Businesses in South Africa send a warning to Ramaphosa

 ·5 Feb 2024

Business groups in South Africa are pushing president Cyril Ramaphosa to delay signing the National Health Insurance (NHI) Bill into law, saying that it does not pass constitutional muster and will likely lead to many legal and social troubles down the line.

In an open statement to Ramaphosa, Business Unity South Africa (BUSA) and Businesses for South Africa (B4SA) petitioned the president to first test the constitutionality of the NHI Bill before signing it into law.

The controversial NHI Bill was passed by the National Council of Provinces in late 2023 and sent on to President Cyril Ramaphosa to be signed into law. The office of the presidency said in December that Ramaphosa wouldn’t just rubber-stamp the bill into law and would apply his mind – however, during election campaigning, the president vowed to sign the bill into law whether critics wanted it or not.

BUSA and B4SA warned the president that doing so would spell disaster for not only the goal of universal healthcare in South Africa but also the country’s economy as a whole.

“The Bill, as it stands today, will materially delay access to universal health coverage, lead to disinvestment in the healthcare sector, further damage South Africa’s already fragile economy, and create significant risks for the country in terms of the availability, quality, management and governance of healthcare,” the groups said.

Martin Kingston, chair of the B4SA steering committee, said that it is clear that the NHI is a cornerstone of the ANC’s election campaigning but stressed that the obvious weaknesses in the bill would have “material negative implications” and “devastating consequences for the country and its people for generations to come”.

“There is a significant obligation on the President to ensure the Bill passes constitutional muster,” he said.

Business Leadership South Africa (BLSA) CEO, Busi Mavuso said that the NHI was being used as a political tool, choosing populism over practicality – and that the president signing it into law in its current format would simply be the start of all the litigation to block it.

“The president seems to feel that putting an unworkable law on the books would be an achievement – it will not be,” she said.

“A genuine and deep improvement in the health system would be – but the NHI Bill will do the opposite, by driving doctors and other medical staff out of the country and damaging the private healthcare sector without any improvement in the public system. Yet the president seems determined to drive it through.”

The constitutionality problem

BUSA and B4SA provided a summary of key procedural and substantive constitutional issues in the bill, which have been presented to the president:

Procedural issues

Procedurally, BUSA noted that Parliament’s socio-economic impact assessment process was inadequate, that the Nedlac process in respect of the Bill was not followed through, that public participation inputs were not properly considered, and that multiple constructive inputs from business and other stakeholders were ignored. 

“Parliament’s Portfolio Committee on Health also ignored an opinion by Parliamentary Legal Services, which highlighted several areas of the Bill that are unconstitutional,” the groups said.

Rush job

BUSA highlighted the fact that the process conducted by the NCOP Select Committee on Health and Social Services was rushed, inadequate in terms of its mandate, and that it failed to properly deal with reports submitted by the provinces. 

“Importantly, the NCOP Committee failed to incorporate amendments, provincial public submissions and technical flaws noted by several provinces and even the Department of Health itself,” the groups said.

Overreach galore

BUSA noted that section 33 is unconstitutional in giving the Health Minister unfettered power to determine the restricted role for medical schemes, especially as this power is unnecessary for achieving the policy objectives of the Bill. 

“This is damaging to the private health sector as a whole and there is no rational basis for this approach,” the groups said.

The Bill provides for the adding of new taxes and altering tax policies, tasks that should be handled by the National Treasury in a Money Bill as per the Constitution.

The Bill also breaches the separation of powers by giving the Minister of Health judicial discretion.

Bottlenecking healthcare

BUSA noted that the single-fund model (where the Government will buy and pay for all healthcare services for everyone) introduces significant concentration risk and adversely impacts people’s ability to seek care in the private sector. 

“This is also likely to result in significant strain being placed on the public sector.  The amendments proposed by BUSA seek to allow for the role of medical schemes to be determined in a consultative process, in measured phases, in a manner that is consistent with the policy objectives.”

Losing access

BUSA highlighted that the procedures for accessing healthcare and appealing treatment denied by the NHI, could potentially hinder or violate the right to access health services, making them unconstitutional. 

Pricing issues

BUSA believes that the contracting provisions in Sections 11 and 26 of the Bill are unsustainable and inconsistent with the principles of value-based care and strategic purchasing, which is the global trend for sustainable healthcare contracting that is patient-centred.

They focus on price in an unsophisticated manner, which contradicts the Constitution’s criteria for lawful procurement.

Vague timelines

The roll-out envisaged in Section 57 of the Bill needs to be linked to milestones that are workable and relevant to South Africans having reasonable access to quality healthcare services, rather than dates which are arbitrary and unrealistic, and already outdated. 

Section 58 of the Bill introduces legislative changes that seem to take immediate effect. However, this conflicts with Sections 31 and 32 of the Bill, leading to the immediate removal of health functions from the Provinces.

This affects approximately R196 billion in funding from Provincial Equitable Share allocations and Conditional Grants. Additionally, the alterations to the Medical Schemes Act contradict Section 33.

There are conflicts with the Competition Act and the Protection of Personal Information Act which are unnecessary to give effect to universal health care. 

BUSA and B4SA said that all of these constitutional and other issues with the bill were raised during the various engagements with government and parliamentary committees, but still the bill passed by unchanged.

They are now again being raised in the petition to the president.

“This is to ensure that, as part of due process, proper consideration is given to the fundamental procedural, and substantive constitutional flaws in the current version of the Bill,” the groups said.  

“BUSA and B4SA are confident that, in a constitutional democracy, these views will be taken into account by the President when he assesses the constitutionality of the Bill prior to his assent.”

Read: NHI Bill on the brink of being signed into law in South Africa

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