NHI bills seek to create giant healthcare state-owned entity

27 June 2018

The gazetting of the National Health Insurance and the Medical Schemes Amendment bills for public comment on 21 June finally revealed the legal framework that the government will employ to create a single healthcare service, funded by consolidating revenue.

While the DA acknowledges and affirms the need for universal healthcare, we do not believe the proposed bills provide a workable model to achieve it. Worse still, we believe the bills are little more than an attempt by the ANC government to co-opt private sector healthcare and its clients to remedy the rapidly failing public sector healthcare. Sadly, it will prove fatal for both.

The NHI pilot projects have failed abysmally already. If a pilot project is unsuccessful, there is no chance that it will be successful nationally.

Indeed, the proposed creation of a single National Health Insurance Fund is little more than the creation of another enormous state-owned entity (SOE). This is greatly concerning considering the government’s dismal performance in managing SOEs and its equally dismal performance in providing healthcare.

The NHI Fund will dwarf the Compensation Fund, an entity of the Department of Labour tasked with providing compensation to those who suffered workplace injuries, which is notoriously slow to pay out and, as a consequence, is largely shunned by medical practitioners.

It will also be larger than the Road Accident Fund which, due to chronic mismanagement, is practically bankrupt with close to R190 billion in contingent liabilities and recorded losses of R34 billion in the 2016/17 financial year alone.

Having studied the bills, the DA was left with many concerns, including questions over financial viability; the risk of a medical skills drain; the massive potential for institutionalised corruption; the absence of a plan to address the already failing public healthcare service; and the lack of adequate public participation in decision-making.

Financial Viability

Minister of Health, Aaron Motsoaledi, has already admitted that the cost of NHI is unknown. The White Paper on NHI, published in 2017, used a 2010 expenditure figure of R256 billion projected for 2025. This figure was under-researched at the time and is now woefully outdated. The Davis Tax Committee indicated in 2017 that the NHI would be impossible to implement without significant economic growth. Meanwhile, Gross Domestic Product (GDP) growth figures for the first quarter of 2018 showed that the economy contracted by 2.2% - the highest quarter-on-quarter contraction in almost a decade.

Although cross-subsidisation is a well-established principle, the NHI threatens to further burden taxpayers now tasked with supporting those who are not capable of making an equal contribution.

The Medical Skill Drain

The biggest reason cited by doctors leaving South Africa’s public sector is the generally poor working conditions in public institutions. South Africa already suffers from an atrocious public doctor-patient ratio, and it we can ill-afford a similar exodus of medical professionals from the private sector, especially those in specialised fields. Many medical organisations have already indicated that they believe that NHI will affect them negatively and some have already indicated that they will leave South Africa if NHI is implemented, which South Africa cannot afford.

The NHI and Medical Schemes Amendment bills propose price controls in the private sector, including a national price list which will punish those medical professionals who do not follow the prescribed pricing list. Considering that government will be the largest purchaser of healthcare services, allowing it to set the tariffs as well is preposterous.

Institutionalised Corruption

It is ironic that the NHI and Medical Schemes Amendment bills have been gazetted precisely at the same time as the Special Investigative Unit (SUI) report revealed the scope of corruption in the Gauteng Health Department. The report places the former Health MEC and current ANC chief whip in the Gauteng Legislature at the centre of a R1.2 billion corruption scandal which crippled the provincial health department and contributed to the ill-fated decision, in 2015, to relocate almost 2,000 state-funded mental health patients from Life Esidimeni facilities to poorly-equipped NGOs. At least 144 patients died in the worst public health disaster of our time.

Institutionalised corruption is already a feature of public healthcare in South Africa. With the NHI proposing to make the state the sole purchaser and financier of health services in the country, the potential for corruption is boundless and terrifying. It has become clear that government is incapable of exercising any control over the wanton maladministration that is rife in the South African public healthcare. If the NHI is implemented and the budget increased by hundreds of billions of rand, institutionalised corruption is sure to spread to the entire South African health system.

Addressing our Failing Public Service

The DA’s recent #Hospitalhealthcheck campaign where we visited various healthcare institutions across the country again exposed the horrible conditions everyday citizens are exposed to. The facilities have been grossly mismanaged and are persistently hampered by broken equipment, medicine shortages and insufficient numbers of staff. A mere 6% of public health facilities passed their inspections on criteria ranging from drug availability to infection control. An Office of Health Standards Compliance report indicated that only five out of 696 inspected facilities in Gauteng achieved over 80% compliance with the nationally set norms and standards. This must be considered with South Africa’s doctor-patient ratio of 0.8 per 1,000, which is the worst of all BRICS nations. The Minister has failed to indicate how the current deteriorating healthcare system will be improved to fulfil the NHI’s mandate.

The Lack of Adequate Public Participation, Openness and Transparency 

The NHI Bill creates a number of Ministerial Committees who aid in the establishment and management of the National Health Insurance Fund. The ‘Benefits Advisory Committee’, as established by section 25 of the Bill, is tasked with determining and reviewing health service benefits and types of services to be reimbursed at each level of care at primary health care facilities and hospitals. However, this body fails to include representatives from civil society or labour that may aid in meaningful and effective decision-making.

The Bill also does not seem to make room for adequate and meaningful public participation in the numerous of Committees it seeks to establish. Additionally, the proceedings in these Committees should be open in order to guarantee transparency, accountability and good governance.

The DA’s plan

The DA has launched our plan for universal healthcare in South Africa, which we have titled Our Health Plan (OHP)  We believe our offer is the most credible and workable option that seeks to ensure that no person is denied quality healthcare because they are poor.

For South Africans who have no medical aid, these reforms will herald improved service at clinics and hospitals, enhanced maternal and child care provision and access to efficient emergency services in urban and rural areas, free at the point of service.

For South Africans who are on medical aid, the universal health subsidy will result in the reduction of their medical aid contributions, enhanced choice and access to more efficient ambulance services, free at the point of service.

The DA’s mission as a national government-in-waiting is to guarantee universal health care for all South Africans.

Our Health Plan includes:

Faster delivery: Our Health Plan will provide quality healthcare to all within 5-8 years, whereas NHI will take up to 15 years to fully implement;

Affordability: Our Health Plan will provide quality healthcare which is affordable, and can be implemented using our current health budget. This would mean that medical aid contributions would no longer be tax deductible. The additional revenue would go to reducing the costs of medical aid;

Fairness: by bringing the medical aid tax credit on budget, and allocating some of it to build better services in the public health sector, those with medical aid are cross-subsidising those without, an act of health justice; and

Accountability: implementation of localised accountability systems to hospitals and district health authorities, as well as decentralises decision-making.

Unlike the failed NHI pilot projects, many of the aspects of Our Health Plan have successfully been implemented in the Western Cape, and the results speak for themselves. This includes structural changes to the health care system such as the extend and adopt nationally the Western Cape’s system of decentralising district level and facility management systems.

The DA-run Western Cape has a proven track-record of delivering better health care than any other province in South Africa:

The Western Cape Department of Health has a 13-year record of unqualified audits - clean and accountable governance is crucial and reinforces public trust;

The maternal mortality rate in South Africa is 153 deaths per 100 000 live births, while the rate for the Western Cape is almost half that, at 84;

Life expectancy the Western Cape has increased over the past 15 years and the province boasts the highest life expectancy in the country.

Universal healthcare is achievable in South Africa, but the National Health Insurance and the Medical Schemes Amendment bills will not achieve it. Rather, a failed attempt at rolling out NHI will put us back even further.

The DA looks forward to interrogating the bills further and presenting our views in the Portfolio Committee on Health.

Issued by Patricia Kopane, DA Shadow Minister of Health, 27 June 2018