Wednesday, 17 April, 2024
HomeNews UpdateNo new funding for NHI in yesterday's Budget

No new funding for NHI in yesterday's Budget

Finance Minister Enoch Godongwana has made no new provisions for the National Health Insurance in yesterday's Budget speech, but he made it clear government was still committed to the policy, notes MedicalBrief.

Major public sector reforms will be required to shift funds currently allocated to provincial Health Departments to NHI, said Treasury’s chief director for health and social development, Mark Blecher, according to a BusinessLIVE report. Programmes designed to lay the groundwork for NHI are largely funded through the NHI indirect grant which has been allocated R6.9bn over the next three years.

“A lot of preparatory work still needs to be done. We won’t see tax proposals in the short term for NHI,” said Blecher referring to potential mechanisms for raising additional money for the NHI Fund, which is expected to purchase services for patients from accredited public and private providers. The Health Department has previously said about R200bn will need to be raised via measures such as a surcharge on personal income tax and a payroll tax to supplement public sector funding sources.

But concern about how the controversial NHI scheme was again raised by SA Medical Association (SAMA) chairperson Dr Mvuyisi Mzukwa, who said South Africa’s health system was not ready for NHI.

Speaking at SAMA’s annual three-day conference last week, themed around strengthening health systems and which also hosted robust discussions about the NHI Bill, he said the country was “on the brink of a momentous change in healthcare in terms of procurement, funding and reimbursement, that would have an impact not only on health professionals but on the whole country”.

“On various platforms, SAMA has made its position known that… We do not think this Bill will achieve what it purports to do,” he said.

Opposition to NHI

While SAMA fully supports the principle of universal health coverage, reports Daily Maverick, it does not believe this will be achieved through a single-purchaser and single-payer system as stated in the NHI Bill, according to Mzukwa.

“Any form of health reform must be based on a health system that is built on adequate human resources for health, access to essential drugs, medicines and vaccines, suitably utilising evidence-based policies, ethical leadership and governance, as well as built on digital and technologically integrated systems,” he said.

These are the elements of a resilient healthcare system that can meet the needs of the population it serves and weather future pandemics, disasters and any other public health emergencies, but systemic issues needed to be addressed before NHI was implemented.

The World Health Organisation has outlined the pillars of a well-functioning healthcare system, which include: leadership and governance; health system financing; human resources for health; infrastructure; and medical products, vaccines and technologies.

“If you are talking about reform, you have to talk about all of those things. You can’t think you are fixing a system if you are only fixing a small part. Former health ombud Professor Malegapuru Makgoba spoke a lot about the lack of governance and leadership within our country, especially in healthcare,” Mzukwa said.

He added that there was a ratio of 0.35 doctors to 1 000 people in the public sector, compared with 1.75 doctors to 1 000 citizens in the private sector.

“If you look at those disparities, the system is not ready. You also have to consider other social determinants to health – if you don’t fix water in the municipalities, you cannot expect to have a health system that is reformed,” he said.

“None of these issues has been addressed; you can’t think that just pouring in funding will be a silver bullet for the healthcare system.”

SAMA surveys show that most doctors have no certainty about how the NHI will work, he pointed out.

SAMA's concerns were reflected in a report commissioned by organised business, which said SA’s weak economic growth and declining tax base call into question the feasibility of the Health Department’s plan to raise R200bn in taxes to fund the NHI, reports BusinessLIVE.

The total number of taxpayers assessed by the SA Revenue Service declined from close to 5.9m in 2018 to 5.5m in 2021, and just 9% of the population paid 40% of SA’s total tax revenue in 2020, shows the report by consulting firm FTI Consulting.

“It is a stark reminder of the reality we have to work with,” said FTI consulting senior director Paula Armstrong.

The document underpinned the arguments made by Business Unity SA (Busa) and Business for SA as they lobbied Parliament last year to amend or reject the NHI Bill. But the full report was only published on Monday, hard on the heels of President Cyril Ramaphosa saying in his state of the nation address earlier this month that he was “looking for a pen” to sign the Bill into law.

The NHI Bill is the first piece of legislation for the government’s plans for universal health coverage, which aims to provide all eligible patients with health services that are free at the point of delivery. The government has not provided details of the benefits that will be provided by NHI or how it will be financed, but the Health Department said in December 2022 that it anticipated raising an extra R200bn in taxes to fund the scheme.

VAT increase

Raising this amount of money would require increasing VAT from 15% to 21.5%, increasing personal income tax across the board by 31% or imposing a payroll tax on everyone in the formal, non-agricultural sector of the economy by an average of R1 565 a month, according to the report.

The Health Department’s assumption that medical scheme contributions could be redirected into taxes ring-fenced for NHI was unrealistic as there was unlikely to be 100% tax compliance and the Treasury was generally opposed to earmarking taxes for specific programmes, said Armstrong.

Coding crisis 

Meanwhile, SAMA also hosted a half-day coding conference last week – coding being described as “the heart of the data you use to make decisions”.

Experts said it was imperative that NHI, which will deal with a huge budget and numerous public healthcare facilities, has clinical coding to avoid unnecessary waste – but at the moment, South Africa doesn’t have enough coders.

“We have only about 34 of them – but we need thousands,” said Anton van Schalkwyk, SAMA head of clinical coding.

Medical coding is the transformation of healthcare diagnosis, procedures, medical services and equipment into universal medical alphanumeric codes, reports News24.

Van Schalkwyk described it as taking health information into specified code, so that it is uniform and can be read by everyone across the medical space.

“Medical coding provides the universal language to systematise and provide standardised information in terms of procedures being done. The data are standardised into a code where a formal description is added,” he said.

Greg Hatch, vice president at the American Academy of Professional Coders, said: “A coding language allows for standardisation and transparency. It will be difficult to move forward with NHI without having medical codes.

Declaration of Helsinki

Also hosted by SAMA last week was a regional meeting on the Declaration of Helsinki – an ethical guideline document setting the standard for ethical human experimentation conducted by researchers.

Professor Ames Dhai, a SAMA board member, said the intention was to provide a platform for a uniquely African perspective to potentially inform revisions.

Developed in 1964, the declaration has been revised numerous times owing to rapid advancements in science and technology that affect health research and health.

“The Declaration of Helsinki is regarded as the cornerstone document of human research ethics globally. It is particularly relevant to Africa because of the many health challenges … the high burden of infectious and non-communicable diseases; we are a resource-limited region, and we do have infrastructure but it is also limited.

“There is a need – during the review and revision of the declaration – to ensure that current and emerging ethical issues, the best practices in human research, as well as the specific needs and context of Africa, are included as well.”

BusinessLIVE – Weak economy and shrinking tax base cast doubt on NHI, says report

BusinessLIVE Extra money for health workers, but sector’s budget shrinks in real terms

Daily Maverick article – SA Medical Association will be ‘looking for a pen’ to contest NHI Bill if Ramaphosa signs into law (Open access)

News24 article – Why medical coding is important for the implementation of the NHI Fund (Restricted access)



See more from MedicalBrief archives:


Fix current system before NHI implementation


Not just NHI causing SA doctors to flee


NHI heading for ‘Eskom-level stuff-up’





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