This is exactly what happens when you start reading the National Health Insurance Bill — expecting a major step in the establishment of universal health coverage, you quickly realise that it is nothing more than a payment system that is to be superimposed on the malfunctioning public and private health services, with none of their faults being addressed in any way.

It is staggering that most persons who comment on the NHI Bill do not seem to realise this. Government statements on the topic just continue to present it as something that will cure all ills and any detail is avoided.

It is extremely important to understand what this Bill contains and in order to assist, the main points are set out below.

Sole purpose of the NHI: A payment system

There are serious problems in both the public and private health sectors.

The public health system’s problems receive regular attention in the media and in addition, everyone has anecdotal evidence on this subject. Less focus is usually placed on problems in the private health sector. In this context, reference needs to be made to the findings of the Health Market Inquiry, whose findings were published in 2019. It found that the private healthcare market is characterised by high and rising costs, with significant over-utilisation, without being able to demonstrate improvements in health outcomes. The inquiry specifically stated that the Department of Health is not using its legislated powers to manage the private healthcare market, and comes to the conclusion that the private sector market is neither efficient nor competitive.

The NHI Bill offers no mechanism for addressing these issues. It continues to leave the monitoring and management of both malfunctioning sectors to the Department of Health – despite its inability to date to manage either.

Absence of a feasibility study

For a project of the dimensions of the NHI, one would have expected a thorough feasibility study. Such a study would include a full analysis of the project’s requirements and would provide financial forecasts for a variety of scenarios. Typically, one would expect this, at a minimum, with a comparison of the cost of basic, intermediate and full level cover, in order to be able to assess what the state can afford.

However, there are no such financial estimates available. Instead, we are left with glib and evasive comments on this topic, which cannot be taken seriously. Examples in this context are: “the demand that the NHI Bill should indicate costs is unfair because costs change over time” (per Dr Olive Shisana, former special adviser in the Presidency) or “What is it going to cost? It’s going to cost as much as we can afford” (per Dr Nicholas Crisp, Deputy Director-General of the Department of Health).

If any bank were to be approached to approve the funding of a start-up project of such massive dimensions, it would require a detailed feasibility study, prepared by experts in the relevant field, which would clearly point out what the risks are and what the financial requirements may be for a variety of scenarios. If such material is not available, whoever approaches a bank’s credit committee would be laughed out of the building. To put it bluntly, if we contrast this with the NHI Bill and its background, we cannot avoid seeing the process as one of flying blind and making it all up as it goes along.

The Constitution states in section 27(2) that the state must take reasonable and other measures, within its available resources, to achieve the progressive realisation of the right of access to healthcare services. However, without any reliable cost estimates, it is impossible to assess what duty the state has in the present circumstances.

The last substantive mention of the NHI by the Minister of Finance in a budget statement was in the 2021 Medium Term Budget Policy Statement, where it was stated that:

“A limited costing of the national health insurance policy proposal has previously shown that it would require about R40 billion per year in additional funding in the first five years, and perhaps considerably more over time. At present, however, there is insufficient capacity in the health sector to work substantively on national health insurance. The national health insurance indirect grant has been underspent, the National Health Insurance Fund has not yet been established and the National Health Insurance Bill still needs to be passed by Parliament. It is therefore unlikely that national health insurance will be a significant cost pressure in the medium term.”

One would therefore assume that from National Treasury’s point of view, the matter has effectively been shelved for the moment, but it is not clear whether this message has reached the Department of Health. This attitude of National Treasury is in line with the contents of its 2023 Budget Review, where the only mention of the NHI is that a total of R1.35bn is to be allocated over the next three fiscal years to the NHI indirect grant to enable construction of the Limpopo Central Hospital in Polokwane.

The prohibition on medical schemes to offer cover

Clause 33 of the NHI Bill provides that medical schemes may only offer complementary cover for services not reimbursable by the NHI Fund. No reasoning is provided for this prohibition and it is impossible to guess on what it is based. It is difficult not to be flippant in this regard, but the only possible reason that comes to mind would be the remnants of centralised economic thinking, dating back to the time of the Soviet Union.

Since the funding of the NHI will be provided by tax revenues, the logical question arises as to why persons who are tax-compliant, should be prevented from paying over any discretionary funds they have available to a medical scheme for their medical expenses. This would in no way infringe on the funding of NHI. In any event, there is little chance that this clause will survive a constitutional challenge.

On this aspect, the question arises as to why medical schemes have not been active in opposing this prohibition in the public discussion on the NHI. One can only assume that they know that this clause will not be sustained in the legislative process and as a consequence, do not feel it helpful to antagonise the health authorities unnecessarily.

What entity is going to manage the NHI?

This will have to be a newly constituted entity, with a massive administrative and financial responsibility, if one assumes that South Africa’s full population and the medical sector as a whole will be affected by it. The NHI Bill provides that this newly constituted entity will be completely dependent on the Minister of Health for all appointments relating to its board, chief executive officer and specialised committees. In addition, the Minister is also empowered to appoint a Stakeholder Advisory Committee, which would comprise representatives of health professions and civil society, but this committee is accorded no duties, power or responsibilities. Neither the Minister nor the NHI Board are even obliged to consult it. Why it is included in the NHI Bill in this vague manner is anybody’s guess.

We are therefore to be confronted with a state entity, entrusted with the payment of all bills relating to health services. Given the astounding degree of inefficiency, incompetence and corruption encountered in state-owned entities, what confidence can one have that this one will be able to fulfil its obligations as intended — particularly given the very substantial financial flows?

Overall, one cannot avoid the feeling that government is out of touch with the complexity and scale of the whole NHI enterprise. In addition, one has the impression that the comments on the NHI Bill coming from government are being presented as part of a ritual, without any real belief that it can be implemented in its current form. It is just considered politically unacceptable for anyone in government to say that on a public platform.

Conclusion

The principle of universal healthcare is very important and should be pursued. However, taking into account the various points that are raised above, the level of inadequate research, analysis and planning that underlies the NHI Bill is astonishing.

If universal healthcare were to be pursued in a logical and rational manner, the following is needed:

• a properly functioning and managed public health service;
• a private sector health service that is properly regulated by government;
• the continued availability of private medical schemes to those members of the public who are able to afford such services; and
• clarity that the NHI is affordable and that government has the means to implement an efficient and reliable entity to manage it.

The decade-long crises in the Compensation Fund and now the Road Accident Fund starkly illustrate what a failure to take these steps holds in store. DM/MC