The jury's out on national health insurance

01 October 2009 Gareth Stokes, FAnews

Those warning against a hasty national health insurance implementation, and raising valid concerns about government's 'access to healthcare for all' policy run the risk of being branded as racist or counter-revolutionary.

"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else!" Dr Adrian Rogers, 1931

The sentiment expressed by Adrian Rogers is dismissed as a standard 'capitalist' response to government-imposed social interventions. In South Africa such comments would also be labelled racist or counter-revolutionary. And as the ruling party forges ahead with its 'access to healthcare for all' policy, those warning against a hasty national health insurance (NHI) implementation have already been so branded!

During ex-health minister Barbara Hogan's tenure government favoured a staggered NHI implementation. A lengthy period of consultation would culminate with the first steps towards a health system in 2012. At the Board of Healthcare Funders September 2009 conference the deputy minister of health told attendees he expected legislation for government's national health insurance (NHI) implementation would be in place by April 2010. It's a bold wish given government's first discussion paper on the system has yet to surface!

What you think about the plan

In the absence of an official working paper, commentators have based early assessments of the NHI on a recent ANC-appointed task team publication. There are plenty of unanswered questions. What role will private hospitals play? How will medical schemes be accommodated in the NHI? And how will the overburdened healthcare system (public and private) accommodate millions of new beneficiaries? We asked FAnews Online readers whether they felt an NHI system was appropriate for South Africa.

Some of our readers support the plan. SF Nzama wondered why South Africans always look for failure in government initiatives: "Why do we have to jump to conclusions that NHI will not work – will be inefficient – and that medical schemes will become obsolete?" We expect much of the negativity is due to the way in which government is tackling the process. Instead of playing open cards and inviting comment from affected stakeholders government deflects criticism on the grounds the current document doesn't reflect its views. We hope this is the case because insiders allege the discourse while drafting the document was flawed.

Impossible levels of service

Medical aid members appear to be in two camps. Those in favour of NHI are generally disappointed due to the perceived shortcomings of their existing medical aid schemes. They view medical aids as greedy and inefficient and would abandon the 'devil they know' in favour of an untested NHI.

Readers opposed to NHI voice a number of concerns. Margaret suggested asking the question: Access to all; but access to what? "Because of the cost involved I think government will just focus on the access to all and to hell with quality." She called NHI a "short-term political fix with terrible long term consequences!" Eugene Slabbert wanted to know how five million taxpayers could foot medical bills for 48 million people. His concerns were echoed by Hein Eksteen who observed that the medical aid contributions of the seven million South Africans who could afford cover would result in "a very basic" healthcare service for all. "If our tax money is not sufficient to run the existing public health infrastructure, then what will change when NHI is implemented?" asked Rikus.

Another concern is the erosion of the constitutional right of individual choice. Dee wrote: "Surely every taxpaying South African citizen has a constitutional right to elect to pay for medical aid and to receive the benefits thereof. The ordinary hard-working individuals that pay taxes religiously and contribute to the economy of the country are expected to give, and give, and sacrifice and give! What does government think will happen when an already inept system is bombarded with millions more?"

Government ignores valid concerns

"We have learned over the years that government just follows its own head whenever it wants to do something new. Yes, they follow 'due process' by allowing input and comment from the industry; but in the end they hardly ever take note of what the industry experts had to contribute!" This anonymous comment reminded us of some of the administration's previous blunders. Today's medical schemes environment was carved out under the Medical Schemes Act of 1998 and the high premiums are a direct result of the Council for Medical Scheme's (CMS) legislated objectives of open enrolment, community rating and guaranteed benefits. JR noted that "government set out to destroy medical aids years ago by forcing schemes to provide cover for people with existing medical problems."

Risk Equalisation Funds and Prescribed Minimum Benefits were introduced in the private medical schemes environment as a precursor to national health. And considering the capacity of the public sector these innovations should indicate to government what it will cost to provide them! "Given the shocking state of the government hospitals, I feel the implementation of NHI will drag down the standards of private hospitals, demoralise doctors and certainly make a lot more people think of emigrating!" said Margaret.

Rich countries coming up short

National health systems have been rolled out in many developed countries worldwide. The striking difference between these countries and South Africa is the level of employment. George Thom noted that "a scheme such as NHI can only succeed if we have a thriving workforce and NOT an unacceptably high unemployment figure as we have in SA!" Even countries with near full employment are struggling to fund and administer their health systems. "The United Kingdom's NHI scheme still has huge failings – people have to wait for years for procedures that South Africans can have done immediately by the most professional healthcare providers, thanks to our existing private healthcare system!" said Mike T.

Many FAnews Online readers generate commission from private medical schemes. "Is government going to compensate health brokers for loss of income if everyone joins the NHI?" asked John. After years of CMS attention the commission earned by medical schemes brokers hardly shoot the lights out; but under NHI these brokers may find themselves knocked out of the loop.

Doctors and specialists are concerned too. "Is the NHI going to create current RPL rates or are they going to drop the cost to something ridiculous?" asked a concerned physician. There's an ominous warning too: "If the government wants to lose all their providers they should implement the NHI, because we will be on the first plane out of here!"

The biggest question of all is whether government will be capable of administering a 'single-payer' NHI. "How on earth can government believe it is capable of running a NHI scheme, when they can't maintain the existing public health facilities?" asked Mike T. Cynical Simon agreed: "The provincial structures are dysfunctional, crime is beyond control, policing is a joke, the department of justice has become the epitome of nepotism, home affairs a net of inequity and government hospitals are places where people go to fulfil their death wish!"

"It will take an eternity before the powers that be will realise that this is an impossible dream!" said Slabbert. The truth is this realisation is unlikely to occur. Government will implement NHI and then claim victory for extending healthcare to all while wiping concerns about service levels under the carpet. In a nutshell, "let's hope sanity prevails and we do not end up with an expensive, overburdened, corrupt and incompetent national health scheme."

Quick Polls


How confident are you that insurers treat policyholders fairly, according to the Treating Customers Fairly (TCF) principles?


Very confident, insurers prioritise fair treatment
Somewhat confident, but improvements are needed
Not confident, there are significant issues with fair treatment
fanews magazine
FAnews June 2024 Get the latest issue of FAnews

This month's headlines

Understanding prescription in claims for professional negligence
Climate change… the single biggest risk facing insurers
Insuring the unpredictable: 2024 global election risks
Financial advice crucial as clients’ Life policy premiums rise sharply
Guiding clients through the Two-Pot Retirement System
There is diversification, and true diversification – choose wisely
Decoding the shift in investment patterns
Subscribe now