NHI not another Eskom – it will be ‘in safe hands’ with government: Health Minister

 ·14 Feb 2024

Health Minister Joe Phaahla has tried to downplay concerns over the National Health Insurance (NHI) – but his comments do not reflect the reality facing the public healthcare sector.

Last week, during the State of the Nation Address (SONA), President Cyril Ramaphosa said that he was “looking for a pen” to sign the National Health Insurance (NHI) into law after it was passed by the National Assembly and the National Council of Provinces last year.

Speaking at a SONA debate in parliament this week, Phaahla doubled down on the president’s willingness to see the controversial bill become law in the country, effectively shrugging off criticisms against it. These include worries from the private healthcare sector and those who believe the scheme will ultimately fall to government ineptitude.

Regarding the private sector, the minister said that the work between the private sector and government during the Covid-19 vaccination campaign had laid a solid foundation for implementing the Bill.

He said that the health sector has been on a strong recovery path since the end of the pandemic, with the Department pushing ahead to provide universal healthcare as per the Constitution.

He noted that fears that the government will be unable to manage nearly all healthcare in South Africa effectively are “overblown”.

“Those who fear that the NHI will become an SOE, some say it will be an Eskom, let me tell you this – you can ask the Auditor-General, in this last audit, all public health entities either got clean audits or got unqualified audits, without exception,” he said.

“So, we can assure you that the NHI will be safe in our hands.”

Contrary to the minister’s comments, though, the Auditor General’s report on national and provincial government performance assessment for the 2022/23 financial year – tabled in November 2023 – shows that Phaahla is being economical with the truth.

The AG’s report noted that a quarter of auditees in the year under review provided unreliable, incorrect or no evidence for the achievements they reported.

This included the National Department of Health, which had four disclaimed opinions and one outstanding audit out of 10. This is hardly “clean or unqualified audits, without exception,” as the minister posited.

Source: Auditor General of South Africa

In her report, the Auditor General specifically called out the health department, noting that “health facilities are not coping with the demand for health services, and the safety and security of citizens and businesses are under threat”.

“We reported material findings on the performance reports of most departments in the education, health and human settlements sectors, with most of the worst audit outcomes – adverse and disclaimed opinions or conclusions – being in education and health.”

Further to this, the minister’s comments should be seen in the context of the poor track record of the government managing multi-billion rand state-run companies.

Almost every single major national company run by the state – Eskom, Transnet, SAA, SA Post Office, Denel, and the SABC, among others – have collapsed or succumbed to corruption and financial mismanagement in some way.

This is on top of the prevailing healthcare, water, power, infrastructure and economic crises the government has also overseen. The basis for the NHI being in “safe hands” is glaringly thin.

Private sector irony

The minister’s response is also dripped in other ironies.

Despite the minister highlighting that the work with the private sector ensured a smooth rollout of the Covid-19 vaccination, the private sector has been one of the most vocal critics of the NHI due to its lack of involvement in the whole process.

Fundamentally, many believe that NHI in its current form is unworkable, with significant question marks over its funding.

Public healthcare spending is roughly R233 billion, with the government able to secure R28 billion more by redirecting medical aid tax credits to the NHI Fund while also being able to add a further R70 billion from government employees’ medical scheme subsidies.

The Department of Health estimates that it will need another R200 billion in funding, with increased taxes the only logical source of income.

Discovery Group CEO Adrian Gore said that even if taxpayers are happy to foot an estimated 30% tax increase, the NHI could only land to around R715 per person per month when split among South Africa’s population of 62 million people.

Although this is an increase from R400 per month for those not covered by medical aids, it drops substantially from R2,332 a month for those on medical schemes – a 70% reduction in health coverage.

Not much to worry about

Despite the fears of the NHI, experts in the private sector also believe that people should not worry about the Bill in its current form.

Efficient Wealth said that Rampahosa and the ANC would likely use the NHI as an electioneering tool before news around it dies out following the elections.

Even if the Bill is signed into law, the current version will also face an onslaught of legal battles, meaning that the Bill, in its current form, will not see the light of day.

Amid the question marks over the funding, Sage also believes that the implementation of the NHI will be delayed.

Sage said that the government would fear introducing new payroll taxes for South Africans who are already cash-strapped, while also not wanting to add any further strain on an already strained public healthcare system as South Africans cancel their medical aid membership for the NHI.

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