NHI on the wrong track

The government’s National Health Insurance (NHI) plan, in its current form, will be ineffective and likely unconstitutional if the private sector does not challenge it.

This is according to the Chairperson of the Health Funders Association (HFA), Craig Comrie, who said the signing of the NHI Bill into law has set the stage for one of the most significant overhauls of South Africa’s healthcare system. 

“As the government embarks on this ambitious plan, the stakes have never been higher,” he said.

“The NHI Act is more than a mere piece of legislation; it stands as a test of constitutional rights and the nation’s commitment to fostering a more inclusive and equitable society.”

Since its inception, the government’s NHI scheme has been met with severe criticism, particularly from private sector roleplayers.

Opposition to the NHI recently boiled over when several institutions refused to sign the Second Presidential Health Compact.

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

However, several business lobbies spoke out against the compact and announced their decision not to sign it.

This led to the President approaching Business Unity South Africa (BUSA) and requesting the organisation 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.  

The HFA said it regarded the meeting between Ramaphosa and BUSA’s leadership to discuss the NHI 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,” Comrie 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.”

Comrie said his concerns about the NHI Act centre around critical questions about the legislation’s constitutional validity, economic feasibility, and potential impact on both public and private healthcare sectors that remain unanswered.

While the President has repeatedly affirmed his belief that the NHI Act is constitutionally sound, he has declined to share specifics on how this conclusion was reached. 

“In response, the HFA will test various aspects of the NHI’s constitutionality, which is crucial for establishing a stable healthcare framework that delivers quality health services for all South Africans,” Comrie said.

“This is a critical juncture for politicians, policymakers and every South African who relies on the nation’s healthcare services – private and public sectors alike.” 

“Against this background, the HFA is seeking to strike a balance between much-needed healthcare reforms and the hard-hitting risks of the NHI Act that demand amendments.”

Comrie said one of the biggest concerns with the NHI Act lies in its constitutionality.

The legislation aligns with Section 27(1) of the Constitution, which guarantees the right to access healthcare services. 

However, Section 36 also stipulates that existing rights should not be compromised if alternative solutions are available. 

Comrie said this raises questions about the potential for alternative approaches to achieve universal health coverage without compromising individual freedoms.

One such alternative is increased collaboration between the public and private healthcare sectors. 

He pointed out that the private sector, particularly medical schemes, plays a significant role in funding healthcare services. 

“The Act, if left unchallenged in its current form, can be likened to letting the healthcare train run on a single track of public sector inefficiency,” he said. 

“By adding the private sector as a parallel track – both heading in the same direction towards universal healthcare coverage, we can stabilise and accelerate the journey.”

The NHI’s financial viability also remains a concern. The government’s proposed funding mechanism, relying on general taxes and mandatory payroll contributions, has faced criticism due to its potential economic burden on taxpayers. 

Comrie said the country’s high unemployment rate and sluggish economic growth further complicate the matter.

“Critics argue that increasing tax rates to fund the NHI could backfire, reducing overall tax revenue, as highlighted by the Laffer Curve, which suggests that higher taxes can lead to lower revenue if they exceed an optimal rate,” he said.

Another critical challenge is the shortage of healthcare professionals in South Africa. 

The country’s public healthcare sector is already struggling with high vacancy rates, and the NHI’s implementation could exacerbate this problem. 

South Africa is already facing a severe shortage of medical personnel, with the vacancy rate for doctors ranging from 22.4% in the Free State to 5.5% in the Western Cape, while the national average vacancy rate for nurses stands at 14.7%.

Addressing this shortage requires investing in training and education to increase the number of healthcare professionals and improve the quality of care.

Comrie said the NHI is not the only solution to South Africa’s healthcare challenges and is certainly not a panacea in its current form. 

“The government must take a more collaborative approach, engaging with all stakeholders, including the private healthcare sector, medical schemes and the general public,” he said.

“Open dialogue is crucial to finding sustainable solutions that work for everyone. Critical decisions must be made, and these should not be taken behind closed doors.” 

“The nation’s healthcare needs are too important to be dictated by a select few without broader consultation.”

He said the government has a constitutional obligation to ensure every South African has access to quality healthcare services. 

However, this must not come at the expense of freedom of choice, job losses and economic stability.