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When corruption is rife...

17 July 2017Jonathan Faurie
Jonthan Faurie, FAnews Journalist

Jonthan Faurie, FAnews Journalist

In attempt to live up to the ambitions of the United Nations that all member nations should work towards Universal Health Coverage, government has been pushing ahead with the ambitious National Health Insurance (NHI) programme.

This has been many years in the making, and as is the case with most government policies, the NHI has seen its fair share of delays. However, this is seemingly a thing of the past as government recently released the NHI White Paper which suggests that forward steps are being made.

The most controversial aspects of the NHI have been its funding and the future of medical schemes in a NHI world.

NHI financing

The financing of the NHI has been a major topic of controversy with a number of methods being suggested by the public and the media.

It is important to gain insight into what government hopes to achieve with the NHI financing. Government aims to move beyond the existing fragmented public and private health financing systems to create a common modern universal health financing system which is cost-effective, trusted by citizens and provides protection against costly health services.

Raising revenue associated with a shift from private spending to public health expenditure requires careful planning. Government adds that within the income accounts of households, this means a declining burden of medical scheme contributions, offset by a rise in general tax allocations to be directed towards NHI. However, the impact on individuals and families will vary, depending on details of NHI design, and depending also on household choices or behaviour.

The White Paper points out that funding for the NHI may possibly be raised through a combination of the following taxes: payroll taxes, a surcharge on taxable income, or value added tax. It goes on to add that the most preferred option for revenue generation for NHI will be through general revenue allocations, supplemented by a payroll tax payable by employers and employees, and a surcharge on individuals’ taxable incomes.

The future of medical schemes

We now get to the key question on everybody’s lips. What is the future outlook for medical schemes?

The White Paper states that making progress towards universal health coverage requires transformation and reconfiguration of institutions for pooling of funds and purchasing of services to achieve income and risk cross subsidisation whilst improving the efficiency in purchasing of personal health services.

NHI funding will be mobilised through mandatory prepayment. Individuals will not be allowed to opt out of making the mandatory prepayment towards NHI, though they may choose not to utilise NHI healthcare services.

With the implementation of NHI, the role of medical schemes in the health system will change and once NHI is fully implemented medical schemes will offer complementary cover to fill gaps in the service coverage offered by the NHI.

Government recognises that there is existing expertise residing in the medical schemes industry. Where necessary and relevant, this expertise may be drawn upon to support the implementation activities for the establishment of a single payer, publicly-administered NHI Fund to build in-house capacity.

Key questions

So it seems that by 2025, the NHI will be here to stay, and there is little that we can do about it.

While government’s ambitions are noble in nature, we need to ask a key question: how can we in good conscience contribute to the NHI when corruption is rife?

There is no doubt that Government will raise a lot of money through its system of a prepayment and then a supplementary tax on households. Attention needs to be drawn to the fact that the Auditor General of South Africa reported that only 49 of the 263 municipalities recently received clean audits for the 2015/2016 period. Further, R16.1billion had been lost to irregular expenditure by municipalities during this period.  This translates to an increase of 50% in fraudulent activities from the 2014/2015 period.

It comes back to the old struggle of conscience; the public doesn’t mind paying taxes provided that tax revenue will be used in the right way. When it isn’t questions are asked and whispers of tax revolts grow. The same will apply to the NHI, the public won’t mind contributing towards it, if the money is used responsibly.

Editor’s Thoughts:
What are your thoughts on the proposals the NHI White Paper suggests? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

Comments

Added by Steve, 17 Jul 2017
Funding proposals are opaque and not sustainable. Existing public health system is dysfunctional. KZN public health system in disarray according to recent reports. This is a microcosm of state healthcare in SA. A single procurer (the state) will offer plenty of looting opportunities. Sorry, it ain't gonna work. No money left in the public purse by 2025.
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Added by Old Timer, 17 Jul 2017
Another rip off which won't work and end up heavily in debt. It's sole beneficiary will be the ANC who will use it as part of their future election campaigns. Rather spend the money upgrading the sorry state of government hospitals.
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Added by George, 17 Jul 2017
Looking at the state of current government hospitals and health services and I doubt wether their will be any support for a NHI scheme in SA.
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