Top South African company warns about NHI corruption

Bonitas Medical Fund has warned that the government’s plan for the National Health Insurance (NHI) presents a significant risk to its business, partly due to the potential impact of corruption.

Bonitas recently released its results for the 2024 financial year, which showed a strong performance for the second-largest open medical scheme in South Africa.

The company’s integrated report also contained what Bonitas considers to be its most significant strategic risks, which included the government’s plans to establish NHI in South Africa.

The NHI is the government’s strategy to achieve universal health coverage for South Africa. 

The intention is that the government will purchase healthcare services through a centralised, national insurance fund funded through taxes and special contributions. 

Once NHI is fully implemented, private medical schemes will only be able to offer ‘complementary services’ that are not available through the NHI.

Since the NHI Green Paper was published for public consultation in 2011, this plan has been met with severe criticism, which has primarily centred around the plan’s lack of detail.

For example, it is not clear how South Africa’s strained fiscus will be able to fund this ambitious plan, which some have estimated would cost R1.3 trillion annually.

From a legal standpoint, the legislation has also been criticised for potential unconstitutionality.

This is because the limits the NHI Act places on private medical aids could be seen as limiting South Africa’s freedom of choice, which is enshrined in the Bill of Rights.

“All international concepts of universal healthcare make provision for freedom of choice, and we believe citizens should be allowed to purchase additional healthcare should they have the desire and means to do so,” Bonitas said.

Several lawsuits against the NHI have been filed for this reason and for the potential infringement of companies’ legal right to conduct business in South Africa.

While the NHI Act clarifies that private medical schemes can only offer ‘complementary services’, it is not clear what these services will be.

In addition, Bonitas stated that it is unclear how the government will ensure the required “rigorous governance” of the fund.

The company highlighted that the impact of potential corruption and misuse of health funds under the NHI presents a significant risk to its sustainability and structure.

This concern has also been voiced by Professor Alex van den Heever of the Wits School of Governance.

Van den Heever has previously warned that the possibilities for corruption with the NHI scheme are “endless” as it will effectively put around R600 billion in funding under the control of a single institution – the National Department of Health.

Bonitas’ alternative

Bonitas maintained that a citizen-centric, multi-funder, multi-provider system is the best way for universal healthcare to succeed in South Africa. 

It explained that this would require close collaboration between the public and private sectors, strong leadership, accountability, and dealing with socioeconomic issues as an integral part of the process.

Business Leadership South Africa CEO Busi Mavuso has made a similar argument, calling the NHI in its current form a “farce.”

“The NHI as it stands is a farce – it’s unimplementable, it’s unfundable,” Mavuso said. “What it does seek to do is to decimate the private health-care system,” she said.

She has also said that the government is contradicting itself by using the private sector’s help to solve South Africa’s water and electricity crisis while forcing them out of the healthcare sector through the NHI.

“Both of these show the power of the state and private sector working in tandem,” Mavuso said. 

“The private sector is good at managing operational risk, raising investment and building infrastructure.”

“It is good at maintaining infrastructure, given that it depends on consistent and functional infrastructure to provide the outputs that generate its revenue.” 

She said good partnerships between the state and private sector are formed when there is appropriate allocation of risks to those who are best positioned to manage them.

Bonitas, in response to the NHI, said it is actively pursuing all avenues to address the unanswered questions and practical implications of the NHI in the best interest of its members.

It is also working with stakeholders such as the Board of Healthcare Funders to lobby the government regarding the importance of an effective, efficient and well-governed NHI, and the critical role of the private sector in ensuring universal healthcare.