South Africa

NHI is a missed opportunity – Life Healthcare

Joe Phaahla

Life Healthcare has labelled the government’s National Health Insurance (NHI) scheme a missed opportunity to improve healthcare in South Africa.

The company also said it would have to consider all options available to ensure the NHI’s implementation does not harm the healthcare industry in South Africa. 

These comments came following the release of its interim results for the six months to the end of March 2024, where the company posted strong results.

Its revenue grew 7.8% to R11.7 billion and its paid patient days increased by 2.3% compared to the prior period. 

This resulted in profit after tax from continuing operations increasing to R735 million and its dividend payout growing sharply by 11.8% to 19c per share. 

The company was also positive in its outlook for the rest of 2024, with it expecting its business to experience continued growth across southern Africa driven by higher occupancy rates. 

One major worry for the private hospital group is the implementation of South Africa’s NHI scheme, which threatens the viability of its business. 

President Cyril Ramaphosa signed the NHI Bill into law on Wednesday, 15 May, just weeks before the country’s national elections, where his party is expected to lose its majority. 

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

Life said in its interim report that it has engaged with the government’s NHI proposal for years and broadly supports the aim of universal access to healthcare in South Africa. 

However, it is concerned that the government’s plan to achieve this is unsustainable and will harm the entire healthcare system. 

“The approval of the Bill without addressing concerns raised during the parliamentary process is a regrettable missed opportunity to expand sustainable access to healthcare,” it said. 

“We, therefore, expect a lengthy implementation journey of NHI due to operational and legislative changes required, as well as the current fiscal constraints.” 

It added that the proposed NHI scheme will significantly impact the sustainability of South Africa’s healthcare system for generations to come. 

Life said it will continue to contribute to the implementation of the government’s NHI scheme. 

It is monitoring the developments around the NHI Act and all related legislation. The company said it would explore all avenues to ensure the sustainability of the healthcare industry. 

NHI will make healthcare worse

Other private medical groups have warned that the implementation of the NHI, in its current form, will make healthcare provision worse in South Africa as it eliminates private funding. 

“Where we are now is unprecedented, and we believe that the NHI, in its current form, will reverse, rather than progress, equitable, quality healthcare in South Africa,” South Africa Health Professionals Collaboration (SAHPC) spokesperson Simon Strahan said

“Our members have made submissions at every stage of the legislative process, dating back to the release of the green paper in 2011,” Strahan said. 

“It is disheartening to see our efforts to contribute to a more robust, workable and patient-centric healthcare system being ignored.”

“We have no doubt that the NHI Bill will be challenged in the courts, and we are currently exploring all our options in this regard,” he said.

Strahan’s comments echo those of the managing director of the Board of Healthcare Funders (BHF), Dr Katlego Mothudi, who said earlier this year that the NHI would worsen healthcare provision in South Africa. 

Mothudi said the private sector has a critical role in advancing access to healthcare in South Africa and urged the government to collaborate with it to this end. 

“BHF does not support the NHI Bill in its current form due to the unconstitutionality of several of its provisions, its proposed restriction of medical schemes, and the concomitant loss of economic value that will inevitably follow,” he said

“The private health funding sector in South Africa should not be sacrificed in favour of NHI.”. 

He argued that the private healthcare sector is a valuable source of jobs, scarce skills, infrastructure, financial investment, and quality healthcare. 

“The value it adds to the economy and the support it provides to the public health sector cannot be underestimated. The bill reduces the role of the private sector, and we want those sections removed,” he said. 

In fact, the NHI Bill weakens the private healthcare system. Mothudi said that weakening any aspect of the private health sector will weaken the national health system rather than strengthen it.