Tag: NHI

Categories : Expert Opinion Healthcare Politics and RegulationsTags :

Medical Sector Airs their Concerns about the NHI Bill and the Impact on the Health of Citizens

On By ModernMedia

At a recent media briefing session hosted by the Board of Healthcare Funders (BHF), managing director, Dr Katlego Mothudi, together with a distinguished panel of healthcare leaders addressed critical concerns regarding the National Health Insurance (NHI) Bill proposed by the South African government. The panellists, including BHF’s Chairperson, Ms Neo Khauoe, Dr Stan Moloabi, Chairperson of the BHF’s Universal Health Coverage Committee (UHC), Dr Mvuyisi Mzukwa, Chairperson of the South African Medical Association (SAMA), Prof Alex van der Heever, an expert in Health Care Governance at University of Witwatersrand  (WITS), and BHF’s Head of Health System Strengthening, Dr Rajesh Patel, jointly emphasised the critical importance of addressing the current shortcomings in the NHI Bill. The panel highlighted the urgent need for systematic amendments before the Bill’s implementation. 

While the BHF supports the concept of universal health coverage, Neo Khauoe strongly disagrees with the approach of the NHI Bill that public healthcare funding must increase at the expense of medical schemes.  “The private health funding sector in South Africa should not be sacrificed in favour of NHI. It is too valuable in terms of jobs, scarce skills, infrastructure, financial investment, the quality of the health care services its beneficiaries receive, the value it adds to the economy, and the support it has lent to the public health sector,’’ she said.  

Rajesh Patel, highlighting concerns within Section 33 of the Bill, pointing out the need for clarity in the Minister’s decision-making processes regarding the inclusion of rules for thorough implementation and addressed ambiguity in NHI contracting with health service providers. He said, one of the bigger complications is that maternity care has been excluded from the medical scheme’s benefits.  

“There are absolutely no indicators in Section 33 to guide the Minister as to when NHI is fully implemented. Section 33 is thus contrary to the constitutional principle of administrative justice and allows the Minister to act arbitrarily. The determination by the Minister is an administrative decision that is subject to Section 33 of the Constitution and the Promotion of Administrative Justice Act No. 3 of 2000. As such, it must be lawful, reasonable, and procedurally fair. How is the Minister to know what will make his decision lawful if Parliament gives him no guidance in the NHI Act? The minister is not the lawmaker. That is Parliament’s role,” said Patel. 

He emphasised the complexity of the NHI fund contracting health service providers and proposed the simplification of the process to encourage the participation of private sector firms in this undertaking. The private health service providers are estimated to be between 65 000 and 70 000 individuals and entities. The issues raised include the capacity for the responsible party for certifying and accrediting these health service providers and facilities, which will thereafter determine their eligibility for contractual engagement. The slow pace of certification and accreditation may limit access to care for healthcare users, as the user must register with NHI via accredited health service providers. Should contractual arrangements fail the health citizens risk not being funded from the NHI.

Stan Moloabi, Chair of the UHC Committee at BHFs, emphasised that medical schemes are important in healthcare provision and this importance is beyond just financial aspects. Serving as an integral stakeholder in the ecosystem that allows the health citizen’ to access the necessary health services in a timely, effective, and efficient manner, ultimately ensuring the provision of high-quality care.  Moloabi concluded by saying, “We are currently facing uncertainties regarding the specific details that will arise from the ongoing policy changes outlined in the NHI Bill.  As private healthcare funders, our primary goal is to actively collaborate with policymakers, which is crucial to achieving our shared objective of achieving UHC.“

According to Alex van der Heever, the NHI Bill is designed in a manner that will further undermine the already precarious situation of the South African healthcare sector. The discourse surrounding the move towards the achievement of universal health coverage in the country necessitates a comprehensive examination of the underlying goals associated with the concept of universal health care. Medical schemes are currently an integral component of the health system providing cover to 9 million lives. The hybrid universal coverage model is widely employed across the globe. He expressed his concerns pertaining to the single funder in the NHI Bill and the pressure on the health care system should all citizens rely on a single scheme. Furthermore a single fund is an impractical approach for both rich and developing countries Given South Africa’s limited GDP strength, such a proposition appears particularly unreasonable. 

Neo Khaoue provided an in-depth analysis of the prospective financial consequences that enterprises may encounter because of the implementation of the NHI programme. Khaoue specifically emphasised the expected discrepancy in healthcare accessibility rates among employees under the NHI Bill in comparison to the existing system. The discrepancy is anticipated to extend the duration of employees’ recuperation, resulting in supplementary expenses for employers because of the postponed resumption of employees’ work duties. Considering the democratic nature of South Africa, it is crucial to prioritise the provision of opportunities for South African citizens to exercise their autonomy in shaping the course of their own future.  Khauoe questioned the means through which discrepancies between private and public healthcare systems can be mitigated, particularly considering the existing difficulty of lengthy waiting times for various medical treatments.  She said, “What strategies could be used to help the NHI Bill to simplify some of its processes, for example, if one is prepared for a certain operation but there is no anaesthesia available and the procedure is not performed on the specified day, what then? Furthermore, it is imperative to establish a reliable mechanism to guarantee that those who have been scheduled for operations or procedures will indeed undergo them on the designated days without any rescheduling. This demonstrates the necessity of both public and private sector involvement in addressing and resolving existing imbalances as a primary concern.” 

 According to Mvuyisi Mzukwa, the Chairman of SAMA, the NHI Bill has the potential to impose financial consequences on healthcare practitioners. Although healthcare providers may qualify for payment for services provided to beneficiaries of the NHI, it is important to note that the rates for these services may be standardised. This standardisation could potentially lead to a decrease in their revenue compared to the fees charged in private practice. Therefore, it may be necessary for practitioners to adjust their financial expectations and business strategies. He affirmed that the potential consequences of NHI could vary significantly depending on the legislative and regulatory framework in place. He went on to say, “Nevertheless, it is crucial to consider the financial implications for healthcare professionals when finalising the NHI Bill. The most important thing is that as the private health care practitioners we want to participate via collaboration with the policy makers in ensuring that we achieve those ideas they have.” 

“As BHF, we are resolute that we provide the health citizen with a comprehensive understanding of the potential implications, challenges, and shortcomings of the NHI Bill before the upcoming provincial briefing sessions to be convened by the government. This is essential for fostering transparency, informed public discourse, and evidence-based policymaking in healthcare reforms and for giving South Africans a clear understanding of how the Bill will affect the lives of every citizen. I urge all South Africans to participate as it will impact all of us,” Katlego Mothudi said. 

Mothudi highlighted that BHF firmly supports the freedom of the people of South Africa to spend their disposable income as they see fit, including insuring any of their health needs through medical schemes. This right is derived from the constitutional value of personal freedom in a democratic society and the rights to human dignity, privacy, freedom of association, freedom of thought, belief, and opinion, and the right to have access to health care services and emergency medical treatment. 

“The NHI Bill is anticipated to have a cascading impact on the already declining state of the public health system in South Africa,” concluded Mothudi.    

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Deadline for Public Comments on NHI Bill Pushed Back

On By ModernMedia

The Select Committee on Health and Social Services has extended the deadline for public comments on the contentious National Health Insurance (NHI) Bill by two weeks, according to a report from Business Insider. In its announcement, the Committee said that it had received numerous requests from stakeholders to extend the date on written submissions for the act.

The committee has therefore extended the deadline from Friday, 1 September 2023 to Friday, 15 September 2023. The Bill is already before the National Council of Provinces (NCOP) after being passed by Parliament in June, in spite of vehement opposition. Once past the NCOP, which seems all but assured given its stubborn progress, it will then be sent to President Cyril Ramaphosa to be signed into law.

Contact details to submit enquiries or written submissions are at the end of the article.

Controversy continues unabated

An unrelenting barrage of criticism has been directed at the Bill, which so far has shown little change in response and according to many its constitutionality is questionable. While stakeholders are generally for universal healthcare and the idea of an NHI, the current public healthcare system is already under dire pressure, being underfunded, under-resourced in terms of skilled professionals and equipment, and riddled with corruption.

Indeed, South Africa would be the first country in the world to completely bring all healthcare. The fact that other countries with better governance track records and more resources have not done so has been brought up as a red flag.

Another is the vague notion that the government will pay for the scheme somehow – which inevitably means reaching into taxpayers’ wallets. The estimated cost of R300 billion and R660 billion a year will be by far the largest single government expense in a time of shrinking funds.

“Looking at 2026 – the year in which the NHI is supposed to be implemented – an enormous extra R296 billion will be required in order to balance the books,” the Solidarity Research Institute (SRI) said.

“This is unheard of for a middle-income country, where spending on education usually enjoys the highest priority. While more affluent countries spend more on healthcare, social grants usually receive the highest priority, never health,” said the SRI.

Options to foot the bill range from a staggering 40% surcharge on income tax to a payroll tax of 13.4%, which Professor Alex van den Heever criticised as being “incredibly naïve set of fiscal proposals that you cannot even consider implementing.” Discovery Health CEO Ryan Noach warned of a tax revolt if the government attempts to pay for this.

Practical allternatives on offer include a public-private partnership as envisaged by Business Leadership South Africa CEO Busi Mavuso.

Enquiries, as well as written submissions, can be directed to Ms M Williams, Select Committee on Health and Social Services, e-mail mawilliams@parliament.gov.za.

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Opinion: There are Paths to Quality Universal Healthcare Besides NHI

On By ModernMedia
One of the most damaging aspects of our public discourse on National Health Insurance (NHI) is the mistaken notion in some quarters that the only two options are NHI and the status quo. PHOTO: Rosetta Msimango/Spotlight

By Marcus Low for Spotlight

One of the most damaging aspects of our public discourse on National Health Insurance (NHI) is the mistaken notion that the only two options are NHI and the status quo. Often implicitly, sometimes explicitly, defenders of NHI suggest that any argument against NHI is one for maintaining the current system. Since the current system doesn’t work very well for most people, this line of argument gets some purchase, even though it is based on a false premise.

In his book “Which country has the world’s best health care?”, oncologist and bioethicist Ezekiel Emanuel outlines the key features of healthcare systems in 11 different countries. Two things that stand out are that health systems differ substantially between countries and that most systems are the relatively messy products of complex histories and political and other compromises. This latter point about the path-dependency of healthcare systems is an important point we will return to.

Many varieties

South Africa’s proposed NHI system is sometimes clumped together with systems in other countries such as Canada, the United Kingdom, and Thailand. At times this is fair, at times it skims over important differences.

For example, NHI will be a single-payer system, which is to say, the NHI fund will be responsible for almost all purchasing of healthcare services in the country. In some respects, Canada has a similar system, except that rather than one system for the whole country, they in effect have 13 single-payer systems for each of their provinces and territories. Even Thailand, at times referred to as an example of NHI, technically has three funds rather than one, although it resembles South Africa’s NHI plans in several other respects. In principle, a large single-payer should be able to negotiate better deals than several smaller payers, but on the other hand, having Canada-style provincial funds would be more closely aligned with South Africa’s current governance arrangements and in some provinces, like the Western Cape, chances are people would have more trust in a fund run by the province than in one run nationally.

Another thing that quickly becomes apparent when looking at the variety of healthcare systems out there, is that a simplistic dichotomy between NHI and private healthcare is a false one. Countries like the Netherlands and Germany have achieved excellent health outcomes with systems that are neither NHI-style systems nor examples of the private sector running riot. Though the details are significantly more complicated than this, you can think of the Netherlands and Germany roughly as having many strictly regulated medical schemes (called sickness funds in Germany) with scheme/fund membership being compulsory (with some exceptions). The German system is progressive in that people with higher incomes contribute more than people with lower incomes – an important difference from South Africa’s medical schemes.

Funds in the Netherlands are also not primarily funded directly, as with our medical schemes, but receive funding from a central fund via a risk adjustment process. Both the German and Dutch systems have significant social solidarity built-in in the way it institutionalises the cross-subsidising of the poor by the wealthy.

In South Africa, such a system could, for example, be implemented by dramatically tightening up the regulation of medical schemes, putting in place a progressive mechanism for cross-subsidisation between schemes, making scheme membership compulsory for those who can afford it, and, over time, using tax revenue to pay for scheme membership for the unemployed (although this last element, like NHI, does come with a big question mark on affordability. Those with long enough memories might remember that a system roughly along such lines was on the cards in South Africa around the turn of the century. (see for example the Taylor report of 2002 and this interesting paper.)

Getting to there from here

One striking thing about NHI in South Africa is that for all the column inches, submissions to Parliament, and oral hearings across the country and in Parliament, hardly anyone seems to have shifted their positions in the last decade and there has been very little serious consideration of alternative paths to universal healthcare.

Photo by Hush Naidoo on Unsplash

One reason for this is the sense that the design choices behind the NHI Bill were essentially decided on by a relatively small group of people in the National Health Department and the African National Congress (ANC) around 10 or 15 or so years ago. What followed since then often felt like an attempt at co-opting rather than meaningful engagement. This was particularly apparent in the way some members of the Portfolio Committee on Health continuously pushed people on whether they are for or against NHI, rather than engaging with the substance of people’s submissions. Though the boxes for public engagement were ticked, the reality was often a parody of what such engagement is meant to be.

We could have gone a different route. It would have been entirely feasible to have a process for NHI akin to the much more meaningful set of engagements we had for the Competition Commission’s Health Market Inquiry into the private healthcare sector. In that case, people could make submissions, be heard by the panel, and crucially, one never got the sense that the outcome was preordained. Such a process may in some respects have given government officials and members of Parliament a few more headaches, but it would also have built trust and understanding of the technical issues, and for major reforms like NHI trust and public understanding is half the battle.

Republished from Spotlight under a Creative Commons Licence.

Source: Spotlight

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Funding the NHI: ‘Political Suicide’ and Tax Revolts

On By ModernMedia
Photo by Jp Valery on Unsplash

According to a 27-page ‘factsheet’ purportedly produced by the Department of Health and the Presidency, the National Health Insurance (NHI) scheme would be funded through a payroll tax and additional personal income taxes. There are however better ways to go about this, according to a number of experts who weighed in on the topic.

Professor Alex van den Heever said that the payroll tax plan is misguided, according to Daily Investor. In the same vein as Unemployment Insurance Fund (UIF) payment, both employers and employees would make contributions to a payroll tax.

But Van den Heever criticised this, saying that those who suggested this do not have the qualifications to make financial comments such as NHI funding.

“They talk of introducing payroll taxes. You don’t introduce payroll taxes for a general government allocation,” he explained. “Payroll taxes are for contributory systems where you get a specific benefit or entitlement for what you contribute.”

The term “payroll taxes” in relation to funding NHI does not make sense, he said. Discussions on raising taxes and a new payroll tax shows that the government does not know how to fund the NHI.

He called them an “incredibly naïve set of fiscal proposals that you cannot even consider implementing,” and that they were “incoherent from a public finance perspective.” Introducing them as is would be politically suicidal: the tax base is already overburdened, and raising taxes beyond a certain point results in a reduction in taxes actually collected.

“It is very dangerous to overstress your tax bases. We are hitting the limit on the amount you can fund the government and the public health system from taxes.”

Huge tax increases needed to fund NHI

Van der Heever’s viewpoint is shared by Connie Mulder, Solidarity Research Institute head and Ryan Noach, Discovery Health CEO.

Mulder said trying to fund NHI through additional taxes is unfeasible because of the tremendous amount of money needed.

Mulder said that the massive additional taxation would “crush South Africa’s economic outlook.”

It is naive for the Department of Health to assume that medical aid contributions will be funnelled into a national health insurance scheme, said Noach. The NHI scheme would force South African taxpayers to pay much higher taxes but cut their healthcare entitlement by 72%, and would provoke a tax revolt.

South Africa has a unique situation where a very small tax base of 5.5 million people funds nearly all government expenditures, accounting for 80% of public healthcare funding, he said. Notably, their after-tax disposable income is used to pay medical aid and private healthcare.

The single-funder model described in the NHI Bill would not be able to achieve the government’s goal of equitable access to healthcare, Noach told Daily Investor. This is a model which Discovery Health does not endorse, calling it not only “risky and inefficient” but also not likely to be equitable because “cross-subsidies cannot be properly managed”.

He reiterated earlier comments where he said that the NHI Bill would have no immediate impact on medical schemes, but once it is fully implemented (with “implemented” remaining undefined), medical aid schemes would only be allowed to offer what is not covered under the NHI – at the discretion of the Health Minister. This would make NHI a single monopolistic funder for the NHI package of services, which he had said in an earlier interview with Newzroom Afrika was without a parallel anywhere in the world. 

Even though implementation is a decade away, this is going to drive off health sector investment, Noach said.

Noach recommended a multi-fund framework, which he described as “not only less risky and faster to implement, but also ensures that cross-subsidies are managed to ensure that social solidarity is achieved”.

Collaboration between the private and public sectors is the only way financial integrity and sustainability is achievable, something which has been built on the successful COVID-19 partnerships.

NHI ‘charade’ – but Obamacare offers an alternative

Business Leadership South Africa CEO Busi Mavuso has a similar view – and didn’t mince her words. According to Mavuso, NHI as currently envisaged, was a “charade” without any thought to funding, according to Moneyweb. One that would leave all South Africans worse off, and recommends instead a private-public partnership.

She also pointed to the public–private partnership behind South Africa’s COVID-19 response. The two entities sourced resources, rolled out vaccines and funded other interventions.

“It was a clear demonstration that national health outcomes are achieved faster and more efficiently when government and business work together, drawing on their respective strengths,” she said.

“With the right incentives, the private sector can complement government efforts, speed up the investment needed and reduce costs to the state and users.” 

One viable alternative to the NHI’s single buyer model was the US’ Affordable Care Act (aka Obamacare) in the US, wherein health insurers provide minimum cover, with the state subsidising those below a certain level. Insurers are however able to compete to offer coverage.

One other disadvantage of South Africa effectively ending the private sector was that it would discourage internationally mobile businesspeople from working in the country.

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National Health Insurance: Finding a Healthcare Solution that Serves All South Africans

On By ModernMedia
Photo by Hush Naidoo Jade Photography on Unsplash

The Passing of the National Health Insurance Bill on 12 June 2023 by parliament has many stakeholders in the healthcare industry concerned as to what the implications are.  The reality is that there is a long and challenging process ahead, and the NHI Bill has many years to go before all of its provisions could be implemented.  

Putting all the challenges and debate aside, Jacqui Nel, business unit head of healthcare at Aon South Africa, highlights the salient points that are at the heart of the matter. “First and foremost, I would like to affirm that the private healthcare sector needs to focus all its efforts on objectively collaborating with all parties concerned to achieve a stronger and affordable healthcare solution for all South Africans. The concept and ideals of providing universal health coverage should not be in dispute.”

“The overarching principle of the NHI bill is to provide universal health coverage and social solidarity, providing all citizens with access to the same essential health care benefits, regardless of their financial means,” she adds.

However, the road to successfully implementing NHI is a long and costly one, with many experts saying it can take up to 15 years to achieve, if not more. Purely from a legislative point of view, there are no less than 11 pieces of legislation that will need to be amended to align with NHI objectives, and this is an onerous process. 

This includes:

  • National Health Act
  • Mental Health Care Act
  • Occupational Diseases in Mines and Works Act
  • Health Professions Act
  • Traditional Health Practitioners Act
  • Allied Health Professions Act
  • Dental Technicians Act
  • Medical Schemes Act
  • Medicines and Related Substances Act
  • Nursing Act
  • And various Provincial Health Acts.

The first of many court cases are already making headlines. “On the constitutional front, one of the 11 pieces of legislation requiring amendment is the National Health Act, which governs the ‘Certificate-of-Need’ (CoN), a piece of legislation that would dictate to private sector doctors where they are permitted to practice and what services they may provide. This ‘CON’ is essential to government to control doctors under the NHI plans and is being challenged by trade union Solidarity and six other parties,” says Nel.

About the NHI Bill

The NHI Bill lays out the duties and functions of the NHI Fund, which are primarily to strategically purchase health care services based on the principles of social solidarity. All permanent residents and citizens will be eligible as beneficiaries of the “Fund” as it is referred to; and temporary residents and foreigners will have access to emergency medical treatment and access to other health services as determined through a mandatory travel insurance.

“The Bill states that eligible beneficiaries will be able to access health services through registering as a user of the “Fund”. Each member will have a number that is unique to them and their dependents. The Fund will then reimburse health care providers directly for services rendered, provided they have met the accreditation requirements. It is envisaged that comprehensive health services benefits must be made available and these services will be determined by the Benefits Advisory Committee,” explains Nel.

The Bill also refers to the establishment of the ‘Board of the Fund’, and the remuneration and reimbursement of the members of the Board which will be determined by the Minister of Health in consultation with the Minister of Finance.  “There are various other functions of the fund for which further administrative departments will need to be set up to address planning, benefits design, price determination, accreditation, purchasing and contracting, payments, procurements, performance monitoring and a risk and fraud prevention unit,” says Nel.

However, there are major points of concern that remain and will need to be addressed to facilitate any implementation of the NHI into South African society, which include:

  • Ministerial powers, good governance and accountability.
  • Role of the different spheres of government.
  • Role of medical schemes.
  • Tax implications for taxpayers, both from an employee and employer perspective.
  • NHI funding models – increased taxes?
  • Health financing expertise.
  • Training of healthcare providers – consequence management.
  • Service delivery at state facilities and healthcare facilities.
  • Infringement on the right of choice.
  • Lack of detail around major parts of the NHI Bill.

In summary, this Bill is the roadmap to NHI, but many other pieces of legislation will have to be amended, and a crucial element is currently still missing which is the cost of NHI and what the basket of services will include.  “To enable the NHI will require an appropriation bill from National Treasury to detail how the NHI is going to be funded. However, detail on this has been slim, while government’s finances are heavily constrained and look likely to worsen in the future with various global and local factors coming into play,” says Nel.

“We fully expect that there are going to be significant challenges to the many technical and restrictive provisions contained within the NHI Bill, and these challenges may well alter its entire substance, and there is also the prospect of political shifts that could have a material impact on health policy going forward.  We simply do not see any material shifts to the private healthcare sector anytime soon,” Nel explains.

What is certain is that the Bill in its current shape and format is unlikely to remain as it is today.  “While the NHI Bill raises serious concerns, there is no disputing the need for structural change. There will be much debate and negotiation in the years ahead in unpacking the strengths and weaknesses of current public and private healthcare systems, and we look forward to a rational and workable solution to the achievement of better healthcare and to assist in a workable solution for all South Africans,” Nel concludes.

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A Legal Look at The National Health Insurance Bill

On By ModernMedia
Photo by Tingey Injury Law Firm on Unsplash

By Martin Versfeld, Prelisha Singh, Glenn Penfold & Robert Appelbaum, Partners at Webber Wentzel

With the National Health Insurance Bill having recently been approved by the National Assembly, many questions and concerns about the practical implementation of the scheme remain unresolved.

The National Health Insurance Bill (the Bill) was recently adopted by the Parliamentary Portfolio Committee on Health and was approved by National Assembly on 14 June 2023. It will now be tabled before the National Council of Provinces.

The Bill provides for the establishment of the National Health Insurance Fund (the Fund) aimed at promoting the laudable purpose of universal access to quality health care. It is envisaged that the Fund will purchase health care services and products from accredited health care service providers and health establishments (including hospitals) (which we refer to, collectively, as “service providers”), including private service providers that choose to contract with the Fund.

Many stakeholders and experts have raised concerns that the National Health Insurance (NHI) scheme envisaged in the Bill is simply unaffordable, particularly as it would require an extensive administrative apparatus. A related concern is the extent to which the NHI will rely on the public health care system to deliver services, and the capacity of that system to provide an acceptable quality of services. Given the dire state of public health care in our country, it is surprising that the Government persists with plans to spend vast resources on implementing the NHI. Those resources would greatly improve the delivery of quality health care – and universal access to that care – if they were deployed directly in the public health sector.

In view of the questions about the affordability of the NHI, the provisions of the Bill providing for the income of the Fund are of particular interest.  Clause 49 states that the Fund’s chief source of income will be money appropriated annually by Parliament. This must be appropriated from collections of, among others, general tax revenue, a payroll tax and a surcharge on personal income tax. This taxation regime is, however, difficult to reconcile with clause 2, which states that the Fund will be funded through “mandatory prepayment” (a term that is defined as “compulsory payment for health services before they are needed in accordance with income levels”), and clause 55(1)(t), which empowers the Minister to make regulations on “all fees payable … to the Fund”.

One of the challenges in interrogating the NHI scheme envisaged in the Bill is that it leaves many of the key issues to be determined later.  For example, the extent of the benefits to be covered by the Fund and the rate of reimbursement – both of which are crucial to assessing both the affordability of the NHI and its impact on the provision of quality health care – are not yet known (eg see clause 10(1)(g)).  The Bill also leaves a broad range of matters for the Minister of Health (the Minister) to prescribe through regulations. These matters include the rules on portability, which will allow patients to be treated by service providers other than those with whom they are registered (clause 7(2)(b)); the referral pathways between service providers (clause 7(2)(d)(ii)); the coding systems to be employed (clause 39(5)(b));  the relationship between the Fund and medical schemes (clause 55(1)(n)); and “the scope and nature of prescribed health care services and programmes and the manner in, and the extent to which, they must be funded” (section 55(1)(w)).

The Bill’s preamble states that its purposes include to “create a single framework … for the public funding and public purchasing of health care services, medicines, health goods and health related products” and to “eliminate the fragmentation of health care funding”. A key question that arises is what role medical schemes will continue to play and, indeed, whether they will be able to continue to exist. Clause 33 of the Bill stipulates that, once the Minister has determined that the NHI has been fully implemented, medical schemes “may only offer complementary cover to services not reimbursable by the Fund”. Similarly, clause 6(o) states that users of health care services are entitled to “purchase health care services that are not covered by the Fund through a complementary voluntary medical insurance scheme”. In other words, medical schemes may not cover health care services that are covered by the Fund. Since the Fund is intended ultimately to cover a comprehensive range of benefits, the Bill envisages that the businesses of medical schemes will shrink dramatically which may, of course, threaten their continued existence.  This regime is likely to face constitutional challenge, including on the basis that it infringes: (a) the right to access health care services, by forcing many people who currently access private medical care via medical scheme funding to rely on what is currently a woefully inadequate public health care system; (b) the property rights of medical schemes and their administrators; and (c) the right to freedom of trade, occupation and profession.

Another crucial issue is how the Bill will regulate accredited service providers. Clause 39(2) imposes onerous requirements for accreditation, including the submission of a “budget impact analysis”. One area of concern, as mentioned above, is that the Bill does not clarify how reimbursement rates will be determined. Clause 10(1)(g) simply states that the Fund must set payment rates annually “in the prescribed manner and in accordance with the provisions of this Act”. Given its importance to sustainable access to health care, one would at least have expected the Bill to make clear that the payment rates must be set at a level that allows providers to cover their efficient costs and make a reasonable return. Another cause for concern is that clause 38(6) envisages that an accredited service provider must procure health-related products (including medicines and medical devices) according to the Fund’s formulary, and that suppliers listed in the formulary must deliver directly to the service provider or establishment. To the extent that this clause requires private service providers to procure from suppliers chosen by the Fund, this blurs the line between public and private procurement, reduces competition, and unduly restricts private service providers in the conduct of their business.

The role that the Bill contemplates for the Minister is also potentially problematic.  For example:

  • Clauses 4(1) and 7(1) provide that the Fund must purchase health care services “in consultation with the Minister” (which our courts have held means that the Minister’s concurrence is required).  It is wholly impractical to require the Minister to concur in the purchase of health care services.
  • It is unclear to us why the Minister must agree on detailed issues that require the application of clinical judgement, such as the benefits to be determined by the Fund’s Benefits Advisory Committee and the formulary to be employed by the Fund (clauses 25(5)(c) and 38(5)).

While seeking to secure universal access to quality health care is generally supported and rightly so, the Bill represents an over-hasty effort to fundamentally restructure the country’s public health service with potentially devastating consequences for healthcare providers and consumers alike.

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‘No Need to Panic’ Over NHI, Says Discovery CEO

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Photo by Hush Naidoo on Unsplash

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.

Categories : Ethics and Law HospitalsTags : 1 Comment

Hospital Association of South Africa Joins Chorus of Criticism Against NHI Bill

On By ModernMedia

The Hospital Association of South Africa (HASA) has added its objections to the proposed National Health Insurance (NHI) Bill to the growing volume of objections from professional medical organisations. In common with them, HASA strongly supports universal health coverage but stands against the NHI Bill in its current form.

Their statement reads: “We believe that approving the Bill without substantive consideration of the many valid and significant recommendations and contributions made by many participants during the Parliamentary hearing is deeply regrettable and a missed opportunity by the Committee.”

Chief among their objections were the potential for corruption and mismanagement in the centralisation of medical funds as well as the many legal objections to the Fund.

Despite serious, credible concerns being raised at every turn, the NHI Bill continues to progress, with Parliamentary Portfolio Committee for Health recently giving the Bill its approval on 26 May, moving it forward to debate within the National Assembly. To support healthcare professionals, Quicknews will be running a series of articles discussing the Bill and providing resources to help them take positive action to protect healthcare services for all of their patients. The Gauteng e-toll saga has already shown that ill-conceived and damaging legislation can be brought down if there is sufficient, coordinated public opposition.

With HASA’s statement, three of the largest medical associations in South Africa have now spoken out against the controversial bill. The South African Medical Association (SAMA) and South African Private Practitioners Forum (SAPPF) have both unequivocally stated their opposition to the Bill as it is currently formulated.

In addition to other risks, South Africa faces a potential exodus of healthcare professionals. Indeed, the UK’s National Health Service has for some time been actively poaching nurses and midwives from lower-income countries like South Africa.

HASA urges National Assembly and the National Council of Provinces in their deliberations on the Bill “to insist on a multi-payer model to mitigate against the concentration of risk, an iterative rollout based on milestones rather than dates and to pay heed to the nation’s concerns that the proposed National Health Insurance Fund is susceptible to theft and corruption by proposing and approving alternate and appropriate governance structures.”

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Categories : Healthcare Politics and RegulationsTags : 2 Comments

South African Medical Association Rejects NHI Bill as it Now Stands

On By ModernMedia

The South African Medical Association (SAMA) issued a statement stating that they reject the current form of the National Health Insurance (NHI) Bill, with a major objection being that the mere establishment of the NHI fund does not embody the Constitutional principle of universal health coverage (UHC).

The NHI Bill is designed to provide one pool of healthcare funding to all South Africans and long term residents.

They state that the NHI Bill was developed without regard to expert concerns and opinions, especially on key issues such as Contracting Units for Primary Healthcare (CUPS), Benefit Packages and Reimbursement Models.

Given the mismanagement of COVID funds by the government and state-owned entities, there is further concern over its ability to regulate the R500bn fund.

SAMA spokesperson Dr Mvuyisi Mzukwa said: “Misappropriation of funds in various state-owned entities casts doubt on government’s ability to handle the health care budgets responsibly. The public, alongside healthcare stakeholders, cannot simply entrust their lives to a government with an established history of financial mismanagement.”

SAMA contends that while the UHC is intended to improve the health and livelihoods of all South African citizens, the Bill as it stands will set the healthcare system up for failure.

“SAMA believes that a robust approach to health systems strengthening is indispensable, as it would rectify the current deficiencies and overcome the challenges posed by the NHI,” the statement concludes. “This approach seeks to enhance the efficiency, effectiveness, and resilience of the healthcare system, ensuring the delivery of optimal care to all individuals. Governance within the healthcare sector must be strengthened, with transparency and accountability at its core. Effective management of funds and meticulous budget allocation is imperative to rebuild trust and demonstrate responsible stewardship of public resources.”

Categories : General Interest Healthcare Politics and Regulations Medical IndustryTags :

OPINION: NHI Bill Must Still Clear Many Hurdles to Ensure Adequate Medicine Access

On By ModernMedia

By Yanga Nokhepheyi, Marlise Richter, and Fatima Hassan for Spotlight

A frightful piece of information came to light recently. The pharmaceutical giant Pfizer announced its 2022 revenue at $100 billion. This is more than the combined health spending of 108 countries in 2020 according to calculations of The People’s Vaccine Campaign. The Pfizer COVID vaccine, of course, helped the dollars roll in. In fact, some reports suggest that Pfizer charged some countries $130 per dose of vaccine, while it is estimated that it costs less than $2 per dose to make. That equated to a markup of a stupefying 10 000% but we don’t know the full pricing details because the contracts are marked ‘secret’.

Figures like these make one’s eyes water.

In this pandemic, tackling the pharmaceutical sector and the perversities of its pandemic profiteering has been the focus of an international movement of health activists united under the banner of the People Vaccine Campaign. Partly because of severe resistance by governments in the global north and inaction locally, access to timely supplies of affordable and essential COVID vaccines, medicines and diagnostics has not materialised. But the struggle continues not only to tackle these structural barriers to beat COVID and future pandemics but also to help ensure implementation of Universal Health Coverage (UHC) systems. UHC means that everyone would be able to get the quality health services they need and benefit from scientific progress – irrespective of their ability to pay and without having to face financial hardship.

A Herculean task

South Africa, too, has committed to attaining UHC by 2030 as part of a set of promises made on the United Nation’s Sustainable Development Goals. South Africa’s main strategy to attain UHC is to implement a National Health Insurance (NHI) system. Unfortunately, progress has been historically slow, but in the build-up to the 2024 elections, the African National Congress (ANC) Members of Parliament (MPs) are rushing the law reform process despite an acknowledgement even from the health ministry that progress and timelines are hampered by the socio and mainly economic impacts of the pandemic. This includes a fiscus crisis with additional pandemic-related debt, and according to Dr Nicholas Crisp, Deputy Director-General in the health department responsible for NHI, “the NHI could take decades to be implemented at full scale”.

It will require a Herculean task to unify our apartheid-era two-tiered healthcare system, with the right skills, funding base, and transparency in decision-making around health policy and medicine selection. The pandemic has highlighted why all these elements are critical for healthcare for everyone.

We provide a short overview of our research below.

Law reform

Last year, the Portfolio Committee on Health in Parliament deliberated on the ‘NHI Bill’, but there were no significant changes made to it. It needs major revision. Many serious concerns and recommendations from parliamentary submissions by multiple stakeholders have gone unaddressed. The Health Justice Initiative (HJI) has focused on medicine procurement provisions in the Bill and in 2022 raised at least 17 questions that require greater attention before the law is passed. Neglecting to address the public’s submissions is not surprising seeing that ANC MPs serving on the committee were resolute in having the National Assembly adopt the Bill before the ANC Conference in December 2022. However, time ran out before the adoption of the Bill by Parliament, and the Parliamentary process is seemingly going to resume this month.

Stakeholder submissions to Parliament on the Bill (of which there were 64 000 written submissions following Parliament’s call for comment in 2019) and various commentators have warned about the ‘looming disaster’ that the Bill in its current form poses, but they are often divided on the main reasons. A tiny minority resists the principle of unified health systems and Universal Health Care for all (meaning, also for the poor). Many more groups agree that NHI is an ethical necessity but are concerned about South Africa’s disintegrating public health system, energy crisis, high levels of state corruption involving health product procurement, and the in/ability of the Department of Health to actually implement NHI in its current proposed form.

Other groups have rightfully pointed out concerns over conferring too much power on the Minister of Health, inadequate financing models, the feasibility of NHI in SA post-COVID, and the exclusion of specific categories of people from NHI. (For a curated archive of critical submissions, please see here).

Risks to medicine access

Regrettably, the provisions in the Bill on Medicine Selection, Pricing, and Procurement are ambiguous at best, and as the HJI pointed out in 2022, the entire shift of our medicine selection, procurement, and reimbursement system to “NHI reimbursement” has not been adequately thought through, potentially posing a great risk for the future of medicine selection and access in the country for all people. This requires immediate attention at the highest levels of the executive and the legislature too – and likely needs a multi-department and stakeholder technical group to urgently determine the exact trajectory of this planned process.

The World Health Organization has emphasised that UHC programmes will only be successful if there is “affordable access to safe, effective, and quality medicines and health products”. In addition, the COVID pandemic has taught us that timely and fairly priced access to essential diagnostics, therapeutics, and vaccines is key to addressing any public health emergency and improving health outcomes. We cannot safeguard public health without access to medicines – procured fairly, delivered on time, and based on expert and transparent decision-making and approval.

The cost of medicine, as elsewhere in the world where there are national health systems, remains a key concern. The Minister of Health last November in the National Assembly said that the funds for the NHI would be collected through a combination of taxes, including the reallocation of medical scheme credits paid to medical schemes, provincial health budgets to the NHI Funds, and payroll tax.

The financial feasibility of implementing the NHI is still unclear and a huge risk to the fiscus in a post-COVID economy that is dealing with a recession, load shedding, and high unemployment rates.

In late 2022, HJI argued that the Bill does not adequately consider the complexities of medicines access and that our medicines system could be severely jeopardised if poorly drafted sections in the current Bill become law. We said that government should set up a task team to urgently determine the exact trajectory of this planned process.

The Health Department’s recent response to submissions and its own recommendations on amendments to the Bill sadly does not realise the gravity of the threat to the future of medicine selection and access.

17 questions

In HJI’s 2022 analysis of the Bill, we raised 17 key questions that we believe must be addressed by lawmakers in the next version of the Bill and before NHI comes into effect. These include:

  1. What specific measures are envisaged to enable and promote public transparency related to medicine selection, procurement, and contracting processes under the NHI?
  2. How will the price of medicines not included in or covered by the NHI be regulated? And what role will External Reference Pricing (ERP) methodology play in the NHI and beyond?
  3. How will the NHI Fund (e.g., the Office of Health Products Procurement, the NHI Board) negotiate with global pharmaceutical manufacturers and suppliers to procure for government and how will that process be transparent and accountable?
  4. How will the Minister determine that the NHI is ‘fully implemented’, and what will take place in terms of what medical schemes can and cannot offer members during the transition period, and after the (undefined) date?
  5. Has consideration been given to designing a competitive and different single medicine pricing system for SA?

(See the full list of questions here).

The need for safeguards

Drawing on our work on medicine access during the HIV and COVID pandemic, we appreciate that there are powerful vested interests located in the multi-trillion-dollar pharmaceutical industry – this is why there is a need for legal safeguards, sound legislation, and independent and transparent institutions to ensure access to affordable medicines for all of us living here.

The pandemic showed that a lack of transparency, autonomy, and information around expert advice can bedevil open government decision-making. Secret procurement contracts for essential vaccines could become the norm even under NHI as they did in COVID, something we are fighting in our courts to open up, later this year.

Figuring out a sound system for a unified medicine access system under NHI is a formidable undertaking that requires a multi-disciplinary task team with experts from various fields, experience, and technical know-how. It is not easy to simply merge two parallel medicine procurement and selection systems. The risk is that the status quo could continue – where the rich and insured access the best medicines at a higher price.

We believe that the principles underpinning NHI for our highly regressive, unequal two-tiered healthcare system are too important for our collective health, well-being, and our Constitutional democracy to have lacklustre legal provisions and worrying gaps on the essential issues of medicine procurement and selection.

As the Bill currently stands, it will strengthen the private healthcare sector’s stranglehold on us and our fiscus. It will leave us at the mercy of advisory committees that bear no duty to be transparent in deciding which medicines you and I will be able to access under NHI.

We can and need to do better.

* Nokhepheyi and Richter are researchers and Hassan the Director of the Health Justice Initiative.

Source: Spotlight