For example, Bara is a teaching hospital. Its services used to be excellent and were provided to everyone at little or no cost. This is what public healthcare used to be, before the ANC destroyed it.

    What competent journalist asks a question with the answer in the question itself?

  • Stephen Paul says:

    Oh so this negative response to the NHI bill has come as a complete surprise to our President?
    There is very little it seems by which he is not shocked.
    What does he do all day ?

  • Glyn Morgan says:

    What does a certain Dr. Crisp have to say?

  • Johan Buys says:

    More than likely government realizes they can’t execute or fund this and what happens is that a few large medical aids consolidate and the new entity is contracted to the core function of national claim administration, coupled with prescribed rates for almost all treatments provided by anybody.

    So any citizen can go to any provider and the “fund” pays the provider R123 whether that provider is a state one or a private one. Citizens pay nobody. All employees pay toward the fund, medical aid tax deduction disappears. Gap cover and hospital plans and premium medical aid levels and annual limits all become moot as there is only one rate the provider is paid. Maybe after an interim ramp-up phase they can get there.

  • Pieter van de Venter says:

    Oh Cyril. What a mess you have made!!!

    There is inequality in lots of areas. The majority of South Africans are not getting R 5m per year like boss at the parliament, not all citizens have 2 x R1.5m cars, with loads of VIP protection SAPS members, not all citizens fly around the world in a private Boeing Business Jet. So what. It is a fact of life.

    On the other hand, not all South Africans get electricity, water and land for free, or study for free from grade 1 to university. These are ALL things paid for by the tax payer.

  • Albert.questiaux says:

    Another election promise that will be broken and that will further erode voter trust in them. The ANC will lose more votes at the next 2029 election.

  • Rae Earl says:

    This clown of a president has painted himself into a corner. He misjudged completely just how widespread and vicious the reaction to his stupidity in signing this document would be. Now running backwards like the coward he is by hoping private medicine will help him out. They don’t need to. His best bet would be to negotiate a deal where private medicine runs his rotten department instead of his comrades and cadre buddies who have looted and plundered the industry for years.

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