Government’s NHI plan ‘irrational’ – Discovery CEO

South Africa’s ambition to reform its health system through a controversial national insurance plan is irrational in its current form, risks destabilising the tax base and needs the private sector’s help to succeed, according to Adrian Gore, the head of Discovery.

The National Health Insurance Bill, which aims to provide universal care through a state-run fund, bans the private sector from covering treatment covered under the plan.

The proposal was approved last week by a second parliamentary chamber and is now being referred to President Cyril Ramaphosa, who can either sign it into law or request lawmakers to amend it.

The proposal doesn’t sufficiently tackle the core issue of there being too little funding for it to be viable, said Gore, the founder of the Johannesburg-based administrator of the country’s largest medical insurance provider.

The ruling African National Congress first agreed to the NHI plan in 2007 to broaden access to medical treatment in a nation where almost 85% of the population relies on a battered public system with too few doctors. 

“The tragedy of our country is a narrow tax base with high levels of unemployment,” Gore told a media briefing on Monday. “You don’t have sufficient money to buy comprehensive benefits for all South Africans.”

The government hasn’t spelt out how it will raise the required funding, estimated to be as much as R500 billion a year. Discovery projects the NHI will result in a 70% cut in health services for those who pay taxes – largely the same people buying private medical insurance – while levies will climb 30%.

“It just doesn’t seem plausible,” he said. “You could seriously destabilize the taxpayers that actually are funding the NHI.”

While this concern has been expressed by many in the private sector – and some have said if signed into law in its current form, it will be challenged in court – Gore said Discovery hasn’t yet decided whether to take that step or petition the president.

“Our approach will always be to try and make the NHI workable,” he said. “We’ll have to see how it plays out.”