The twisted ‘good’ news about the NHI

 ·20 May 2024

President Cyril Ramaphosa’s disregard for input from the private sector regarding South Africa’s National Health Insurance (NHI) has resulted in a completely unworkable system being made law—which is a twisted sort of good news for the Act’s opponents, as the scheme is unlikely to actually materialise.

This is according to Business Leadership South Africa (BLSA) CEO Busi Mavuso, who described the move by Ramaphosa to sign the law as destructive and a serious threat to businesses in the healthcare sector.

Mavuso described the government’s actions around the NHI as “schizophrenic”, where the state expects businesses to join hand-in-hand with departments and politicians to lend their expertise and resources to solve state-led crises in electricity, logistics and crime, but then with the other hand bring the axe down on private healthcare.

“Instead of yoking the best of public and private, (the NHI) poses a major threat to the private sector as it stands,” she said.

“Despite significant objections from the private sector, ranging from healthcare practitioners to medical aids, the president has chosen to ignore the many recommendations that would have improved the workability of a national health insurance scheme.”

Mavuso said that the NHI is the complete opposite of the positive strides made in the electricity sector, by establishing a single-buyer model and state monopoly to boot, completely disregarding “the demonstrated success of competitive markets in providing services”.

“The Bill is a huge blow to professionals working in the private sector who must now consider their options for their futures. Our ability to attract global skills depends on having access to quality medical services for their families,” she said.

“Our ambitions of becoming a regional hub for business across the continent is now seriously threatened. If you were looking to set up a new business with a choice between South Africa’s cities and competitors like Mauritius, Nairobi or Gaborone, where would you go?”

The ‘positive’ twist

However, there is some sort of “good” news hidden in the mess, Mavuso said: the legislation is unworkable.

Because there is simply no funding for it, and it will face legal challenges to how the laws were drawn up and processed as well as on Constitutional grounds, the prospect of the system coming into effect isn’t even on the horizon.

“Even on its own timeline, full implementation is only going to happen after 2032/33. While it is scant assurance, I hope our healthcare professionals, as well as the many medical scheme members who depend on them, will remain committed to the existing system,” the CEO said.

According to Investec investment strategist Osagyefo Mazwai, the initial timeline set out by the Department of Health for the full implementation of the NHI Bill in 2012, according to then-health minister Dr Aaron Motsoaledi, was around 15 years for three phases.

“Even under the assumption that the legislation is not challenged in court, it is unlikely to be rolled out soon,” Mazwai said.

“In an interview in 2022, Dr Nicholas Crisp, deputy director general at the Department of Health said ‘anything between 14 and 20 years would be a good time’. Our view is that it will probably take longer.”

Japan took 34 years to implement its equivalent, while other countries took even longer.

“Even if South Africa can learn from the rollout in other countries and accelerate progress, implementation will likely not happen anytime soon,” he said.

Mavuso said that the true tragedy of the NHI is that there are ways to deliver universal healthcare that are feasible, which business strongly supports – but instead of opting for something that is workable and supported, Ramaphosa’s government has chosen the path of maximum resistance.

“The (NHI) legislation is in every way counterproductive – it will damage both the private and public healthcare systems while missing an opportunity to actually deliver improved healthcare for everyone,” Mavusoi said.

Read: Discovery clarifies what the new NHI means for medical aid members in South Africa

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