NHI battle in South Africa

Criticism of the government’s National Health Insurance (NHI) plan has heated up over the past few months, and the legislation faces an uphill battle to implementation.

The NHI has been an ANC talking point and campaign promise for years but only officially became law this year. In May, shortly before the national election, President Cyril Ramaphosa signed the NHI Bill into law.

The scheme seeks to reform South Africa’s healthcare system, establish universal access to health services, and address significant socio-economic disparities from the past.

The legislation outlines a state-run fund to deliver universal care and prohibits the private sector from funding treatments included under the plan.

The decision to enact this legislation was made despite strong opposition from various industry stakeholders and experts.

While many support universal health coverage as a concept, their criticism of this legislation revolved around other aspects of the plan, including constitutional validity, economic feasibility, and its potential impact on both public and private healthcare sectors.

Despite this criticism and threats of legal action, the government went ahead with its plan and doubled down by signing the second Presidential Health Compact in August, marking one step forward for NHI in South Africa.

The Health Compact is Ramaphosa’s attempt to get the government, businesses, and healthcare professionals to support the implementation of NHI in its current form. 

The second compact follows the 2023 Presidential Health Summit, which built on the inaugural summit of 2018 and brought together several stakeholders. 

These include government, business, labour, civil society, health professionals, unions, service users, statutory councils, academia, and researchers to “develop sustainable and inclusive solutions to challenges in the national health system”. 

However, this event was also met with staunch opposition, particularly from business lobbies and medical organisations that refused to sign.

Their opposition spurred Ramaphosa to call on the country’s biggest business lobby group to submit proposals in September on its concerns with the legislation.

The President requested Business Unity South Africa – which has opposed the government’s NHI plan since its inception – to “put forward specific proposals on the remaining issues of concern as a basis for further engagement”.

“The government remains committed to engaging with all stakeholders in good faith in the process of health-care reform and finding workable solutions that will advance quality and affordable health care for all,” the Presidency said.   

BUSA has previously described the plan as unaffordable and unconstitutional. It has also said the legislation, in its current form, is unimplementable and damaging to the country’s healthcare sector, the economy more broadly, and investor confidence.

However, the government’s NHI plan has faced more than just criticism – the legislation is expected to be tied up in court for years, with trade union Solidarity having dealt the first blow.

The Pretoria High Court handed down judgment in Solidarity’s case against the Minister of Health, the President, and the Health Department’s Director General in July this year.

The sections the court declared invalid relate to the legislation’s provision for a “Certificate of Need”, which the National Department of Health wants to adopt to exert more control over where doctors and medical professionals can practice in the country.

In its application for this case, Solidarity argued that the requirement of a certificate of need infringes unlawfully on the right of health practitioners to practise their profession.

Solidarity said that had these sections come into effect, it would have amounted to the expropriation, as it were, of health practitioners’ businesses and their property at the expense of both the practitioners and those who are currently using their services.

This reasoning was validated in the High Court, which ruled that sections 36 to 40 of the National Health Act (NHA), which gives the government power to determine where medical practitioners practise, are invalid and unconstitutional. 

Solidarity CEO Dirk Hermann said this ruling means parts of the NHI are likely illegal.

Hermann explained that these provisions would have granted the government excessive control over medical practices, potentially leading to irresponsible use of power. He asserted that the government should not possess such authority.

In a press statement released after the judgement was handed down, Solidarity said the state’s goal with these sections was clearly to pave the way for the NHI and compensate for the bankruptcy of the state coffers.

Don’t be concerned – yet

While implementing NHI in South Africa would drastically change the country’s healthcare industry, Discovery said the legislation would not change the status quo until much later.

Until then, and despite concerns about the law’s potential impact on private insurers, Discovery believes there is a desire to find solutions that benefit all South Africans.

Discovery CEO Adrian Gore said he was heartened by the engagements between Ramaphosa and BUSA.

“I got a good-faith feeling from that meeting that there’s a desire to find solutions – that’s a much better road than conflict and litigation,” Discovery CEO Adrian Gore, who is also BUSA’s vice president, said in an interview.

“I don’t think anyone believes the status quo is acceptable. I think everyone’s saying, ‘How do you make this thing operate so that it helps all South Africans?’” 

Gore’s sentiments have been echoed by Craig Comrie, Chairperson of the Health Funders Association.

Comrie recently welcomed the meeting between Ramaphosa and BUSA as a positive step.

“As a member of BUSA, we find it encouraging that the Minister and Deputy Minister of Health, along with other senior officials, were part of this constructive and forward-looking discussion,” he said.

“We can only hope that these recent discussions will mark the start of a series of engagements with key stakeholders, as the South African government must engage in open dialogue with all stakeholders, including private healthcare providers, medical schemes, and the general public.”

“HFA will provide industry input to BUSA’s presentation to the President to help propose workable solutions to set South Africa’s healthcare train on the right track with inclusive mechanisms that will benefit all.”

Discovery’s modelling shows that South Africa will need R200 billion a year in additional funding to make the law’s aim of achieving universal access workable.

That would result in a 30% increase in income taxes and a 70% cut to the benefits private-sector members typically enjoy. 

“We do not believe NHI is workable without private-sector inclusion. We need more funding, we need more doctors, we need more resources, and that’s a key issue,” Gore said.

In the meantime, the insurer says it does not expect the new law to impact its operations in the short term because it has yet to be fully implemented. 

According to the NHI Act, the first implementation phase is supposed to run from 2023 to 2026, during which time the government will establish the related fund and complete other groundwork. 

The second phase, which would see the mobilization of resources and operationalization of the NHI fund as a purchaser of healthcare services through a system of mandatory prepayment, is slated to run from 2026 to 2028.

“I don’t think people should be concerned about in the short term, but in the medium to long term, we’ve got to find solutions,” Gore said.