On Tuesday, June 13, South Africa’s National Assembly approved the National Health Insurance (NHI) Bill, signing this new law into effect in the face of strong expert objections. The CEO of Discovery Health, Dr Ryan Noach, said that at the moment there is “no need to panic” over NHI, although overwhelming negativity was a major concern. . This was reflected in Quicknews polls results, with 98% of respondents expressing skepticism over NHI implementation.
Speaking in an interview with Newzroom Afrika, he responded to comments that the implementation of the NHI would devastate the private healthcare sector, which he said “sounds like a panicky reaction”.
While he did not say that NHI implementation would be without consequences, the chief executive of the country’s largest private medical scheme reminded viewers that, even with NHI as promulgated now, there was still a long way to go before there was any impact on private healthcare schemes or systems.
Health Minister Dr Joe Phaahla hailed the Bill: “This is one of the most revolutionary pieces of legislation presented to this house since the dawn of our democracy in 1994.” Briefing the media, he was bullish on existing issues of corruption and mis management in healthcare, saying “Those issues must be dealt with.” He pointed to a number of “good examples” of institutions.
But serious questions about the impact, implementation and feasibility of the extraordinarily expensive and far-reaching Bill have yet to be answered.
The impact of Section 33
Dr Noach noted that one important point regarding the Bill is Section 33, which “talks about the full implementation of NHI before any impact on medical schemes.” Essentially, the NHI would have to be fully in place before the healthcare and health insurance sectors would be affected.
He added that the Department of Health’s expected that NHI would take some 10 to 15 years to fully implement after its promulgation. Speaking with the experience of a scheme that provides for 4 million people, he said that it is already a huge amount of work, and the task of catering to the entire population of South Africa would be even greater.
Dr Noach notes that as for the necessary financing bill for the NHI, it is nowhere to be seen. Little said about it by the Treasury, which has only noted that it is “nascent”. As the population contributes GDP of 8.5% to healthcare, the assumption seems to be that this 8.5% would simply be redirected into a NHI scheme, which is not likely to happen.
Medical funds are contributed from medical schemes after tax, are well-protected by schemes, and as trust funds they essentially belong to the members. By law no-one can take away access to those funds: it would be like taking away people’s pension funds.
No parallel with any other country’s public health scheme
This singular NHI fund would essentially be a monopoly, and there were also no other examples of this to be found anywhere in the world. Even with the UK’s NHS, 12% of the population opts for private medical insurance. No other countries exclude by law the participation of private insurance and private funders. The annual spend would be R500bn to R700bn, and the NHI would disburse this to about 100 000 healthcare providers – assuming that the healthcare market would remain in its present form, which would likely suffer.
The biggest short term risk of the Bill would be the emigration of skilled healthcare professionals from a very negative sentiment emerging among in that grouping.
Meanwhile, those working in the public sector are battling under corruption and a lack resources while those in the private sector are extremely concerned. According to a Quicknews poll which ran for the month of June, 97.78% of the 90 respondents agreed with the South African Medical Association’s objections to the Bill.
In early 2022, a Quicknews poll had found that 81% of respondents had either considered emigrating due to the NHI Bill or were actively planning to do so.
Dr Noach says that “we are doing everything we can to calm the health professionals, partner them and work with them and reassure them, because we do believe that the outcome here could be optimistic.” A version of NHI would be welcomed.
As for the eventual fate of medical aid scheme under Section 33, once the Minister determines that NHI is fully implemented (and it is unclear how that would be determined), only those services not covered by NHI would be covered by medical aid schemes – though there is no indication at this stage of what would be covered.
An alternative approach to NHI
Before this can even be implemented, the government needs to find R200 billion to fix the public healthcare system, something which Dr Noach applauds as a priority.
He described an alternative NHI, with policy reform one in both private and public healthcare to create a “multi-funded environment”, something which Discovery’s actuarial work had found to be a better fiscal option. The NHI has many favourable qualities, which are smart and feasible, he continued.
The current monopolistic approach to NHI would create a single pot of money which would be the largest fund in the country by far – with its attendant risks.
Notes: Updated to reflect latest Quicknews poll results and to include Dr Joe Phaahla’s comments on the Bill.
IF THE FULL IMPLEMENTATION IS ABOUT TO HAPPEN IN 15YEARS TIME, FIRST DO SOMETHING CONSTRUCTIVE TO THE PUBLIC HEALTH SYSTEM WHICH SHOWS TO THE SOUTH AFRICAN PUBLICT HAT THERE IS IN THE GOVERMENTS INTENTION FOR THE NHI TO WORK , MERIT.
ALL WE HEAR IS , YES IT WILL WORK , BUT ON GROUND LEVEL EVERY PUBLIC CLINIC IS DETERIORATING.
START REBUILDING FROM BASICS, THIS MIGHT , JUST MIGHT GIVE HOPE THAT NHI CAN WORK
ELSE EMIGRATION WILL BE THE ONLY ANSWER IF YOU VALUE YOUR HEALTH.
The DOH has a tremendous shortage of health care workers. Graduates are struggling to get internships and posts for community services. The reason is corruption. Fix these chaotic problems first and then try to take bigger steps. It appears they are intent on bringing health care to a halt.
Dear Dr Roach,
You might say it’s a long time before implementation will happen.
1) If the bill is passed a a law, when will the taxpayer start paying for that ? I suppose it will happen soon, in addition to medical aid contribution.
2) Can you explain how a population of ~ 6 million tax payers will be able to foot the bill for a population of ~ 60 million if you want to provide good standard medical care.
The DoH is not able to provide it now. I’m not sure what will change it .
3) African countries who abolished private health care after independance, introduced it many decades later. From all the examples I have seen , it’s not easy to develope an infrastructure from scratch again.
4) I doubt that medical professionals are going to wait 15 years before they realise that the system is not working.
5) I’m a medical professional who has worked previously in other African countries.
6) It will be helpful if we can have at least one example of a developing country where a similar system is effective .
I believe that NHI is already here.
My experience at government hospitals satisfactory.
We need to empower Clinics.
Also Independent pharmacies to act as satellites at a primary health care level.
Empower the Nurses, Pharmacist and doctors.
This at ground level.
Have you discovered what Discovery health profits are?
Also the funds entrusted to them by members; what happens to the interest on the money?
Do Members do not get benefits.? You will be very surprised.
Please do not be bluffed by smokescreen of Medical aids .