The inevitable restructuring process which will be kickstarted when the NHI comes into effect will see provinces losing their health functions and closing down Health Departments, affecting some 130 000 administrative staff employed in nine provinces.
Writing in the Daily Maverick, Claire Botha says the last time SA had a massive restructuring was during the establishment of the post-apartheid administration, and although the NHI does not rise to these levels, the impact on warm bodies will not be dissimilar.
The 1994 restructuring was characterised by much upheaval, with people being redeployed, retrenched or retired. This caused quite a bit of trauma, while negatively affecting the state’s capacity.
While it seems that the labour unions are fully behind the NHI, this will not be sustained once they realise the implications for their members.
Massive reorganisation, such as is intended with the NHI, is almost always characterised by turbulent labour relations. Stripping provinces of their health function is nothing less than a monumental restructuring with the inevitable casualties.
What will happen to all of the tens of thousands of administrative staff at provincial level? Will they be absorbed by the Health Department? Some may well be: some might even find employment in the NHI Fund itself. However, many will be left in limbo, as has happened before.
The HR ramifications of the NHI will not be unlike those seen during the restructuring of education in the mid-1990s. Take the Eastern Cape as an example. The first thing that happened was a restructuring of the organogram, meaning people had to reapply for posts.
Since not everybody was appointed during this process, many became supernumerary to the staff establishment. Many of these additional staff were given the option to apply for posts in other geographical areas. Others, specifically those in certain age groups, were offered early retirement.
Besides the cost implications of these options, it caused untold personal trauma, often resulting in labour unrest.
The NHI Bill is currently under consideration by the National Council of Provinces (NCOP) where provinces will be given the opportunity to assess its implications at provincial level. However, it is doubtful whether it will be substantively assessed for its implications at provincial level, specifically as it relates to labour relations.
Deliberations are likely to echo the national discourse, without adding new insights or recommendations. In this eventuality, the NCOP would have failed in its constitutional mandate, which is to ensure provincial interests are protected.
Some would argue that as a national initiative, the NHI would hold sway over any narrow provincial interests. Even the provinces themselves may be in agreement with this point of view, until they develop a full appreciation of what’s in store after they’ve been stripped of their health function.
As money follows function, losing the health function means losing a significant portion of the provincial equitable share, meaning provinces will have to shut their Health Departments, signalling the start of a massive restructuring process.
There are around 130 000 administrative staff employed countrywide. Under ideal circumstances they would be absorbed either into the Health Department or the NHI Fund. This is, however, unlikely for various reasons.
First, a mismatch between the skills required to run an insurance scheme and that of people working in the public service will result in very few public servants being absorbed into the NHI.
Also, high levels of automated business processes envisaged for the fund will reduce the need for staff. Many appointed at managerial level in the public service may not find comparable positions in the NHI Fund.
The second reason many will find themselves redundant is that the Health Department will simply not have the required financial resources to accommodate everybody currently employed in administrative positions in the provinces.
This is despite additional resources becoming available through the equitable shares being reallocated from the provincial to the national sphere. This money is intended for use by the NHI Fund and will therefore not be available for paying salaries.
Labour concerns
When the NHI Bill went through the National Economic Development and Labour Council (Nedlac) process in 2021, the labour component raised concerns about possible redundancies resulting from NHI implementation, asking that “safeguards” be initiated to prevent these at provincial level.
But still there is no reference to these concerns. In other words, labour has failed to protect the interests of members and is thus in for a rude awakening once the penny drops.
The South African labour relations terrain is notoriously complex and often can make or break a project.
An example of this is the recent restructuring of the Orsmond TB Hospital in Kariega, from a tuberculosis to a mental health facility.
As expected, the restructuring rendered many redundant, mainly due to person-to-post matching issues.
While the Eastern Cape Health Department tried to remedy this through redeployment strategies, the issue remains unresolved, with 45 staff receiving salaries amounting to R67m while sitting at home for two years. This is a classic case of proper consultation not being conducted before implementing a project.
It’s not clear whether the NHI architects have been engaging labour in any meaningful way up to now. It is certainly not mentioned in the public discourse nor addressed in the recently published “fact sheet”.
What is clear and based on the historical records, is that many people will be negatively affected by the scheme, resulting in inevitable protracted labour disputes. This is bound to slow down NHI implementation as well as significantly increase the costs of its roll-out.
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