Good news for medical aid members in South Africa

South Africa may not need to implement the government’s National Health Insurance (NHI) scheme after an alternative has been gaining traction among President Cyril Ramaphosa’s allies.

City Press recently reported that the Hospital Association of South Africa (HASA)’s alternative to the NHI scheme has drawn support from Ramaphosa’s allies.

The publication reported that proponents of the middle-ground option believe it will mean better healthcare for the poor without strangling private medical funds.

At the recent HASA Conference, Netcare CEO Dr Richard Friedland outlined a proposal for mandatory healthcare insurance for all formally employed workers in South Africa. 

This measure, he explained, would significantly increase medical scheme coverage and allow the government to allocate more resources to the remaining population without increasing the overall health budget.

Friedland suggested that private hospitals are willing to collaborate with the government to address South Africa’s healthcare challenges. 

He highlighted mandatory medical cover as a viable solution that has been extensively studied and could be implemented quickly to improve healthcare access for all citizens.

The proposal aligns with the ANC’s 1994 Health Plan, which recommended mandatory cover for formally employed individuals. 

In addition, the National Department of Health Social Health Insurance Working Group in 1997 suggested confining mandatory cover to those above the income tax threshold due to affordability concerns.

The following would be key benefits of the proposal:

• Increased Coverage: Mandatory insurance could cover up to 27.5 million people, significantly expanding medical scheme coverage.
• Reduced Government Burden: The government’s responsibility for providing healthcare would decrease from 85% to 56% of the population. 
• Increased Public Health Spending: Per capita public health expenditure could increase by 52% without additional funding. 
• Improved Healthcare Access: Reduced strain on the public healthcare system would lead to shorter waiting times, better infrastructure, and increased medical skills training.
• Economic Benefits: The proposal could stimulate economic growth by creating jobs and reducing the burden on the public health system.

Friedland outlined a three-phase implementation plan, starting with those above the tax threshold and gradually expanding coverage to include those below the threshold.

City Press reported that the presentation was positively received in the private sector, and its sister publication Rapport said it also received high-level support in the ANC, especially from senior members close to Ramaphosa.

However, the publication warned that a significant faction in the party, including Health Minister Aaron Motsoaledi, is still committed to the NHI system. 

Business blowback

This alternative plan comes after prominent business leaders and medical organisations have been vocal about their disapproval of the government’s NHI scheme.

Despite significant opposition, the second Presidential Health Compact was signed on Thursday, 22 August, advancing NHI in South Africa. 

This initiative, led by Ramaphosa, sought to garner support from government, businesses, and healthcare professionals for the NHI in its current form.

The second compact follows the 2023 Presidential Health Summit, which built on the 2018 inaugural summit. 

It brought together a wide range of stakeholders, including government, business, labour, civil society, health professionals, unions, service users, statutory councils, academia, and researchers, to address challenges within the national health system and develop sustainable, inclusive solutions.

However, the event was marked by notable opposition. Business Unity South Africa (BUSA) and two medical organizations expressed dissatisfaction, refusing to sign the compact. 

They raised concerns about the NHI’s affordability, feasibility, and lack of consultation on the compact’s amendments.

BUSA – the apex business organisation representing South African businesses – wrote to the President expressing its concerns. 

The organisation noted that the compact promotes NHI as the core foundation of healthcare reform, a stance they oppose. 

BUSA CEO Cas Coovadia emphasized the organization’s disagreement with the NHI Act, questioning its feasibility as a legislative tool for universal health coverage.

Coovadia highlighted that while the 2018 Presidential Health Summit Compact aimed to strengthen South Africa’s health system, the current compact’s focus had shifted heavily towards NHI implementation without adequate consultation. 

He noted that the original compact had minimal references to NHI, focusing instead on immediate health improvements such as strengthening supply chain management, infrastructure, and accountability.

Similarly, the South African Health Professionals Collaboration (SAHPC), representing over 25,000 healthcare workers, declined to sign the compact. 

The SAHPC criticised the document as biased towards securing support for the NHI Act. 

While the organization acknowledged the need for healthcare reforms, it argued that the NHI, as proposed, is not the solution. 

SAHPC spokesperson Simon Strachan expressed concerns that the compact presents NHI as the only viable path to universal health coverage, dismissing alternative proposals from the private sector.

“The compact heavily focuses on the NHI, presenting it as the only viable option for the country, which we don’t accept,” he said.

“Our primary concern is, and always will be, the well-being of patients. We do not believe the NHI is a viable or workable model for universal health coverage. Our numerous proposals and concerns have not been acknowledged.”