Investec chief economist Annabel Bishop said the government’s National Health Insurance (NHI) plan will lead to the emigration of skilled professionals and taxpayers like doctors and business leaders.
Bishop’s comments come ahead of President Cyril Ramaphosa’s State of the Nation Address (SONA), which is set to be delivered on 8 February.
Bishop expects this year’s SONA – which also falls in an election year – to provide updates on government plans for infrastructure, education, crime, economic growth, health care, and the electricity crisis and freight blockages.
In 2022, the SONA read, “We all know that government does not create jobs. Business creates jobs. Around 80% of all the people employed in South Africa are employed in the private sector.”
Bishop said the speech showed growing openness from the state in working with the private sector to overcome the country’s structural weaknesses in the economy, given state capacity weaknesses in several areas.
“While the SONA will signal the continuation of these state-private sector partnerships in electricity, freight and crime/corruption fighting, this year’s SONA is likely to show more populism creeping in, particularly on the healthcare side,” Bishop warned.
The impending NHI Act seeks to eradicate private-sector healthcare in South Africa, with the majority of healthcare to be provided by the state.
However, Bishop highlighted that this state healthcare has ranked amongst the worst healthcare providers for many years in the World Bank’s global competitiveness survey.
In addition, she said most private-sector doctors and specialists will likely emigrate under the NHI.
However, business leaders, skilled workers and entrepreneurs will emigrate too, and international tourism collapse under state healthcare is the only option.
“This would all negatively affect state revenue, resulting in a massive worsening in borrowing, while state expenditure would rocket, and the prospect of fiscal consolidation disappear,” Bishop warned.
Emigration has already been high in South Africa over the past decade, typically to OECD countries that have both full state and private health care.
“However, the ANC-led government is likely to use the lure of incoming NHI healthcare to garner more votes, although, over the long term, it is likely to result in less, and poorer quality, public healthcare as taxpayers emigrate from South Africa in greatly increased numbers,” she said.
The South African Medical Association (SAMA) and others have previously warned about an exodus of doctors from South Africa because of the looming NHI.
The Bill is currently with President Cyril Ramaphosa, who will reportedly sign off on it before this year’s national elections, according to Khumbudzo Ntshavheni, a minister in the presidency.
Many organisations, including SAMA, warned that the NHI Bill will chase medical professionals out of South Africa.
SAMA said it is deeply concerned about the passing of the NHI Bill despite numerous objections by the organisation.
It said the Bill excluded suggestions by medical professionals, including doctors, which poses a risk of an exodus of these sought-after skills from the country.
Without healthcare professionals’ buy-in, the chance of success for the planned NHI is slim.
Discovery Health CEO Ryan Noach has also warned that the NHI risks chasing doctors and other healthcare professionals out of the country.
Noach said the planned NHI creates a negative sentiment among healthcare professionals, which can damage the healthcare sector.
“In the short term, we believe the biggest risk of the NHI Bill is medical professionals leaving South Africa,” he said. “It creates a negative sentiment among healthcare professionals.”
“Unfortunately, medical professionals in the public sector are battling a poorly managed system. It has been demonstrated repeatedly.”