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Back to square one in dispute over certificates of need for doctors

Health Minister Joe Phaahla has been granted a reprieve in the standoff over a section in the National Health Act which calls for doctors to obtain a 'certificate of need' before they can set up or expand their practices.

The Gauteng High Court (Pretoria) has rescinded a judgment that had scuppered  Phaaha’s plans for determining where doctors would work under the (NHI) scheme, saying he was entitled to have his day in court.

The case centres on the “certificate of need” provisions in the National Health Act – an integral part of the government’s plans for NHI, reports Business Day.

Under the NHI, the Health Department wants doctors and health facilities to obtain a certificate of need before they can set up or expand a practice.

In June last year, Acting Judge Thembi Bokako upheld an application by trade union Solidarity and six other parties challenging the constitutionality of the Act’s certificate of need provisions, set out in sections 36-40.

Surprisingly, the matter was not opposed by the Minister and the judge only heard arguments from Solidarity and its co-applicants.

Bokako ruled in a default judgment that sections 36-40 of the Act were unconstitutional and invalid and should be set aside.

At the time, the Health Department said Phaahla had not been notified of the proceedings, and had applied to both the Constitutional Court and the High Court to have the ruling rescinded.

The Constitutional Court said in December that the lower court should decide on the matter.

In a ruling handed down on 14 June, Judge Brenda Neukircher agreed with the department’s argument that the Minister had not been properly informed when Solidarity instituted legal proceedings.

The applicants had failed to comply with court rules that set out how the sheriff of the court may serve papers initiating proceedings on a respondent, she said.

When the sheriff attempted to serve notice of motion on the Minister and was told by the receptionist at his office that no one in the legal department was available, the sheriff left without serving the papers on anyone.

Neukircher said the emails sent by the applicants’ attorneys to the respondents did not constitute service for initiating proceedings under rule 4(1)(a) of the uniform rules of court, and gave the Health Department 30 days to file its responding affidavit to the issues raised by Solidarity and its co-applicants, which include several individuals, the Alliance of South African Independent Practitioners Associations, and the SA Private Practitioners Forum (SAPPF).

The Health Department’s director for legal services, Kgorohlo Moabelo, said if the High Court again upheld Solidarity’s argument that the certificate of need provisions were unconstitutional, the judgment would require confirmation by the Constitutional Court.

Deputy director-general for NHI Nicholas Crisp said the certificate of need was common practice worldwide.

“In SA, it already applies to pharmacies. The current mandates for issuing licences are spurious and were contained in Section 44 of the Health Act of 1977 and Regulation 158. These clauses of the National Health Act replace and expand on the provision of that clause. This is nothing new.”

SAPPF CEO Simon Strachan said it was disappointing that last year’s ruling had been rescinded on procedural grounds.

The certificate of need provisions in the National Health Act applied to facilities ranging from JSE-listed hospital groups to single GP practices, and would affect both businesses and individuals, he said.

A certificate of need would be valid for only five years, which meant a healthcare professional would live with constant uncertainty about whether or not they could pursue their career in a place of their choice, he added.

Solidarity spokesperson Perriu Marx said the organisation’s position remained unchanged, and it had no further argument to make to the court.

‘Rush job’ riddled with pitfalls

Meanwhile, legal experts at law firm Webber Wentzel have described the NHI Bill, passed last week, as an “over-hasty” attempt to completely transform public healthcare – leaving confusion and potential destruction in its wake.

They said two of the most significant pitfalls are in how the scheme will be funded, and the resulting destruction of private healthcare; that given the dire state of public healthcare in the country, it was surprising the government was persisting with plans to spend vast resources on implementing the NHI.

“Those resources would greatly improve the delivery of quality health care – and universal access to that care – if they were deployed directly into the public health sector,” said the firm.

The funding problem

Despite being steamrollered through the legislative processes, it is still not clear how the NHI will be funded.

It makes provision for funding through taxes, but this is non-specific and contradicts other parts of the proposed laws.

“Clause 49 states that the fund’s chief source of income will be money appropriated annually by Parliament. This must be appropriated from collections of, among others, general tax revenue, a payroll tax and a surcharge on personal income tax,” Webber Wentzel told BusinessTech.

“However, this is difficult to reconcile with clause 2, which states that the Fund will be funded through ‘mandatory prepayment’ – a term defined as ‘compulsory payment for health services before they are needed in accordance with income levels’.”

This is also in contrast to clause 55(1)(t), which empowers the Minister to make regulations on “all fees payable … to the Fund”, it said – again, something that is steeped in uncertainty.

The government has been exceptionally cagey on where the money for the NHI will come from, but has made it clear taxpayers will ultimately foot the bill.

Wake of destruction

Then there’s the impact on private healthcare, medical aid schemes and other connected industries.

While the laws make room for medical aids in the form of coverage for procedures and care not catered to by the NHI – the end goal is apparent: the fund is intended ultimately to cover a comprehensive range of benefits.

The Bill also envisages that the businesses of medical schemes will shrink dramatically, which may threaten their continued existence.

Further, it does not clarify how reimbursement rates will be determined – with rates vaguely set to be paid annually – with no information about how service providers can best procure products when the fund determines which suppliers to use.

“…the 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.”

Yesterday, the South African Medical Association (Sama) called for clear and transparent governance structures within the NHI framework, promoting inclusivity and meaningful representation from healthcare professionals and other stakeholders.

While the association reaffirmed its commitment to supporting Universal Health Coverage, it said it couldn't endorse the NHI in its current form as the chosen vehicle by the government, according to a News24 report.

Sama said it wanted to ensure equitable access to high-quality healthcare services.

Spokesperson Dr Mvuyisi Mzukwa said they wanted to caution the Health Department against "prematurely implementing an NHI model that could disrupt the country's health system without mitigation".

However, the association said that with proper governance, the high likelihood of risk may decrease, noting that municipal districts would be in control of the execution of the NHI.

Mzukwa said the association supported the implementation of a universal health coverage programme, as it presented an opportunity to ensure healthcare services were delivered fairly, inclusively, and in a non-discriminatory manner.

"SAMA acknowledges and has, on various platforms, highlighted the challenges presented in the current NHI Bill. These challenges include governance, financing, health system capacity, and the potential impact on private healthcare providers" he said.

"The Bill's complexity and potential operational difficulties require careful consideration and robust mitigation strategies to ensure successful implementation."

He added that the association emphasised the necessity of strengthening the health system's capacity to meet the demands of a UHC programme. Mzukwa said:

Sama warned that "without strengthening management at the public hospital level, there is a risk that the NHI system will inherit the existing issues of poor leadership".

The association urged policymakers and stakeholders to address the identified challenges through clear governance structures, sustainable financing mechanisms, strengthening of the health system's capacity, collaboration with private healthcare providers, continuous evaluation, and meaningful stakeholder engagement.
National Health Act 

When journalist Chris Barron quizzed Crisp on the Bill in his weekly Q&A in the Sunday Times, it was defended on the one hand, but on the other, Crisp also admitted to the shocking state of public hospitals.

However, he denied a costing of R700bn for implementation, saying it would be less than 8.5% of GDP: “We spent R277bn the year before last in the private sector. Add that to the R265bn we spend in the public sector, and the money’s already there.”

On the predicted steep climb in taxes, Crisp said “a hell of a lot of that money is already paid for in tax, it’s just going through different channels. If we don’t waste and duplicate …”

To the question of whether the NHI could be built “on top of a broken public health system”, he said: “Absolutely. When other countries have built their NHIs, they’ve largely built them in devastating circumstances.”

But Barron cited Ghana as an example, which started its NHI in 2003. Crisp, who was part of that team, dodged the fact that Ghana’s system was characterised by poor quality services, ineffective governance, corruption and the failure of strategic purchasing to curb costs, saying it was a “different model from ours”.

On Barron’s comment that South Africa’s public hospitals were disasters – from infrastructure to management to governance – Crisp said: “I’d like you to list all 400 and tell me which ones are a disaster.” He conceded, however, that the government’s own pilot projects, years ago, had showed how dysfunctional public hospitals were, but defended the fact that they hadn’t been fixed.

“I don’t see how it’s possible to fix things spending R5 200 per person per year… there are parts of the country where management is abysmal, where political interference is seriously problematic, where there is devastating abuse of the system and high-profile theft and fraud, but …”

On the chances of preventing corruption from destroying NHI, he responded: “That’s like me asking how you’re going to prevent patients from stealing from their medical aids”, and on how the government would protect a R500bn-R700bn central NHI fund from the organised, often politically connected, criminal networks, his answer was: “I doubt it will be more than R400bn in the fund.”

Preventing political influence in the fund would “be same as in any board: you make it as autonomous as possible”.

 

Business Tech article – NHI ‘rush job’ riddled with pitfalls: legal experts (Open access)

 

Business Day PressReader article – Health minister to get his day in court (Open access)

News24 SAMA cautions health dept against prematurely implementing NHI programme

Sunday Times PressReader article – Health DG answers some tough NHI questions (Open access)

 

See more from MedicalBrief archives:

 

Litigation threats as NHI Bill passed by parliamentary committee

 

Parliament passes NHI Bill but long road to implementation

 

NHI ‘will lead to emigration, corruption’

 

 

 

 

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