Yet another warning for the NHI in South Africa

South Africa’s largest private hospital service, Netcare, has maintained its view that the National Health Insurance (NHI) needs private sector involvement.

In its latest results for the six months ended 31 March 2025, Netcare highlighted the pressing need to address the deficiencies and inequities in South Africa’s healthcare access and delivery.

The group said it is well-positioned to support the government’s efforts to expand access to quality healthcare to all South Africans.

In May 2024, President Cyril Ramaphosa signed the National Health Insurance (NHI) Act into law.

Despite the ongoing legal challenges facing the law, the Minister of Health published the first draft of the regulations under the NHI Act in March and invited public comment over a three-month period.

Several stakeholders, including the Board of Healthcare Funders, the South African Private Practitioners Forum, and the South African Medical Association, have also initiated legal actions against the NHI Act.

“We believe that a collaborative partnership between the public and private sectors is essential to developing sustainable and affordable solutions that advance the goal of universal healthcare,” said Netcare.

“Netcare remains committed to constructive engagement and stands ready to work in partnership to meaningfully reform and strengthen South Africa’s health system.”

Netcare’s concerns join a chorus of warnings over the NHI, with many private healthcare experts and medical aids stating that the scheme is unworkable and unrealistic.

The scheme will have extreme implications for the medical scheme industry as it will place severe limitations on them.

Representatives from the private healthcare industry again appealed to the government to see reason at the recent annual Board of Healthcare Funders (BHF) conference.

The signing of the NHI was extremely controversial. The government seemingly pushed through the legislation while ignoring various inputs from the sectors affected by it.

The BHF won at the High Court, which ruled that Ramaphosa’s decision to sign the laws is open to review. The court also ordered the president to provide his reasoning for signing the law.

The president said he will appeal the judgement.

The BHF and other healthcare providers say the NHI is simply unworkable in its current state, and there are questions over how it will be funded.

Estimates show that the NHI would cost between R900 billion and R1.3 trillion, based on the assumption that the same level of private healthcare would be afforded to all South Africans.

The Department of Health has repeatedly refuted this figures, indicating that the NHI will not provide private-equivalent levels of healthcare.

Even more conservative estimates put the cost of the NHI as requiring an additional R250 billion a year to function.

Given the government’s failure to even pass through a one percentage point increase in VAT to raise a fraction of this, funding the NHI seems impossible.

Netcare results

Netcare’s results for the six-month period were relatively strong. Activity was influenced by the timing of Easter and the school holidays, which resulted in only a 1.1% increase in paid patient days.

Revenue grew by 5.3% for H1 2025. The emphasis on operational efficiencies, the realisation of enhanced digital benefits, and lower diesel costs contributed to its operating leverage, with operating profit for the period increasing by 10.7%.

As per its capital allocation strategy of returning excess cash to shareholders, the group also continued its share buyback program, acquiring 35.6 million ordinary shares.

For the financial year ending 15 May 2025, R604 million was used to repurchase 45.9 million ordinary shares at an average price of 1,310 cents per share.

The group also aims to provide 50% to 70% of adjusted headline earnings per share, with the interim dividend of 36.0 cents per share, representing 61.2% adjusted HEPS.