Budget: NHI R1.4bn allocation is a demonstration of ‘government’s commitment’

Finance Minister Enoch Godongwana delivers the 2024 Budget Speech. Picture: GCIS

Finance Minister Enoch Godongwana delivers the 2024 Budget Speech. Picture: GCIS

Published Feb 22, 2024


THE R1.4 billion allocated to the National Health Insurance (NHI) scheme was a sign that the government remained committed to the NHI even though medical professionals and the business sector believe that the proposed NHI Bill is unworkable.

“The allocation for the NHI is a demonstration of the government’s commitment to this policy. There remain a range of system-strengthening activities, that are key enablers of an improved public health care system, that must be undertaken,” Godongwana said.

He said these activities include building a national health information system and digital patient records, upgrading health facilities and improving quality of care to ensure that they meet the minimum criteria to be certified and accredited for contracting under the NHI, strengthening facility and district management in preparation for contracting, granting semi-autonomous status for central (and potentially other) hospitals; and developing reference prices and provider payment methods for hospitals.

Business Leadership South Africa (BLSA) said previously that the NHI Bill was unworkable because there was no capacity within the public health system nor funding to implement it. In addition, the NHI Bill would be embroiled in litigation on several fronts, including its constitutionality.

The December 2015 White Paper on the National Health Insurance was long on dogma, but short on details with issues of affordability, free choice, human resources and quality not sufficiently addressed and quantified.

The proposed NHI stemmed from the ruling ANC Polokwane national conference in December 2007 and was largely ideological driven without regard to the practical implications of creating a universal health care (UHC) system so as to ensure that all South Africans have access to affordable, quality healthcare services regardless of their socio-economic status.

The Green Paper on the NHI released by the government in August 2011 set the parameters of the debate and after 39 iterations and 60 000 submissions spanning four years the resultant White Paper in December 2015 failed to address the issues raised by the public consultation.

The current national health system has a myriad challenges, among these the worsening burden of disease due to people living longer and being more sedentary resulting in a rise in non-communicable diseases (NCDs) such as cardiovascular diseases, diabetes, chronic respiratory conditions, and cancer, as well as the scourge of Aids and tuberculosis, high maternal and child mortality together with high levels of violence and injuries. This was exacerbated by the Covid-19 pandemic.

Under the NHI, the government will control almost every aspect of healthcare. This means bureaucrats 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. Pervasive regulation will also stifle innovation, reduce efficiency, and promote corruption.

In his Budget Speech, Finance Minister Enoch Godongwana noted that the government was well aware that currently procurement processes often fall short of delivering the most cost-effective solutions to government’s needs.

“Too often, there is a substantial disparity between the prices government is being charged and the prevailing market prices. For instance, the government buys ICT hardware such as laptops, uninterrupted power supply devices, monitors, and toners, at between 1.2 and 2 times more than market price.

“Given that government buys in large quantities, we should in fact be paying less and leveraging our buying power to get more value for our money. Obtaining value for money, as well as the principles of efficiency, transparency, and competition, remain paramount,” he said.