Judge’s order strikes down law needed to implement NHI!

24 October 2022

In June 2022, the Pretoria High Court declared the certificate-of-need (CON) provisions in the 2003 National Health Act to be invalid. Although this matter has received little attention in the press, the implications are far reaching for government’s proposed health reforms.

The Act’s CON provisions have been on the table for many years and have enjoyed a colourful history of ups and downs, but they remain critical for the success of the government’s contentious National Health Insurance (NHI) proposal.

The Act’s CON provisions prescribe very wide-ranging powers – without one no doctor may practice medicine and no-one may establish or operate a private hospital, let alone even alter one or acquire new health technology or equipment.

The issuing of a CON was to be at the discretion of Director-General (DG) of the health department, who was required, according to the Act, to consider an appropriate mix of public and private services, the equitable distribution and rationalisation of healthcare resources, population demographics and the impact on existing health services.

The provisions even went so far as to state that the DG could issue a CON subject to “any condition”!

These proposals would give far-reaching and autocratic powers, that look awfully like the failed central planning strategies deployed by many socialist regimes. Subsequently, trade union Solidarity and several healthcare associations dialled up their lawyers in mid-2021.

History of the CON

The history of the Act’s provisions requiring CONs has been a messy affair.

Going back to March 2014, then President Zuma issued a proclamation declaring that the Act’s CON provisions would come into operation on 1 April that year. But when the Dental Association highlighted to an embarrassed government that they had not published the enabling regulations, the government quickly applied to the Constitutional Court to have the President’s proclamation set aside, saying it was unintended, had been issued on mistaken departmental advice and was thus irrational. The apex court agreed and set it aside.

Fast forward to June 2021, the Minister of Health gazetted draft CON regulations for comment, adding further to the original provisions outlined above that a CON may only be issued if “in the public interest.”

By late 2021, Solidarity and other associations representing healthcare practitioners had filed an application in the Pretoria high court, arguing that the CON provisions in the National Health Act itself – not merely the draft regulations – were unconstitutional.

Their application called on the Minister of Health, the DG and the President to answer the claim, and was duly served and emailed to these three. In January 2022 the applicants’ attorney sent the State Attorney an email enquiring if the state intended to oppose their application, since no opposing papers had yet been filed with the court. The emails were read but not responded to.

Unaccountably, these bureaucrats, despite any doubt of being aware of the proceedings, did not oppose the application. This failure was roundly criticised by acting judge Thembi Bokako in her written grounds for decision, which found that the Act’s provisions infringed, not just one or two, but six constitutional rights, namely:

The right to have one’s dignity respected, by overriding work choices.

The right to freedom of movement, by compelling people to work in places against their choice.

The right to choose one’s occupation freely.

The right against arbitrary deprivations of property, since refusal to renew a CON would leave a health establishment with property and equipment that it cannot use.

The right against expropriation without compensation since the CON provisions authorise the private sector to share their human resources and facilities with the public sector.

The right to access healthcare services, by not safeguarding existing access. The state’s obligation to achieve progressive realisation of the right to access healthcare services cannot be met by depriving those who currently enjoy such rights.

It can hardly be rational to proclaim to increase healthcare access but then promulgate legislation that operates against that purpose. It was open to the state to put forward evidence to show why the severe limitations on constitutional rights are apparently justifiable, but the state decided not to participate in the proceedings.

Constitutional Court confirmation

Although the acting judge declared the National Health Act’s CON provisions to be invalid in their entirety and to be consequently severed from the Act, her ruling must be confirmed by the Constitutional Court.

A Department of Health spokesman highlighted the serious implications of her ruling for the National Health Insurance (NHI) Bill currently before Parliament, saying that the ruling would make it difficult for the government to decide where doctors practise. The Department would seek to overturn the judgment in the Constitutional Court.

Importantly, Constitutional Court rules stipulate that appeals against a High Court order declaring statutory provisions to be constitutionally invalid must be lodged with the Constitutional Court’s registrar within 15 days. It is unclear, despite search of Constitutional Court records, if such an appeal was lodged in time.

If not, the Department will have to seek condonation for its delay – but the Constitutional Court stresses that condonation cannot be had for the mere asking and appellants must show sufficient cause entitling them to the court’s indulgence. This requires them to give an explanation reasonable enough to excuse the default.

Where to from here?

The government has made a right royal and self-inflicted mess of the legal processes around implementing the CON, which it knows full well it requires to implement the NHI. But more importantly, acting Judge Bokako’s harsh ruling on the lack of constitutionality of the CON provisions bode well for a legal challenge against the ill-conceived NHI proposal.

The Constitutional Court’s next quarterly term commences on 1 November 2022, and it will be an intriguing chapter in this saga as to whether that Court confirms Judge Bokako’s ruling or whether it allows the government to appeal the ruling.

The success or failure of the ideological NHI policy pivots on this outcome.

Gary Moore is a Senior Consultant at the Free Market Foundation. He was a practising attorney in Johannesburg for 30 years. He is the author of published articles and monographs about the rule of law, the legality of state action, the meaning of statutes, and laws affecting small business. The views expressed in the article are the author’s and not necessarily shared by the members of the Foundation.