Busi Mavuso’s good news about NHI

Business Leadership South Africa CEO Busi Mavuso said the good news about the National Health Insurance (NHI) Act is that it is unworkable, as there is no funding for it, and the legislation faces multiple legal challenges.

In her latest newsletter, Mavuso slammed the government for enacting the NHI Bill despite widespread criticism from industry roleplayers.

President Cyril Ramaphosa assented to the Bill on Wednesday, 15 May 2024, after decades of promising universal healthcare to South Africans.

While the concept of universal health coverage has been supported by many, there has been widespread criticism of the NHI Bill in its current form.

Before the Bill was enacted, critics expressed concerns about how NHI would be funded and the role of the private sector under an NHI model.

The NHI Bill relegates the role of private healthcare providers to only services that the NHI does not cover.

Mavuso said the government contradicts 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 Act.

“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.” 

“Good partnerships between the state and private sector are formed when there is appropriate allocation of risks to those best positioned to manage them.”

She said these kinds of structural reforms are vital for economic growth. 

While they do not deliver immediate results, they establish the environment in which investment can happen and, over time, much greater economic activity results. 

However, she said the NHI Act is a stark contrast to the successes achieved in the energy and water sectors. 

Mavuso explained that, rather than combining the best of public and private, this legislation poses a major threat to the private sector. 

“Despite significant objections from the private sector, ranging from healthcare practitioners to medical aids, the President has chosen to ignore the many recommendations that would have improved the workability of a national health insurance scheme,” she said. 

However, she said there is some good news about the NHI. “The good news, if I can call it that, is the legislation is unworkable,” she said.

“There is simply no funding for it. It also faces many legal challenges – from the way it was drawn up to its constitutionality.”

She expects litigation about the bill to start in various quarters. 

“Even on its own timeline, full implementation is only going to happen after 2032/33. While it is scant assurance, I hope our healthcare professionals, as well as the many medical scheme members who depend on them, will remain committed to the existing system,” she said.

Since the signing of the NHI Bill, several organisations have expressed their intention to challenge the legislation in court. 

Business groups, such as Business for South Africa, have said the NHI, as proposed, has no practical funding model, does not pass constitutional muster, and will be tied up in the courts.

Business Unity South Africa CEO Cas Coovadia said that, in response to the NHI becoming law, the organisation would consider its options, including legal action. 

“Our subsequent actions will be guided by our belief that it is essential that we get the NHI right through all means still at our disposal, including appropriate legal interventions,” Coovadia said. 

Trade union Solidarity has already taken the National Department of Health to court once before over the NHI late last year and promised to challenge it by all means necessary. 

South Africa’s main opposition party, the Democratic Alliance, has also said it would take the government to court over the implementation of the NHI. 

Health Minister Joe Phaahla said the government is ready to defend the NHI in court and understands that some corners of South Africa are willing to engage in ‘lawfare’ to prevent the scheme from being implemented. 

“There is so much that can be achieved for South Africa when we work productively together, drawing on our respective strengths,” Mavuso said. 

“Last week, in many ways, showed that, with big strides to solve our electricity and water challenges.” 

“It is a tragedy that the opposite was also true – counterproductive and unworkable legislation that will leave everyone worse off. My sincere hope is that the next administration can resolve this incoherence.”