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Putting money and power over healthcare

21 June 2023 Gareth Stokes

The contentious National Health Insurance (NHI) Bill cleared another hurdle on its way to parliamentary sign-off and presidential promulgation following its recent approval by the Parliamentary Portfolio Committee (PPC) on Health. It is now only a matter of time before the National Council of Provinces gives it the ‘all clear’ to allow all South Africans to benefit (sic) from what should be branded government’s “No Healthcare Initiative”. PS, excuse the cynicism, but on this writer’s assessment the NHI is little more than a money and power grab by government, spearheaded by the Minister of Health.

A Universal Health Coverage smokescreen

If you strip away the universal health coverage ‘smokescreen’ you are confronted with an NHI that nationalises South Africa’s private healthcare assets and bends them to the state’s will. The Bill creates a central NHI Fund that will ‘soak up’ most of the money being spent on medical scheme premiums plus billions in additional taxation. It also creates the framework for a massive cohort of government appointed NHI employees to administer every aspect of healthcare provisioning; from deciding what healthcare services will be provided, to how much these services will cost, to who may provide these services, and where these services may be provided. It is a framework that erodes the rights of both healthcare providers and healthcare recipients, universally. 

Is the NHI fait accompli? It seems the private healthcare sector has finally cottoned on that government wants to push ahead despite the many flaws that the NHI Bill enshrines. In a communication to its members the Health Funders Association (HFA) complained that the version of the Bill approved by the PPC had only “minor amendments [that] fell short of the extensive recommendations made by the private health sector” over months. There is also a growing list of critics of the Bill including business associations, opposition parties and the Parliamentary Legal Advisor, to name a few. Per the HFA, the Bill “perpetuates several tenets that will undermine the quality of healthcare and the objective of moving towards universal health coverage”. 

Five issues and counting

The HFA has five major issues with the Bill as currently presented, beginning with the limitations it imposes on the benefits that medical schemes will be permitted to provide. The fact that NHI will be the death knell for private medical schemes should be of major concern to South Africa’s medical schemes; medical schemes brokers; and the country’s medical scheme members. “According to the Bill, medical schemes will only be permitted to offer complementary cover for services not reimbursable by the NHI Fund,” they write. In plain English: Once the NHI is up and running, and assuming it provides coverage more-or-less in line with the current PMBs, there would be no need for medical schemes. 

The Parliamentary Legal Advisor has indicated that the limitation on the role of medical schemes violates the progressive realisation of healthcare access, particularly during the transition period. “The constitutional implications on the right to access to healthcare and freedom of association have also not been addressed,” writes the HFA. “We believe that limiting the role of medical schemes could have broader implications on our economy as it could have a negative impact on investor confidence…” In this context, you would think the country’s large open medical schemes administrators would be up in arms. They are, but not entirely. Dr Ryan Noach, CEO of Discovery Health, penned a somewhat terse letter in response to the latest developments. 

“We are surprised that both the National Assembly and the PPC approved the largely unchanged amended NHI Bill despite material concerns raised by almost all the opposition parties at the committee, and further to this, the significant constitutional concerns which were raised by the Parliamentary Legal Advisor,” he writes. “It is disappointing to note that the meaningful contributions from multiple stakeholders to the draft Bill were effectively disregarded, with the amended version of the Bill showing little variation from the original draft … it is particularly concerning that the inputs of the healthcare professionals, who are core and essential to the delivery of care, are not being given the appropriate weight and attention in the amendments to the Bill”. 

Three adjectives to judge the NHI by

The words ‘disappointing’, ‘concerning’ and ‘surprising’ feature prominently in most responses to the Bill’s approval. And they nicely punctuate the HFA’s second argument, being around the lack of input from National Treasury on the financing mechanism for the scheme. “While the Bill talks to the principles of cross-subsidisation, it is not clear as to whether affordability studies have been conducted; it is also unclear whether a longer-term financial strategy has been developed to sustain the proposed financing system,” they write. This lack of budgeting worries Dr Noach too. “The input from the National Treasury and the supporting ‘Money Bill’ have not been disclosed nor debated, and the funding of this Bill therefore remains entirely unclear,” he writes. 

This writer reckons: no costing, no NHI and it seems that Discovery Health holds a similar view. “It is absolutely critical to understand the affordability and economic strategy for supporting the Bill’s proposals, as well as the financial systems and controls required to ensure effective oversight of the monies in the fund,” writes Dr Noach. He adds that it is “a clear and present risk that the resources to support this proposed structure do not exist within the country’s fiscus”. Common sense will tell you it is impossible to cost a solution set when government remains schtum on what goods and services it will provide. And, of course, sans information on goods, services and cost of same, it is impossible to know how much National Treasury will have to ‘collect’ from you and me through each of the financial instruments available to it. 

Too many unresolved questions

Three Partners at Webber Wentzel co-authored a piece following the aforementioned NHI progress saying there were many unresolved questions and concerns about the practical implementation of the scheme. “Many stakeholders and experts have raised concerns that the scheme envisaged in the Bill is simply unaffordable, particularly as it would require an extensive administrative apparatus,” they wrote, before observing that it was difficult to interrogate the scheme because “it leaves many of the key issues to be determined later”. Unknowns include the extent of the benefits to be covered by the scheme; the rate of reimbursement; and many, many yet-to-be-issued regulations. They suggested that government deploy addition resources directly into the public healthcare sector rather than pouring them into an NHI implementation. 

The third concern raised by the HFA is that the NHI Bill will result in an exodus of skilled healthcare professionals. The association warns that “there could be a further loss of already constrained health skills”. Points four and five in their letter focus on the corruption risk in a single NHI Fund and the negative implications of the current proposal on the overall quality of healthcare countrywide. “While there are pockets of excellence in the public health sector, most of the health provision and facilities do not meet the standards set by the Office of Health Standards Compliance; this raises concerns about the overall quality of healthcare under NHI as well as the time that it will take for there to be sufficient facilities that meet the necessary accreditation levels to support [its] full implementation,” they write. 

Just call it like we see it, please!

The Discovery Health communication concludes: “We recognise the need for simultaneous reform of both the public and private healthcare sectors … [we are] ready to contribute towards a blended, multi-party funding model underpinned by a robust NHI”. It is this position that no doubt confuses many industry stakeholders; because the medical schemes administrator pledges support to the NHI scheme despite acknowledging countless shortcomings in the latest version of the Bill. 

We prefer Webber Wentzel’s no-nonsense closing remark: “While seeking to secure universal access to quality healthcare is generally supported and rightly so, the NHI Bill represents an over-hasty effort to fundamentally restructure the country’s public health service with potentially devastating consequences for healthcare providers and consumers alike”. Yes, sadly the implementation remains over hasty despite government mulling over the solution for many, many years. 

Writer’s thoughts:

I am in awe that an un-costed NHI scheme offering unspecified goods and services from yet-to-be-established healthcare providers has made it this far. Given the state of public services circa 2023, can government deliver a successful NHI implementation, even if they delay the final version for another decade? Please comment below, interact with us on Twitter at @fanews_online or email us your thoughts


Added by Gareth Stokes, 21 Jun 2023
Good overview, @Humphrey. Something not commented on in the article is the number of admin positions the NHI system creates... If memory serves, the first NHI paper was talking about around 70000 new jobs / positions - which will no doubt be an excellent enabler for cadre deployment.
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Added by Humphrey, 21 Jun 2023
Eskom a mess, Municipalities a mess, current government health facilities and services a mess, water and sanitation a mess, Denel a mess, police services a mess and the list goes on (almost without exception - perhaps SARS could be seen as an exception but not too long ago that too was "captured" and a mess). So what is going to make this any different? Well, nothing at all - all this is, is another means to steal money and fill posts with BEE appointments using no sound criteria (i.e. not based on merit and suitable candidates).
You and me will pay substantially in taxes and receive nothing (or nothing of value) in return - you have a serious health issue - you suffer and die. If one of the top government officials has a serious health issue - they will be flown overseas for treatment (at taxpayers expense).
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