7 big questions the NHI bill leaves unanswered

 ·12 Aug 2019

The National Health Insurance bill published on Thursday (8 August) fails to answer a number of key questions around universal health coverage.

According to the Institute for Race Relations, these issues include the final costs of the system, and exactly which benefits will be covered.

“The main purpose of the NHI bill is to establish the NHI fund and its nine sub-units, allow the appointment of a host of advisory committees to help guide the Fund, and introduce a state-controlled Appeals Tribunal to decide on people’s complaints against the fund,” it said.

“But neither the bill nor its explanatory memorandum answers any of the key questions about the NHI.”

Below it outlined some of the key issues that have not been adequately addressed by the bill:

1. What NHI will cost?

The IRR noted that current costs for healthcare in South Africa is over R450 billion, based on both public and private healthcare spending – for true universal healthcare, costs could at least amount to that.

Original estimates for the cost of the scheme were put at R256 billion a year – however it is now up to National Treasury to determine the true costs. For now, it’s unknown.

2. How will it be financed?

While the bill has earmarked payroll and other taxes to be levied in time, it would be on an already overburdened tax base, the IRR noted.

Beyond the broad plans, there were no specifics about when these taxes will come, or how big they would be. The NHI director general noted that the taxes would only be a ‘late game’ addition to the funding, once the scheme was close to full implementation.

3. What benefits will it cover?

The NHI Bill does not go into the specifics on what will be covered. This is because coverage under the NHI is expected to evolve over time. For now, all we know is that coverage is to be “bureaucratically decided” at some point, the IRR said.

4. How will the supply of healthcare services be increased to match demand?

The IRR noted that the scheme faces a supply/demand problem with many public facilities not qualifying to participate in the scheme, and private healthcare practitioners may opt to rather emigrate.

Assessments of the NHI trials have already revealed some major issues at some state hospitals in the early testing stages for the scheme – while the issue of healthcare workers willing to leave and actively leaving the country ahead of the system is well-reported.

5. How will the enormous administrative burden be met?

The state has an extremely poor track record when it comes to fiscal management and running state companies.

While the NHI is not a state owned entity, it still follows similar structures – and will be bigger than Eskom in fiscal scale, which carries with it much bigger risk.

The IRR highlighted the problem of cadre deployment and inept leaders (and a general lack of skills to manage the scheme) as something that needs to be addressed.

6. How will corruption be curbed?

South African state institutions already face major problems with inflated prices tainting up to 40% of procurement, the IRR said. With the NHI and procurement falling to one person (or at least on department), this opens up the whole scheme to corruption.

The Department of Health has only said that it ‘stands ready’ to combat any corrupt activities related to the scheme.

7. Why are medical schemes being so drastically limited?

The role of medical aids under the NHI is one of the biggest sticking points. Under the NHI, medical aids are not allowed to cover the same services that are covered by the NHI, which will ultimately limit consumers’ choice in where to receive healthcare.

The IRR argues that this will limit the possible membership pool of private medical aids, and end with the result of making these schemes completely unaffordable to all but the very rich.

Under the NHI, the State will control every aspect of healthcare, the IRR said.

“This means the State will decide on the healthcare services to be covered; the fees to be paid to doctors, specialists, and other providers; the medicines to be prescribed; the blood tests to be allowed; the medical equipment to be used; the health technologies to be permitted; and the prices to be paid for every item, from aspirins and ARVs to sutures and CAT scanners.

“The government claims these controls will be effective in cutting costs and enhancing quality. But the huge bureaucracy needed to implement them will be costly in itself – while pervasive regulation will also stifle innovation, reduce efficiency, and promote corruption.”

Read: New NHI bill will change which hospitals you can use

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