The National Assembly’s Health Committee has denied the public consultation process on the National Health Insurance (NHI) Bill has been suspended pending the outcome of advice from the State Attorney, and says the process is firmly on track.
“Reports on the suspension of the NHI process are fake news”, the committee’s chair, Sibongiseni Dhlomo, said, noting a letter written by Werksmans Attorneys director Neil Kirby was being circulated, indicating the process had been suspended pending advice from the state law adviser on the constitutionality of the Bill. The DA asked Parliament to seek legal opinion on the constitutionality of the Bill, because it proposes far-reaching changes to the role of provincial health departments. “We want to distance ourselves from those utterances and want to reassure the public that the NHI Bill has been tabled in the National Assembly. The Speaker has presented and referred it to the committee,” Dhlomo said.
Kirby explained: “The view provided was in the context of legal advice on the basis that the process should be suspended pending clarity on the constitutionality of the Bill.” Dhlomo reportedly told Business Day that he had obtained advice from the state law adviser, which he would share with the committee at a meeting tomorrow when Health Minister Zweli Mhkize is expected to make a presentation to the committee, after which the public consultation process will begin.
However, concerns about NHI spending persist. Only R200m has been spent on the programme so far this year, some R215.1m below projected NHI spending by this time, according to National Treasury. Officials from Treasury’s public finance department briefed the Standing Committee on Appropriations on its first quarter expenditure report for the 2019/20 financial year, notes Fin24. The Department of Health has a total appropriation of R51bn. MPs heard that spending on the NHI was currently at R200m, or 9.5% of the R2.1bn budgeted for the full 2019/20 financial year – R215.1m below projected NHI spending for this time of the year. Treasury said it was particularly concerned that funds meant to ‘strengthen health systems for the NHI roll-out’ are not being used as planned. ‘The situation is not improving in the current year compared to the first quarter of 2018/19,’ a Treasury report shared with MPs read.
Nevertheless, Mkhize remains upbeat, punting NHI plans on a global stage at Durban’s International Convention Centre. TimesLIVE report notes that he told delegates from 24 countries that it would improve life expectancy and reduce the burdens of disease and death. He added there was a need to dispel misconceptions and urged South Africans and the health sector not be consumed by fear of the unknown.
President Cyril Ramaphosa says government will keep a “hawk’s eye” on finances for the National Health Insurance fund to safeguard it from corruption. According to a Fin24 report, Ramaphosa’s comment was in response to a question from ANC MP Sibongiseni Dhlomo during question time in the National Assembly about what stringent measures will be in place to safeguard the NHI from corruption during its implementation, given the track record of governance challenges at state owned enterprises.
The report says at an earlier Cabinet briefing, Minister in the Presidency Jackson Mthembu urged the public to engage with the Bill. “Parliament will afford the public an opportunity to engage with the bill as the health portfolio committee takes it through consultation. Once enacted, the bill will give universal access to healthcare for all South Africans regardless of their socioeconomic background,” he said.
Mthembu added that government will ensure NHI is effected in a responsible manner.
NHI will be rolled out in a manner that is affordable and will not pose the kinds of risks to the economy that state-owned electricity generator Eskom has done. Business Live reports that this is according to Mkhize who told delegates to the annual Hospital Association of Southern Africa conference: “The entity will receive funds from the fiscus and apply the funds to the defined mandate.”
Mkhize said there is sufficient money in the budget for implementing NHI over the next five years, but said it faced a potential funding shortfall of R30bn by 2026.
But Moneyweb reports that hundreds of medical professionals who packed the lecture hall to hear Mkhize were left with more questions than answers. The report said Mkhize waxed lyrical with several quotes from the father of the nation, Nelson Mandela, but didn’t bring any new information regarding implementation of the NHI to light.
Mkhize said challenges facing the public health sector include long queues, staff shortages, dilapidated infrastructure, inefficient management, corruption and drug shortages – but did not elaborate on how these issues would be addressed.
The Treasury is preparing a financing paper on the NHI, which is expected to give more detail on how much the scheme will cost and how it will be funded. Business Live reports that since the tabling of the Bill two weeks ago, there has been some scepticism on whether it is affordable, given the current constraints on the fiscus.
A memorandum attached to the Bill suggests an extra R30bn would be required on top of the current R220bn health budget to implement “the full set” of NHI interventions including scrapping user fees at hospitals, setting up the fund and expanding services by 2025. The NHI also has immense implications for the provincial health departments, which receive the lion’s share of the R220bn health budget.
The report says in response to questions, Treasury said: “The paper is ongoing work. Although only the minister of finance has the statutory powers to publish a money bill and propose what taxes/ sources of revenue will be utilised to fund NHI, the minister will continue to engage with the minister of health on the NHI. The finance section of the bill published contains a brief summary of some of the actuarial costing Treasury assisted the department with.”
“While broadly supporting the objective of universal healthcare”, at a recent meeting of the Budget Council – a statutory body composed of the national government and the nine provincial finance MECs, members noted the potentially “substantial impact” of NHI on intergovernmental fiscal relations, the need for provincial participation in all “processes” related to the NHI Bill, and the importance of introducing NHI “in a phased manner”, writes Pam Saxby for Legalbrief Policy Watch.
According to a National Treasury media statement on the meeting, Finance Minister Tito Mboweni intends discussing the Bill’s provincial ‘implications’ with Mkhize.
The Budget Council has flagged the complexity of implementing the NHI scheme because of the implications for provincial health departments, reports Business Live.
Provinces have concurrent powers with national government over health and receive R150bn from the Treasury to run provincial health services. The NHI proposes an entirely new health-system architecture, which involves a centralised fund and hundreds of contracting units overseen by district management offices, which report to the national government. The change implies huge restructuring and reform, by far the most ambitious yet attempted by the government.
The report quotes the the council as saying: “While broadly supporting the objective of universal health care, the Budget Council considered that due to the substantial effect on intergovernmental fiscal relations, any implementation should be done in a phased manner and that provinces should remain engaged with the processes about the Bill.”
Ramaphosa said some people opposed to the NHI are opposed to transformation against the backdrop of massive inequality in the health sector. According to a News24 report, he said implementing the NHI while improving the health system will have several
benefits. “The NHI will increase the resources available to hire more health workers, thus reducing waiting times at clinics and hospitals. Contracting health professionals from the private sector into NHI will increase access to the services of doctors, specialists, dentists, physiotherapists, psychologists and others.”
He said through a more efficient allocation of health resources, the NHI will improve access to medicines and equipment, reduce drug stock-outs and improve facilities’ maintenance. “The NHI Fund will separate the purchase of health services from the delivery of services, thereby increasing value for money. It will help to ensure that funds, staff, medicine and equipment are more fairly distributed. It will further enhance the quality of services delivered because all those who receive contracts must be able to provide services of a specified quality.”
He said it will help improve efficiency, transparency and accountability. “As we have done before with all major policy interventions since 1994, we will ensure effective consultation and engagement across society at all stages of this process,” he said.
At the top of the list of concerns about how the NHI is to be implemented is the future of medical aid schemes, potential job losses in the private sector and just how much NHI will cost South Africans, says a Sunday Times report. It quotes the Health Department’s deputy director-general for NHI, Anban Pillay, as saying, however, that the situation was not as dire as it seemed. He responded to some of the issues.
“They (medical schemes) will always be there, even when there is full implementation of the NHI. Only at that point of full implementation (will) they take a complementary role. From now on until full implementation, schemes will continue as they are currently,” Pillay said.
The report said that Pillay also disputed the DA’s assertion that the Bill will be used to nationalise health care, establish a new state-owned enterprise and be an additional tax burden. He said the National Health Act currently gives provinces autonomy over certain functions such as providing specialised hospital services and planning the development of public and private hospitals, other health establishments and health agencies.
The report says this has left the health minister with little power over what happens at provincial health departments. Pillay said this will soon change as the National Health Act is being revised to give the minister more power.
The DA is concerned that the Health Department published the Bill without proper consultation with National Treasury about the costs involved, according to Siviwe Gwarube, DA Shadow Minister of Health who said that this makes it clear that the Ministers of Health and Finance are at variance with one another.
Gwarube says in a report carried on the Politicsweb site: “Two weeks ago, the Minister of Health, Dr Zweli Mkhize and President Cyril Ramaphosa announced that NHI will be implemented regardless of the costs. However, Treasury is busy scrambling trying to figure out how this ill-conceived policy proposal will be funded.
“What is now needed is clarity from the Finance Minister, Tito Mboweni, about the work that has been done by Treasury and the Health Department, on the funding model for NHI. It is clear that South Africa cannot afford the implementation of NHI from a fiscal perspective and that it will do little to provide Universal Health Care for our people. The DA has therefore written to Minister Mboweni to urgently request that he clarifies what Treasury’s position is in terms of the financing of this Bill.”
Speaking at a Mail & Guardian seminar on the NHI Bill, Sipho Kabane, CEO and registrar of the Council for Medical Schemes, said while there is uncertainty about the role that private medical providers will play when the Bill gets implemented, he is certain that its schemes will continue to exist and function. “For us there’s no major change in terms of mandate – all the schemes will still exist even in the National Health Insurance dispensation,” he is quoted in the report as saying.
Stan Moloabi, chief officer of the Government Employees Medical Schemes said even though there is “uncertainty” the South African healthcare system is not conducive to all of the 58m population and that needs to be changed.
Russell Rensburg, the director of the Rural Health Advocacy Project said he welcomes the Bill, but said it is not without flaws. “I think governance is a significant challenge – and that is an area we can engage heavily and see how we can improve particularly around the minister’s involvement as a regulator, overseer and director.” And Mpiyakhe Dhlamini, a researcher and data scientist at the Free Market Foundation, lamented the fact that individuals will no longer be spoilt for choice.
What should concern all serious people in government is that a wide range of reasonable commentators, people whose values are broadly in line with the principles underpinning NHI, have expressed serious concerns about the workability of the current NHI plans, writes Marcus Low, the editor of Spotlight in a Daily Maverick report. He writes that many in government might not want to admit it, but there is a real and important difference between those who are ideologically opposed to NHI and those who wish some form of NHI to succeed, but have valid concerns with the current plans. The road to NHI would be much smoother if those in government and the ruling party were less defensive about concerns of the latter group.
Low says if the government wishes to build a stronger public consensus on NHI, it must start communicating in a more inclusive and less defensive manner about NHI and the very real challenges of implementing it in our current context. It should show in its actions that implementing NHI is really about making people’s lives better and not just about politics. It should show that people’s concerns are taken seriously.
For example, Low writes, it is natural that people who can currently afford medical scheme cover are concerned about their own and their family’s futures under NHI. Yet, in the first few days after the bill was introduced into Parliament, there was hardly any acknowledgement of these concerns.
Low makes the point that if the minister is sure middle-class people will have the same quality of care under NHI as they have now, he should say so and explain why he is sure of it. If he is not sure, he should explain why a decrease in quality for some is justifiable. By not spelling things out, and not taking reasonable concerns seriously, the government is seeding valuable bandwidth to naysayers who stand ready to fill the gaps with people’s worst fears.
Low writes: “We probably have enough qualified and committed people in South Africa to implement a reasonably effective NHI that is also more decentralised than what is envisaged in the current bill. The problem is that for the past two decades many of these people have been driven out of the public healthcare system and the public service.”
Commenting on the Bill, Dave Steward, chair of the FW de Klerk Foundation writes: “There is nothing wrong with first world national health schemes if you are a first world country. Unfortunately, South Africa is not a first world country and simply does not have the resources or manpower to achieve the ambitious objectives of the ANC’s proposed National Health Insurance (NHI) scheme.
“As it stands, the NHI has the potential to cause more havoc than even the dire prospect of expropriation without compensation. If it is implemented as envisaged it will have a direct impact on the lived experience of South Africa’s multi-racial middle class, millions of South Africans who already bear a heavy tax burden. If parents with sick children have to wait for weeks for medical appointments – and for yet more weeks to see specialists – their frustration and anger will dominate their lives. And to make things worse, the NHI will not make any difference to the presently crippled and defunct public health system.
“The continuing availability of decent health care could be a decisive factor for many of those, of all races, who are considering their future in South Africa, particularly the young, the well-qualified and the entrepreneurial with the means to move.
If middle-class emigration – now estimated at 3 000 per month – accelerates, there will be serious consequences for the country’s tax and skills bases. Many emigrants will come from the 2% of tax-payers who pay 70% of personal taxes. Their departure will further deplete our skills base – without which the Fourth Industrial Revolution will simply pass South Africa by
“If private hospitals can no longer take the financial, procurement and pricing decisions that are essential for their viability, they will close. If doctors and specialists are forced to practise, set their fees and wait for remuneration at the behest of a distant bureaucracy, many will join the thousands of medical personnel who have already left South Africa.
“Yet these would in all likelihood be the unintended consequences of the NHI.”
South Africa cannot afford to implement the NHI, Nedbank economist Busisiwe Radebe told delegates at the 2019 Tax Indaba. Fin24 reports that Radebe said the country’s flagging economy was not in a position to afford the NHI, which will be rolled out in two phases over a nine-year period.
“We can’t afford the NHI; we have no fiscal space for it,” said Radebe during a panel discussion on the economy. She stressed that in her view the state must focus on fixing debt-laden power utility Eskom, and providing a conducive space for job creation, the biggest obstruction to economic growth in a country with a small tax base.
Business Live report
The Times report
Business Live report
Business Live report
Legalbrief Polity Watch report
Business Live report
Sunday Times report
Report on the Politcsweb site
Mail & Guardian report
Daily Maverick report
Report on the Politicsweb site