South Africa

No panic over NHI

The government’s National Health Insurance (NHI) scheme, in its current form, will ultimately delay universal access to healthcare because it will be challenged legally and has fundamental flaws. 

This is feedback from Netcare CEO Richard Friedland, who told Business Day TV that the company is not worried about implementing the scheme in South Africa. 

Friedland’s comments came on the back of Netcare releasing its results for the first six months of its financial year on Monday.

The private hospital group’s revenue increased more than 4% to R12 billion in the six months ended March, with core profit lifting 7.5% despite a 0.8% fall in paid-patient days.

Patient numbers were slightly suppressed by a later start to the school year in 2024 and earlier Easter holidays. 

The company cut its guidance for the full year to between -0.5% and 0.5%, having guided growth of as much as 3.5% previously. 

Much of Netcare’s focus was on assuaging fears that the government’s NHI scheme would not significantly impact its business. 

The NHI Act, signed into law by President Ramaphosa earlier this month, 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. 

While this promises to significantly disrupt Netcare’s business, CEO Richard Friedland said the opposite is more likely to be true. 

“There is no panic whatsoever,” he said when asked if the company had any fears about the NHI. 

“Since our inception as Netcare, we have always recognised the significant inequity in the delivery and access to healthcare in South Africa.”

“We fully embrace the concept of universal healthcare. The big question is how do we achieve that,” he explained. 

Netcare, along with other private medical groups, academics, and civil society organisations, has provided extensive feedback to the government about implementing the NHI. 

“Unfortunately, most of that has been ignored, and we think that is a missed opportunity as we think there are fundamental flaws here and have no doubt that many will challenge this legally.” 

Friedland said that despite the Act’s aims, it would likely have the opposite effect of its stated goals. 

“The unfortunate aspect is that it will further delay the implementation of something that is critical for us in South Africa.”

Netcare, in its results, outlined that it expects the number of people using its facilities to increase, even if at lower margins.

The company’s chairman has previously said that the NHI is not only unworkable and unaffordable but also unconstitutional on substantive and procedural grounds.

“The NHI Bill in its current form poses serious challenges of practicality and affordability,” Netcare chairman Mark Bower said.

It also lacks clarity on critical issues such as what will be covered by the NHI and what won’t, how it will be financed, and how much it will cost.

“We are particularly concerned about specific provisions in the Bill that prevent medical aid schemes from funding services provided by the NHI,” Bower said.

“In effect, these provisions take money out of the national health system and pose the real threat of collapsing the health insurance industry in SA.”

Bower said there are far better alternatives that involve private and public sector collaboration.