NHI – From a (sort of) layman’s perspective

Roger Schärges
Senor Onboarding Consultant

 

 

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NHI – From a (sort of) layman’s perspective

I remember the first time I heard about the proposed National Health Insurance (NHI).  It was 23 years ago and I had just joined the financial services industry. 

At that time in 2001, the first proposals for NHI had been tabled, and Thabo Mbeki was president.  HIV was being managed by doses of garlic and sweet potatoes, and South Africa was entering a property boom that would lead us into a period of prosperity unprecedented in the South African investment environment.  Little did we know at this time what the next decade would bring us…

 

As regards the experts in the medical aid and financial services industries, who, advising on the proposed NHI, informed us (in the early 2000’s) that there were still lots of discussions in the halls of legislature before a bill would ever be tabled.  NHI pretty much became a forgotten thing, with the only the odd regulatory or legal muttering from time to time.

As has been substantially documented, the 2010’s and the era of Zuma and the Guptas led to a period of mass corruption across almost all organs of state, with national healthcare structures not escaping this hollowing-out or ‘white-anting’ as it became know.  It’s probably not fair to blame only Zuma for the national healthcare system’s near collapse, as there were signs, particularly in the Eastern Cape, that State Healthcare corruption had been endemic since the late 90’s. 

As HIV and TB placed a further burden on state health coffers, and tax revenues started to falter due to State Capture and maladministration, it became evident that something needed to be done to rectify the situation, and the plans for an NHI bill were dusted off.

Fast forward twenty odd years to the beginning of 2024, an election year, with the ANC already projected to lose the majority vote for the first time since 1994.  With what can be viewed as more of an election tactic than a government policy decision, the NHI bill was signed by President Cyril Ramaphosa just before elections.

The common (business forum) opinion is that the bill is fundamentally flawed, with several sections being considered unconstitutional.  It has been suggested by knowledgeable people in the private medical aid sector that there will be constitutional court challenges and ‘panel beating’ for several years to come – perhaps even decades – before there is a NHI bill capable of being implemented. 

The populist thinking (or is it rhetoric?), is that the funds being paid into private medical cover by private individuals could be better distributed for the benefit of all, by being paid into the NHI, thereby providing additional funds to provide a better quality of service overall for everyone, rich and poor alike.  The voices of ‘those who have little’ are louder and more strident than the calls from the ‘those who have’ minority, even though the funding for this initiative will need to come from the ‘those who have’ minority. 

There is already a State healthcare system in place, though for various reasons already noted, this is not operating properly and is not addressing the needs of the intended constituency.  Will a NHI achieve the desired turnaround? 

From a theoretical perspective, universal healthcare in modern society should be a basic human right.  A healthy country means healthier citizens and greater economic achievements and happy people and stable governments and reduced healthcare costs… doesn’t it? 

NHI (in one form or another) has been tried and used elsewhere, with varying degrees of success.  The onus of where the money comes from might change from country to country, but the money ultimately has to come from somewhere. Socialist biased countries seemingly provide cheap or free services for their citizens.  Almost always these same countries have a wide base of tax payers.  The benefits provided aren’t free, it’s merely the (successful) use of collective monies that changes.  

The service isn’t free.  South Africa falls short of many of the requirements required for a socialist benefit program including the scale of the tax base, and the institutional ability to manage these proceeds responsibly.  Uruguay, for example, runs a successful national health scheme, though in reality this is more akin to South Africa’s existing private care and State healthcare.  The state portion of the Uruguay scheme cares for less than 40% of the population whilst privately funded healthcare caters for the remaining 60%.  

Some countries have successfully developed a hybrid system – the UK and Australia both have basic universal healthcare for all, with the option to pay extra monthly for private healthcare over and above the national health systems.  But a word of caution – the NHS in the UK is the largest employer in the country, implying that South Africa’s NHI, once implemented, could very easily become an unwieldy behemoth, employing a bloated civil service, without any apparent means to fund this additional salary bill.  Those with exposure to the UK’s NHS will attest to it being cumbersome, difficult to be seen by a doctor or diagnosed, and even longer to wait for procedures. 

 

Notwithstanding all of the above, it is a moral imperative to ensure that every South African citizen is able to access a certain standard of healthcare, in the same way that they should have access to a certain standard of education, water, housing and safety. 

The success of what might seem an insurmountable goal is the effective execution and management of resources, and the establishment of realistically attained objectives.  It’s usually at this point that there’s a big divide between those with private medical aid and those without.  Private medical aid members might argue that there is already a double tax for them, as their tax payments to the fiscus are supposed to be effectively apportioned by government to the various organs of state, including healthcare.  These same members will be required to be the backbone of a NHI, as it’s currently conceived.  Without them, both private healthcare and that afforded by the State will fail.  

Just as a business, or indeed a family household, needs to constrain their expenses (and expectations) in accordance with their income, so too must a country.  Whether it’s the five additional nuclear power stations mooted or a national health insurance scheme, fiscal responsibility and realistic scenario planning needs to prevail.  The geese laying the eggs (golden or otherwise) must be cared for and not just eaten.