Health Minister Dr Aaron Motsoaledi said investigations have been launched into private sector corruption resulting from medical aid fraud, inflated prices for procedures and supplies, and fraudulent medico-legal suits of malpractice against the state.
In an interview with Business Report after the Department of Health’s budget vote in Parliament, during which he faced strenuous opposition to the NHI, with critics saying it would drain public resources because of corruption, poor management, and poor maintenance of infrastructure in the public sector, Motsoaledi said there were similar concerns with the private sector.
“Corruption … is happening on both sides. It is up to us as South Africans how we get rid of it. I am told more than R228bn is lost in the private sector,” he said.
The Minister said he had received the preliminary findings of the anti-corruption forum initiated by the government, and was awaiting a report from the Special Investigating Unit (SIU).
This, he said, was part of an exercise to clean up the sector, including incidents from the Covid-19 era.
“Another huge practice of corruption in the healthcare system is happening with lawyers and medico-legal litigation where huge amounts are paid out yearly that could help the healthcare system.
“Many believe it is the carelessness of the doctors, but quite a large amount of it is fraud. We need the unit to look into that,” he said.
He said corruption in the private sector was widespread and included concerns that most deliveries of babies were by Caesarean section, reducing attendance time for doctors but providing a better financial opportunity, reports Cape Times.
NHI on track
“The implementation of the NHI is already under way. There is not a point where we will sit back and say we are starting now.
“Even the UK, which started its universal healthcare system in 1948, is still changing it as people are evolving,” Motsoaledi said.
“We have started with improving the health register so that patients’ files can be accessible anywhere in the country, whether it is a public or private facility. We have initiated a public-private partnership in the Free State and we will move on from that.”
However, there are a number of potential obstacles ahead before full implementation is likely. Apart from several NGOs having threatened to challenge the NHI in court, the DA has also categorised the scheme as “problematic”, while there are major questions over a lack of clarity on funding.
Cover exhausted
Motsoaledi said “rich people” were subsidised by the fiscus, and that this, and the public healthcare system, inevitably bore the burden when patients on medical aid exhausted their cover and returned to the system for care.
“There is the wrong assumption that people who qualify to use the private sector go away. The same people we pay to go away come back in September or when they have exhausted their funds, and they want the same public health sector to provide services to them,” he said.
“We take R70bn directly to subsidise public servants and then there is about R30bn paid out by SARS in rebates.”
The funding of the NHI, he added, can come from that R70bn, noting that about 1.3m public representatives and public servants benefit from medical aid.
“A total of 1.3m public servants, plus all Members of Parliament… and legislatures, and all the judges of our country, are subsidised by the fiscus of this country to the tune of this R70bn per annum.
“Any person in our country who is on medical aid, regardless of who their employer is, gets tax rebates from SARS.
“These amount to R30bn – hence, it’s R100bn that goes out to subsidise us, the rich, and leaves out the poor.”
Stumbling blocks
It has conservatively been estimated that funding of free universal healthcare will cost more than R200bn per year, with some even saying R1 trillion, reports Daily Investor.
The Bureau for Economic Research (BER) has previously said NHI affordability is complicated and largely depends on how the basic benefit package is structured.
Although several estimates of the annual cost of the scheme have been thrown around, the Health Department has not yet shared its basic benefit package publicly: therefore, it is still not clear what will be included.
However, the BER said that probably, at least initially, the basic benefit package will be focused on child health, preventative primary healthcare services and maternal and reproductive healthcare services.
“The initial package will probably be closely aligned with the primary healthcare services offered at public primary facilities and emergency services provided in the public health system,” it said.
The department’s cost estimates are dated, the White Papers of 2015 and 2017 projecting a cost of R256bn (2010 prices) by 2024/25.
Adjusting for CPI inflation, this comes out to a full roll-out cost of about R470bn by 2024/25 (2022 prices). The allocated government health budget for 2024/25 equates to R254bn (in 2022 prices).
“This implies that the original projected NHI cost is about twice the current health budget,” the BER said.
“The Green and White papers rely on reallocating private health spending to the NHI Fund and further fundraising through other means,” it said.
“But even this simple calculation illustrates that South Africa is unlikely to afford this cost, given current fiscal and economic conditions and competing areas of social expenditure such as grants and education.”
“The idea that South Africa can double its health expenditure relies on the assumption that private health expenditure is fully reallocated to the NHI Fund, which is highly unlikely.”
While the Health Department wants to feed medical aid tax credits into the NHI Fund, it said last year that it had no intention of appropriating the money that is already part of medical scheme funds.
Options
it has been suggested there are three potential options to stop the creation of the NHI in its current form and possibly pave the way for a better system, Business Tech reports.
While healthcare experts say there are limited options to contain what some predict could be a disaster for healthcare, Momentum Health Solutions and political lobbyist Ehicore suggest several voices will influence the NHI’s impact on health policy.
“The ANC will default to its policy resolutions as it holds the position of Minister of Finance, Minister and Deputy Minister of Health – but it will be pushed and challenged inside the cabinet.
“Previously, the Cabinet has always made decisions by agreement and consensus after consultation and discussion, meaning no threshold or veto existed for moving on an issue.”
While the seventh administration cannot reverse the status of the NHI Act now, with the President unable to return it to Parliament, Ehicore said Parliament is empowered to repeal old Acts and to make decisions informed by the nature of the legislation and legislation that may have already been initiated, introduced, or passed.
Now, added Ehicore, only three mechanisms exist that could have an impact on its implementation.
• An agreement on a phased approach and only promulgating certain clauses in the Act at differentiated times are subject to consultation between the President, Minister of Finance, and Minister of Health, primarily on budget, resources, and capacity.
• The executive or Parliament introduces an amendment to the NHI Act.
• Multiple litigious actions result in an outcome, forcing the department to review and amend the Act to address the concerns in a court ruling, and thus, the Act cannot be implemented in its current state.
Cape Times PressReader article – ‘r228bn lost through private sector graft’ (Open access)
Business Tech article – 3 ways the NHI can be ‘stopped’ in South Africa (Open access)
Daily Investor article – Medical aid subsidies and tax rebates under threat (Open access)
See more from MedicalBrief archives:
No decision on taxes funding NHI, says Finance Minister
HFA opposes proposed medical scheme tax credits’ removal
Budget 2018: Med scheme tax credits capped for NHI
Tax credits worth R25bn to be phased out to fund NHI