The marvel of an un-costed NHI

The National Health Insurance (NHI) has been top of mind among the country’s healthcare brokers and medical schemes citizens ever since it emerged that government intended medical schemes to function as insurers of last resort, covering only non-NHI medical procedures. Citizens, meanwhile, and more specifically those who pay the taxes, are more concerned over government’s ongoing refusal to reveal what the scheme will and will not cover and exactly how much dosh taxpayers will have to chip in for it. Over a decade since the NHI was first proposed, we remain almost completely in the dark about these critical aspects.

On a wing and a prayer

The cost of providing a comprehensive NHI has been a bone of contention for as long as this writer has been reporting on the matter. Yet repeated calls for a detailed costing of the scheme have been fobbed off by the powers that be with grandiose declarations that universal healthcare is a social imperative that must be provided, regardless of cost. Their typical on-a-wing-and-a-prayer refrain: the budget will follow the policies and the need: we will implement it and figure out how to pay for it later. 

Presenting in Parliament recently, National Treasury’s Ismail Momoniat said that permanent tax increases are inevitable to fund NHI and other social programmes. In this context, it is fairly certain that NHI will be funded from an additional payroll tax and surcharge on income tax… But since government refuses to run the exact numbers there is no way of determining whether the countries dwindling taxpayer base and / or their employers will be able to sustainably pay these increases. In this writer’s humble opinion, no lasting decision on NHI should have been taken without full transparency on cost and coverage. 

Despite this glaring oversight, the Portfolio Committee on Health (PCH) has already heard oral presentations on the NHI Bill from no fewer than 116 individuals, institutions and organisations. My thought on the matter: how can anyone venture an opinion on a scheme without the information needed to inform that decision? Surely the public hearings held on NHI absent cost and coverage facts are moot. A quick trawl through online comment sections and social media feeds following the months-long public hearings suggests that South African taxpayers are fed up with the lack of clarity. 

To get a sense of the many known unknowns, we dive into a recent comment and analysis piece by Alicestine October, published on www.spotlightnsp.co.za. The article picked up on four themes that emerged following the 25 days of public hearings. 

Bashing the naysayers on principle

The first is that Members of Parliament (MPs) insisted on deflecting criticism of the scheme by pressuring presenters to declare whether they were for or against it. “In the majority of the oral submissions, stakeholders expressed support for the principle of universal healthcare, acknowledging the inherent inequities of the current health system arrangements but many had doubts if the NHI Bill will get us to universal quality healthcare,” wrote October. Government has repeatedly indicated it will push ahead with NHI despite mounting concerns that the NHI Bill, as proposed, has little hope of delivering on its universal healthcare objective. Labour union Solidarity reportedly stood firm in this regard, trashing the Bill as unaffordable, unnecessary and unworkable. 

The unworkable aspects of the scheme were repeated in the second theme, which October described as concern over existing healthcare services. In this regard, Democratic Alliance MP Siviwe Gwarube subsequently told October: “While the state may be able to provide some kind of standardised access to healthcare, quality is a massive problem in South Africa … big investments into infrastructure, human resources, and governance structures would need to be made before universal healthcare is finally realised”. Common sense would dictate that the existing public healthcare infrastructure be 100% capable before expanding the number of citizens it will serve and / or the scope of medical services it must offer. 

Yet PCH Committee Chair Dr Kenneth Jacobs told October that NHI brings hope as “an opportunity to equate the health outcomes for all people” and that the journey must “start with the political will to bring about this opportunity for all”. He added that government “had to start somewhere and not look at what we do not have in place but rather at what we do have and improve as we go along”. And that, dear reader, sounds like step one on a journey to abject failure and continued pain and suffering for all. It is political ideology over reality! 

The narrow taxpayer base and unemployment dilemma

Enter theme three, which deals with our opening-paragraph bugbear, namely health budgeting and financing. It is reported that many public submissions raised concerns around the affordability of the scheme, the task compounded by the fact that no one could offer a clear view on cost and coverage. The country’s largest open medical scheme recently estimated a R212 billion funding gap if the approximately nine million medical scheme beneficiaries were absorbed into the NHI structures. This total, an estimated 44% of total healthcare funding in South Africa, included private health spending plus medical aid financing. 

Dr Anthea Jeffery of the Institute of Race Relations was critical of government’s ‘implement regardless of cost’ stance. “That is frankly irresponsible,” Jeffery said. “There was an assumption that the NHI would be some magic golden bullet that would solve all those problems. In the real world, one had to look very carefully what the unintended consequences might be, the unexpected costs and the overall impact on the economy.” October summarised Jeffery’s concerns, which included that NHI would not be sustainable without better economic growth and that the Bill offered no credible financing mechanism and will be unaffordable. The Democratic Alliance, meanwhile, commented that the funding model the Bill proposed would be impossible to fund. 

Funding is a non-issue, it is legislated elsewhere

The PHC Chair was reportedly non-plussed by cost concerns… The view expressed by Jacobs, which we precis from October’s piece, is that clause 48 of the NHI Bill allows the South African Revenue Services (SARS) to collect revenue for an NHI Fund and that clause 49 indicates that “the Fund is entitled to money appropriated annually by Parliament to achieve the purpose of the Act”. Wow! This writer’s jaw dropped. This is akin declaring: funding is a non-issue, because there is other regulation that allows us to source funding. What if, dear reader, and we throw this out there to play devil’s advocate, what if there are only a handful of formally employed and / or taxpayers funding this juggernaut? 

Theme four dealt with questions over governance, leadership and management with many commentators raising concerns over levels of corruption and the introduction of ministerial superpowers. October covered these concerns in detail and we will only offer a synopsis of each. Under corruption, concerns were raised that “the NHI would be hijacked by corrupt politicians and cadres before it had been properly implemented” with presenters siting a litany of recent tender scandals in health procurement. 

As for ministerial superpowers, there were those who lamented that the NHI Bill would elevate the Minister of Health to the position of the King of NHI. In other words, one minister would rule the entire environment without accountability or political independence. These apparently valid concerns were reportedly poo-poohed by ANC MPs, who came prepared with the usual counter arguments. 

Implement in haste, fund at leisure

For this writer, cost and coverage remain the critical issues. And while we appreciate the scheme might not have major cost implications in the first five years of a staged implementation, we are very worried about what comes next. How, for example, will all but the highest income earners be able to afford both public healthcare and private medical insurance? One would think that some of government’s intentions regarding medical schemes and private service providers within the future healthcare sector would leave rational-thinking private sector stakeholders cold; but even medical schemes, whose very existence is challenged by the far-advanced proposal, have offered limited resistance to date. 

Writer’s thoughts:
Wondering about the future of medical schemes under NHI? One of many comments made by the Department of Health’s deputy director-general for NHI, Dr Nicholas Crisp, to MPs recently is that medical schemes would have to consolidate their options from more than 300 plans across 75 schemes, to one… Do you see any future for healthcare brokers if medical schemes offer only a single benefit option? Please comment below, interact with us on Twitter at @fanews_online or email us your thoughts [email protected].

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