Why there’s no need to panic over the NHI bill: Discovery Health CEO

 ·14 Jun 2023

Ryan Noach, the CEO of Discovery Health, says that at this stage, there is no need to panic over the National Health Insurance Bill (NHI).

Speaking to Newzroom Afrika, Noach said that the belief that the NHI bill, which aims to provide universal public healthcare, would decimate private healthcare, is a panicked reaction.

He said there is still a long way to go until it affects private medical aid schemes.

According to the CEO, section 33 states:

“Once National Health Insurance has been fully implemented as determined by the Minister through regulation in the Gazette, medical schemes may only offer complementary cover to services not reimbursed by the fund.”

Ultimately, full implementation is expected to take between 10 and 15 years, said Noach.

Section 33 talks about the full implementation of the NHI before any impact on medical schemes, and according to the department, there are still 10 to 15 years before the NHI will be effectively introduced.

Noach said that it would take immense amounts of sophistication and funding before the bill is implemented efficiently in a way that could support roughly 60 million people’s healthcare.

“It’s a long time before it is a reality,” said Noach. “At this stage, there is no need to panic.”

This Wednesday (14 June), the NHI bill was passed by the National Assembly, completing another leg of the legislative process before it becomes law.

Broadly speaking, the bill aims to guarantee that every South African has access to high-quality healthcare services. It proposes the creation of a fund to cover the majority of medical treatments from authorised providers, with the state determining the rates.

Private insurers will only be permitted to cover expenses for products and services that are not included in the fund.

The bill has faced major backlash. Busi Mavuso, the CEO of Business Leadership South Africa (BLSA), said that it would spell the end of the private healthcare provision and leave people worse off.

“In my view, the NHI envisaged in the bill would leave all South Africans worse off in a system in which state provision becomes impossible and private health provision is effectively closed down,” said Mavuso.

“The system would impose a single-payer model in which government is the only buyer of healthcare services for its citizens. It would relegate the private health insurance market to only complementary healthcare that is not covered by the state scheme.”

“We have no reason to believe the quality of care it provides would be an improvement on the status quo,” she said.

Noach from Discovery Health said, however, that there are many unknowns around the bill and that it is likely to take a long time until it becomes a major concern to private healthcare schemes.

Biggest threat

Noach noted, however, that the brain drain of specialist medical professionals is the biggest threat the NHI poses to South Africa.

As far back as March 2022, concern has been growing over the possible exodus of doctors and other key medical personnel in light of the NHI Bill. With an already constrained and overworked healthcare system, this does not bode well for the country.

Noach said that a severe loss of capability in the market is the most impactful short-term risk. He said that in the medical industry, there is growing negative sentiment around the bill and what it means for professionals.

“We are seeing early signs of this; we are doing all we can to calm them; we do believe the outlook can look optimistic,” said Noach.

Unknown funding

One of the most significant unknowns regarding the bill is how the possible national medical aid scheme will be funded; rumours of an add-on tax have emerged; however, no authoritative detail has been provided.

The CEO of Discovery Health said that a money bill which traditionally accompanies bills that require immense funding is nowhere to be seen.

“Without that money bill, we do not know how it will be financed,” he said.

“There are broad references regarding taxes that every South Africa will have to pay or that the private sector and private sector combined contribute 8.5% to GDP, and this 8.5% will just be redirected into the national healthcare scheme.”

This is, however, not how it will work, said the CEO.

Noach further believes that there is no legal way for the government to tap into private-sector medical aid funding, as contributions made by members are voluntary and made after tax.

Private sector medical schemes function as holders of funds; tapping into such funds would be equivalent to the government tapping into a person’s pension, said Noach. This is unlikely as there is no legal mechanism to do so.

He added that the NHI bill and what it aims to achieve is ambitious; even when looking at first-world countries such as the United Kingdom, no nationalised healthcare system eradicates the private sector entirely.

Read: NHI bill passed by the National Assembly in South Africa

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