BLSA warns of ‘catastrophic’ National Health Insurance Bill

Business Leadership South Africa (BLSA) CEO Busi Mavuso said implementing the National Health Insurance (NHI) Bill would leave all South Africans “worse off”, and have potentially “catastrophic” consequences.

Despite strong opposition from various stakeholders, the NHI Bill was recently passed through the Portfolio Committee on Health in South Africa.

It was introduced in Parliament in August 2019 and was subsequently referred to the Portfolio Committee for consideration. 

The NHI Bill aims to ensure universal access to healthcare by creating a single public health fund set to be funded through general taxes and contributions from higher-income individuals.

According to Parliament, “This means that every South African will have a right to access comprehensive healthcare services free of charge at the point of care at accredited health facilities, such as clinics, hospitals and private health practitioners.” 

The Bill will, therefore, implement a single-payer model in which government is the only buyer of healthcare services for its citizens.

It would only allow private insurance and medical aids to offer complementary coverage for services not covered by the state scheme. 

Herein lies the problem, according to Mavuso, who said the principles of competition and patient choice – which this Bill would eliminate – are essential in healthcare.

Health Minister Joe Phaahla. Source: GCIS

Competition and choice reduce wastage, spur innovation and drive insurers and healthcare providers to cater to patient demands. 

“A single-buyer model interferes with accountability by removing the buying decision from the patient. Instead, an elaborate bureaucracy must somehow oversee care quality to overcome the problem that patients can no longer choose their providers,” she said. 

“The monitoring costs, if the quality is going to be maintained, will swamp the purported gains from economies of scale. And the reality is that the healthcare system as it stands often fails to monitor care quality.”

Mavuso said business has every interest in seeing universal health coverage in South Africa, but it must be implemented sustainably and in a way that best uses scarce state resources.

“National Health Insurance, as it is conceived in the Bill now approved by the Health Committee in Parliament, is not that,” she said.

“Indeed, in my view, the NHI envisaged in the bill would leave all South Africans worse off, in a system in which state provision becomes impossible and private health provision is effectively closed down.”

Private-public harmony

Mavuso said the NHI Bill illustrates that the government did not learn from other successful public-private partnerships.

She used the Covid-19 pandemic as an example where a partnership between the government and private sector proved successful. Together, the two entities could source equipment and medicines, roll out vaccines and fund other interventions.

“It was a clear demonstration that national health outcomes are achieved faster and more efficiently when government and business work together, drawing on their respective strengths,” she said.

“With the right incentives, the private sector can complement government efforts, speed up the investment needed and reduce costs to the state and users.” 

Mavuso pointed to the Affordable Care Act (Obamacare) in the US as a viable alternative to NHI with a single-buyer model.

Under Obamacare, health insurers must provide minimum benefits, and the state subsidises those earning below a threshold.

However, insurers also compete in a marketplace to offer coverage, and consumers can choose their providers. 

Former US President Barack Obama signed the Affordable Care Act (colloquially known as Obamacare) into law in 2010.

“This approach focuses scarce public resources where it matters: supporting those who do not work or earn below a threshold while ensuring market incentives reduce costs and improve service quality,” said Mavuso.

“Together, we can build a mechanism that delivers the best possible universal healthcare to South Africans at the lowest cost while ensuring we do not destroy the parts of our health system that do work effectively.”

Additionally, forcing the private sector out of healthcare provision could discourage internationally mobile businesspeople from working in South Africa.

Mavuso said the proposed NHI system would also be excessively costly, divert resources from other government services, and increase the tax burden on citizens. 

She also argued that the quality of care under the NHI would not necessarily improve compared to the current system. 

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


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