Government pressing ahead with NHI despite warnings — IRR

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SA is pressing ahead with implementing the National Health Insurance system, effectively ignoring a report by the Davis Tax Committee that warns that the NHI is 'unlikely to be sustainable unless there is sustained economic growth’, writes the Institute of Race Relations.

“The government is busily pressing ahead with implementing its proposed National Health Insurance (NHI) system,” says the South African Institute of Race Relations (IRR) in the latest issue of its @Liberty policy bulletin. “However, it still does not know what the NHI will cost, how it will be financed, how the supply of health services can be ramped up to match increased demand, how the enormous administrative burden will be met, or how the corruption the new system will foster can be curbed.”

The government has also effectively ignored a report by the Davis Tax Committee – written in March 2017 and made public last week – which warns that the NHI is “unlikely to be sustainable unless there is sustained economic growth”.

A revised White Paper on the NHI was gazetted by the health minister, Dr Aaron Motsoaledi, on 30th June 2017. This revised document does nothing to tackle the many weaknesses in earlier NHI proposals.

“The White Paper largely ignores the problems of poor management and often poor quality in the public healthcare sector,” says Dr Anthea Jeffery, head of policy research and author of the IRR report. “Instead, its key concern is to put an end to the medical schemes that currently give close on 9m people (some 60% of them black) access to the benefits of the country’s world-class system of private health care.

“Government regulation has already pushed up the cost of medical schemes to the point where many people battle to afford them. The state has also refused to allow a low-cost option that would extend cover to at least 15m more South Africans.

“In further preparation for the NHI, the government is now seeking to end the tax credit that helps make medical schemes more affordable, to ‘consolidate’ smaller schemes into bigger ones, and to confine the schemes that remain to providing a single package of benefits. Its ultimate aim is to put an end to medical schemes altogether.”

According to Motsoaledi, all medical schemes will “eventually be gone”, once the NHI is in operation. “This will be a process that takes years and, in the transition, there will be consolidation,” he says. Once the NHI has been rolled out, the medical schemes that remain will “all be collapsed into a single state-run medical aid plan”, he stresses.

Public servants are becoming worried about this goal. Said Reuben Maleka, a spokesperson for the Public Servants’ Association, in September 2017: “Members would prefer medical aids. We don’t want to find ourselves in a situation where the NHI is the only option.”

A state monopoly over health care is nevertheless what the NHI White Paper seeks to bring about. This will be unaffordable (its likely starting costs, at R665bn in 2025, would amount to 13% of GDP) and grossly inefficient. Like Eskom, Transnet, Prasa, and other state monopolies, it may also be riddled with fraud and corruption.

“Far from bringing about increased access to health care,” Jeffery writes, “the NHI will deprive many South Africans of the access they currently enjoy. Introducing NHI is thus not a ‘reasonable’ measure for the state to take. It will also require a level of spending far in excess of the resources ‘available’ to the government. The NHI proposal is thus inconsistent with Section 27 of the Constitution.

The @Liberty report also describes several effective and affordable alternatives to the NHI which have been generated by the IRR and others. These proposals would widen individual choice and give people access to sound healthcare at prices they can afford.

The government has generally ignored these practical alternatives. Instead, Motsoaledi has repeatedly accused critics of the NHI of wanting to retain an unfair system and deprive South Africans of the benefits of universal health coverage (UHC).

“This accusation is false,” the IRR responds. “Critics are not opposed to universal health coverage, but rather to the inability of the NHI to achieve it.”

IRR report

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