9 massive problems with government’s NHI plans – which still need to be addressed before the end of the year

Government plans to move forward with the implementation and establishment of a National Health Insurance Scheme (NHI) in South Africa – with phase two of the scheme scheduled to begin in 2022.

However, there is a glaring lack of clarity around the roadmap for the scheme – and a legal minefield covering the current processes, says legal firm Werksmans Attorneys.

According to the firm, the processes are divided into two phases, with phase one setting out certain objectives that have to be met on or before 31 December 2021.

Primarily, the objectives of phase one are concerned with the structuring of certain components of the National Health Insurance Scheme, which are arguably designed to create the foundation of the scheme.

However, confusingly, a number of the objectives in this phase require the bill to first be signed into law, and many of the exact processes and their definitions in other objective remain vague.

Werksmans highlighted some of the main objectives that need to be completed under phase one – as well as the key issues they face.


1. Migration of hospitals 

Under the first phase of the scheme, central hospitals that are currently funded, governed and managed nationally need to be migrated to so-called ‘semi-autonomous entities’.

However, Werksmans said that the term “semi-autonomous entities” is not defined in the bill and the precise intended status of central hospitals is therefore largely unknown.


2. Structuring of contracting unit 

A contracting unit for primary healthcare needs to be structured ‘in a co-operative management arrangement’, with the relevant hospitals linked to a number of primary healthcare facilities.

However, the precise terms and conditions of a ‘co-operative management arrangement’ are not detailed in the bill at all.


3. Establishment of NHI Fund 

Phase one calls for the establishment of the National Health Insurance Fund and its various governance structures.

Werksmans said that the National Health Insurance Fund is to be established in terms of clause 9 of the bill which, in turn, contemplates that, in order for the fund to be established, the bill will have to become effective legislation – which is not one of the objectives contemplated during the course of phase one.


4. Registration system 

A Health Patient Registration System needs to be established as contemplated in clause 5 of the bill.

Werksmans said that, like the fund itself, this objective requires clause 5 of the bill enacted into law in order for its provisions to take effect legally and for the proposed registration system to be established in accordance with the principles of legality that emerge from the Constitution of the Republic of South Africa and various pronouncements by the Constitutional Court.


5. Accreditation

An accreditation process for healthcare providers, which provide services to users, needs to be set up. This includes the inspection and certification of health establishments by the office of health standards compliance.

“Again, the process for accreditation of both health establishments and healthcare providers, for purposes of providing services to users of the fund, is a feature of the bill that will be required to become effective law in order for the particular objective to be achieved,” Werksmans said.


6. Purchasing of services 

The purchasing of healthcare services benefits by the fund is expected to start under phase one, but there is no comprehensive list of such services.

Services are broadly described in the bill as both primary healthcare services and hospital services as well as other clinical support services, and include:

  • General practitioners;
  • Audiologists;
  • Oral health practitioners;
  • Optometrists;
  • Speech therapists;

Other designated providers at a primary healthcare level are also vague – like providers “focusing on disease prevention, health promotion, provision of primary healthcare services and addressing critical backlogs”.


7. Legislation amended 

Various pieces of legislation are expected to be amended to make room for the NHI and the bill.

These pieces of legislation, which are all still currently in effect, are complex and include legislation such as the Medical Schemes Act, the Traditional Health Practitioners Act, and the Medicines and Related Substances as amended.


8. Payment

“Of interest and importance to potential users of the National Health Insurance Scheme is clause 57(5) that contemplates that the objectives that are to be achieved in phase two – which is described as operating from 2022 to 2026 – must be achieved on the basis of a system of mandatory pre-payment,” said Werksmans.

The firm said that it is unclear from the provisions of the bill when a system of mandatory pre-payment by users will actually be implemented – also bearing in mind that the term “mandatory prepayment” is not defined in the bill, either.

Presumably, in order to achieve the particular objectives included in phase two, a system of mandatory prepayment may have to be introduced sooner rather than later, in order to secure the requisite funds prior to the commencement of phase two on 1 January 2022, Werksmans said.


9. Phase 2

Werksmans noted that the actual roadmap for phase one and two is vague, and makes no mention of consequences or next steps if the timelines fall through.

The bill is largely silent on when the particular steps are to be taken and also make no mention of the consequences of missing these deadlines, should the time periods stipulated for phases one and two not be met as a result of various external factors, it said.

This includes factors like the “prevailing pressure on the Department of Health in order to deal with the Covid-19 pandemic, and a successful rollout of an appropriate vaccination program for the entire country.”


Can’t be rushed

Werksmans said that South Africans should be keenly watching the developments that occur to achieve the objectives of phase one ahead of the commencement of phase two during the course of next year.

“However, there are many i’s to be dotted and t’s to be crossed, from a legal perspective, in order for the bill to become law – more particularly, a law that is consistent with existing pieces of healthcare legislation.

More importantly, the law needs to be consistent with the legality provisions imposed by the Constitution of the Republic of South Africa, 1996, the firm said.

“A process that, within and of itself, cannot be rushed nor manipulated no matter how laudable the objectives of the bill may be,” it said.

Commentary by Neil Kirby (director) and Helen Michael (director) at Werksmans Attorneys.


Read: South Africa’s shrinking tax base is too strained to fund the NHI: experts

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9 massive problems with government’s NHI plans – which still need to be addressed before the end of the year