Dump NHI and completely privatise healthcare in South Africa – Dawie Roodt

Efficient Group chief economist Dawie Roodt said the only workable alternative to National Health Insurance (NHI) is completely privatising South Africa’s healthcare system.

Roodt delivered a presentation on his proposal for a new approach to healthcare at AfriForum’s recent conference on the NHI on 6 May 2024.

Parliament’s National Council of Provinces approved the NHI Bill in December and has since referred it to the President, who can either assent to it or ask lawmakers to amend it if it’s deemed to be legally or technically flawed.

The Bill provides a framework for providing universal care through a state-run fund and will ban the private sector from financing treatment covered under the plan. 

While he has signalled that he plans to sign it, Ramaphosa has yet to provide a time frame for when he would enact the legislation.

In his presentation at the Afriforum conference, Roodt said the NHI is an unattainable ideal because the South African government lacks the money and ability to implement this plan successfully.

Therefore, as an alternative, Roodt suggested that legislation be introduced that makes membership to a medical aid compulsory for all South Africans. 

This will allow existing medical aid members to continue their membership unhindered. 

After the privatisation of all state medical services, the rest of the population will be grouped into one of at least three private funds to gain access to limited yet high-quality private medical care. 

This funding will be drawn from the state’s healthcare budget, which is currently pumped into struggling or dysfunctional hospitals or clinics. 

Roodt further argued that patients requiring further medical care should be accommodated in training hospitals.

Private-public collaboration

Discovery CEO Adrian Gore has previously said the NHI scheme will not be workable unless the public and private sectors work together.

He said Discovery supports the implementation of universal health coverage in South Africa, and “we have to make it work”.

However, he said the NHI is not workable without private-sector collaboration. 

“When you look at the numbers, the funding, the complexity – it requires private sector collaboration, and if that can be achieved, then the Bill can be made workable,” he said.

Currently, the Bill says that once the NHI is fully implemented, private medical schemes cannot provide coverage for things the NHI covers. 

Gore said the NHI Bill, in its current form, would require significant additional funding, estimated to be over R200 billion.

The only way for the government to raise this additional funding consistently is to raise taxes. Gore estimated it would require a 30% increase in personal income tax or a 22% value-added tax.

This, he said, would destroy South Africa’s economy and only achieve a marginal benefit for public sector healthcare.

The NHI will also need more doctors and hospitals, many of which could only come from the private sector.

Gore, therefore, thinks a blended and multi-funder model would be a better way to implement universal health coverage in South Africa.