Monday, 26 February, 2024
HomeNews UpdateNHI ‘will lead to emigration, corruption’

NHI ‘will lead to emigration, corruption’

Business and professional healthcare groups have added their voices to the chorus of opposition to the National Health Insurance (NHI) Bill, which was rubber-stamped last month, warning of tax hikes, emigration and corruption.

In its current form, the 75-page Bill will leave people worse off and deter globally mobile professionals from working in SA, Business Leadership SA (BLSA) CEO Busi Mavuso said this week, warning that it would seriously throttle the private healthcare sector.

The South African Medical Association (Sama) and the Health Funders Association (HFA), representing about 73% of open medical schemes and 50% of total medical scheme membership, also criticised the Bill, warning of tax hikes, emigration and corruption.

“By forcing the private sector out of the provision of all but a limited set of complementary services, private provision would effectively cease,” Mavuso said, “and for globally mobile businesspeople and their families, this would be another serious disincentive to work in SA.

“To be clear, business would benefit from an environment in which everyone had good quality healthcare. One in which no one had it would be catastrophic.”

The Bill has been slammed by the private sector, including SA’s biggest doctor organisations, private hospitals, and Discovery Health, reports BusinessLIVE.

“This direction of travel reflects nothing of the learnings from other critical interventions that government and business have achieved by working together,” added Mavuso, “the electricity crisis being an obvious example, where the introduction of large-scale private electricity generation has led to a dramatic increase in the number of projects now being built to add capacity to the grid.”

She cited the pandemic as a prime example of how the private sector could complement government efforts, speed up investments, and reduce costs, where the former collaborated with the state to source equipment and medicines, and to rapidly expand the provision of vaccines at sites countrywide.

Many other countries had implemented effective universal health coverage systems based on a multi-funder model, she said, urging the government to reconsider the role of medical schemes under NHI, for instance, Brazil and Thailand, both of which provided health services with a blend of private and public cover.

The Hospital Association of SA (Hasa) added its voice to the fray by urging the National Council of Provinces (NCOP) to heed stakeholders’concerns expressed during the public hearings held by the Portfolio Committee on Health, while the HFA said the Bill perpetuated several tenets, which will severely undermine the quality of healthcare, reports BusinessTech.

The HFA raised key issues with the Bill, including the limitation on medical schemes, the lack of clarity on financing, the potential flight of skills and a drop in quality healthcare.

One of the biggest issues with the NHI that remains to be answered is the role of medical schemes under the system.

According to the Bill, once the NHI Fund has been fully implemented, medical schemes will only be permitted to offer benefits for services not covered by the NHI.

The HFA said that adding the nearly 9m lives covered by medical schemes on to an already over-burdened and failing public health system would be detrimental to the quality of care.

“The limitation on the role of medical schemes would violate the realisation of healthcare access… the constitutional implications of the right to access healthcare and freedom of association have not been addressed,” it said.

Limiting the role of medical schemes would have broader implications on the South African economy as and could have a negative impact on investor confidence, added the group.

“Healthcare access is a key consideration for investment in South Africa and employers. Furthermore, it will detract from investment in the healthcare system, which would benefit the NHI Fund.”

Additionally, if the Bill were passed in its current form, that there could be further loss of already constrained healthcare skills.

A major question mark hangs over the financing of the scheme, with little detail having been provided on where money will come from and whether this is sustainable or not.

“While the Bill talks to the principles of cross-subsidisation, it is not clear 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,” it said.

“The Bill erroneously refers to the medical scheme tax credits as being paid to medical schemes rather than being a reduction in tax for individuals. This is a concerning misrepresentation as it suggests that the fiscal impact of the proposed tax increases is not being properly assessed.”

Before tax credits can be allocated to the NHI, these taxes must first be collected, and this amounts to an unacceptably high tax increase on a narrow base of taxpayers.

A single NHI Fund

In rejecting the single-fund model, the HFA said it would be vulnerable to corruption and theft.

“As per the current Bill, this Fund will not be autonomous as the Health Minister will have far-reaching powers in terms of appointments and regulations.”

While there are pockets of excellence, most of the health provisions and facilities in the public health sector do not meet the standards set by the Office of Health Standards Compliance (OHSC), raising concerns about the overall quality of healthcare under NHI as well as the time that it will take for there to be sufficient facilities meeting the necessary accreditation levels to support full implementation, it pointed out.


BusinessTech article – Medical schemes warn of tax hikes, emigration and corruption as government pushes through NHI (Open access)


BusinessLIVE article – NHI will make things worse for SA, warns BLSA (Restricted access)


See more from MedicalBrief archives:


Litigation threats as NHI Bill passed by parliamentary committee


Opposition parties reject NHI Bill in current form


Fifty reasons why the NHI will not work






MedicalBrief — our free weekly e-newsletter

We'd appreciate as much information as possible, however only an email address is required.