Government tested NHI before – and failed

From 2012 to 2017, the Department of Health (DoH) implemented the first phase of a National Health Insurance (NHI) scheme – and was met with several challenges.

Initially, the DoH attempted to implement the NHI through a gradual process spanning three “phases”, each of which was to be implemented over five years.

Phase one commenced in 2012 and was completed in 2017. It did not involve developing new funding arrangements for healthcare in South Africa but rather piloted various “health system strengthening interventions” focused at the primary healthcare level. 

The interventions implemented during this phase were mainly funded by a direct NHI Conditional Grant to provinces, although other funding mechanisms existed. 

Private consultancy Genesis Analytics with support from PwC, the Centre for Health Policy at Wits University and Insight Actuaries and Consultants undertook an evaluation of the first phase from November 2017 to 2018 and presented their findings in November 2018 to the then Health Minister, Dr Aaron Motsoaledi.

BusinessDay reported at the time that, due to problems with data quality, it could not be concluded that the NHI pilot projects, which cost more than R4 billion over five years, improved each district’s overall health.

According to BusinessDay and the pilot report, the evaluation revealed several problems and shortcomings in the pilot projects, raising concerns about implementing the NHI. Some of the key findings include:

• Inadequate healthcare access for children: Children identified as needing healthcare did not receive it, indicating a failure in delivering necessary services.
• Incomplete infrastructure projects: Many planned infrastructure projects were not implemented or completed due to a lack of planning and delayed funding, leading to a deterioration of facilities.
• Internet connectivity issues: Computers were sent to clinics without internet access, hampering the effectiveness of the health patient registration system and the stock visibility system for monitoring medicine supplies.
• Staffing challenges: While workload indicators of staffing needs were implemented, vacant positions could not be filled due to frozen posts. Collaboration with the Treasury is needed to address staffing needs effectively.
• Changing standards and training manuals: The “ideal clinic” initiative faced challenges as clinic managers struggled to keep up with changing standards and training manuals, hindering the attainment of ideal clinic status.
• Lack of follow-up on referrals: The evaluation could not determine how many children identified with health issues received necessary care, as there was a lack of data. Referral systems were not effectively implemented, and transport was not available for children referred to clinics or specialists.
• Costly contracting of general practitioners: Hiring private doctors to work in government clinics turned out to be more expensive than anticipated. Only 350 part-time private doctors were hired for the pilot projects.
• Challenges with specialist teams: Sending specialist doctors to health districts overloaded already burdened state specialists, and their effectiveness as mentors varied. The model was costly and stretched limited resources in the private sector.

According to the evaluation, “Overall, the implementation of the pilot interventions had mixed success across the pilot districts.” 

“Where successful, we identified a few common factors: strong political will, adequate human and financial resources for implementation, good coordination and communication, and good monitoring systems put in place at the time of implementation,” the report said.

“However, the interventions also faced several challenges, and, to varying degrees, these factors hindered their success:

• Inadequate planning,
• Lack of resources,
• Inconsistent communication,
• A lack of coordination where necessary and
• Insufficient mechanisms to monitor progress to ensure course correction.

The report identified four main components of governance critical for the successful implementation of NHI: clarity of vision, setting appropriate priorities, performance management and accountability. 

Since the end of phase 1, the official plan has changed to one with two phases, News24 recently reported. 

The first phase is due to start this year and run until 2026 and is intended to “prepare the ground” and start delivering for the following groups: children, women, the elderly, and people with disabilities. 

According to News24, healthcare services for these groups are supposed to be bought from the private sector.

Phase 2 will run until 2028 and is intended to broaden the contracting of health services from private providers beyond those groups and set up the “mandatory prepayment” system – the taxes that will be used to fund the NHI.

“By 2029, everyone with an income is supposed to be paying into the NHI, and everyone is supposed to be eligible for treatment under it,” News24 reported.