South Africa is one step closer to universal health care. What you should know about the NHI and who will pay for it

South Africa’s path towards universal health care took a major leap forward this week when the National Council of Provinces (NCOP) voted in favour of the National Health Insurance (NHI) Bill.

Earlier this year, Parliament passed the Bill.

While many have praised the efforts of the government to get the Bill moving and eventually enacted, proponents of the Bill are gearing for a massive fight.

AfriForum said it was ready to wage its “fiercest battle yet” against the Bill while the Western Cape government - the only province that did not back the Bill - has called for the NHI Bill to be sent back to the National Assembly for more consideration.

Provincial health MEC, Dr Nomafrench Mbombo, said that the process had been blemished by insufficient consultation.

"It's about the centralisation of the funds plus cutting the equitable share almost by 34% to the provinces. Number two, it leaves as many people behind whilst it's supposed to achieve universal coverage - it won't."

This landmark “revolutionary” legislation aims to ensure comprehensive healthcare for all, but it comes amid debates on the potential advantages and drawbacks.

Proponents of the NHI see it as a vehicle for much-needed change in a healthcare system riddled with inequalities.

It comes amid a World Bank report that affirmed South Africa as one of the most unequal societies in the world.

For many, the NHI, thus, provides hope for millions of South Africans who previously had limited access to healthcare due to financial constraints.

The system is designed to be funded by general taxation, eliminating direct, out-of-pocket payments at the point of care.

Advocates of the NHI point to a radical shift towards health equity which they argue is a fundamental human right.

They also argue the NHI will stimulate efficiency and quality improvement across the healthcare spectrum.

In an ideal world, by mandating a single purchaser and provider of healthcare, it could negotiate better rates with private service providers, while driving up standards. This could, in theory, force competition on the basis of quality rather than price, fostering a more patient-focused healthcare system.

Yet, the NHI is not without its detractors. Critics cite potential administrative and funding challenges, pointing to the public sector's track record of poor management and corruption. The NHI Fund, as envisaged, would manage a significant portion of the country’s GDP, and there are concerns about whether the system could be effectively and ethically administered.

They point to the government's poor handling of state owned enterprises such as Eskom, SAA, Prasa and Transnet as evidence the state does not have the capability to manage such an undertaking that would at some estimates cost up to R500 billion to run a year.

Questions about the financial feasibility of the NHI have also been raised. Though it is premised on tax-based funding, the precise details of this model remain murky. Critics fear that with South Africa's limited tax base and sluggish economy, the NHI might lead to increased tax burdens and fiscal strain.

Moreover, there are apprehensions about how the introduction of the NHI could impact the existing private health sector. The transition could cause turbulence, with potential job losses and business closures if the scheme doesn't effectively integrate private providers or if reimbursement rates are unsatisfactory.

While the NHI is a well-intentioned strategy towards health equity, its implementation will be a complex and sensitive task. Balancing aspirations of universality and quality with economic reality, and ensuring that potential vulnerabilities are robustly guarded against corruption, will be vital. As South Africa steps into the era of the NHI, IOL has curated the questions and answers to some of the most pressing questions being asked by South Africans about the NHI Bill.

Who will pay for NHI?

The NHI will be a mandatory state-run medical aid. All South Africans who have the ability to pay will be expected to contribute to the fund, whether they're medical aid members or not.

How will NHI be funded?

Any government anywhere in the world fund government programmes for the benefit of citizens mainly through tax, surcharges, special levies or special contributions from certain members of the society. This will also be the case with NHI, as is the case with Universal Health Coverage in any country.

Why do we need NHI?

According to the Department of Health, because they want a healthcare system that is fair and equal.

“While we are trying to build a more equal society, healthcare is very unequal. The amount spent on the healthcare of each person with medical aid is five times the amount that is spent on each person who relies entirely on public health facilities. The funding gap translates into a major gap in the standard of healthcare available to the rich and the poor. While eight out of 10 patients depend on public clinics and hospitals, the bulk of the country’s doctors, dentists and specialists serve a small section of the population who can afford private healthcare. In a just world, the sickest people – not the richest – should receive the largest share of healthcare. NHI will bring us closer to allocating health services according to the real needs of our people. This is not only fair, but it will help us build a healthier nation. By changing the way our country pays for healthcare, NHI will improve access to services for the majority of people.”

What is wrong with the current system?

The Health Department says South Africa’s two-tier system of paying for healthcare has failed to guarantee good quality healthcare for all.

At present the government pays for the health facilities that assist the poor, while wealthier families use private doctors and hospitals they pay for through medical aids. This two-tier system of funding locks the poor out of reach of a large number of health professionals and facilities in the private sector. NHI will create a single pool of healthcare funding for private and public healthcare providers alike. The NHI Fund will pay public and private healthcare providers on exactly the same basis – and expect the same standard of care from both. People in lower income groups will be able to consult doctors in private practice and use private hospitals, because the NHI Fund will pay for this care. The burden of care will be spread much more evenly.

What services are covered by NHI?

The NHI benefits provided will cover preventive, promotive, curative and rehabilitative healthcare services. The emphasis will be on preventing disease and promoting health. NHI is a fund that pays for health care for everyone in South Africa.

What are the impacts of national health policy?

In terms of financial protection, the model found that income levels do not have any significant impact on the possibility of experiencing financial catastrophe. In other words, NHI eases the financial issues for all income quantiles and lowers the cost of health service utilisation in general.

How will the NHI affect medical schemes?

A central issue is the future role of private healthcare and medical schemes once the NHI is implemented. The NHI Bill states that when the NHI is “fully implemented”, medical schemes will not be able to provide cover for services that are paid for by the NHI.

How much will NHI cost?

Craige Comrie, the CEO of Medical Scheme Profmed described the government’s NHI process as like building a home, without describing how many rooms there are and, therefore, it is difficult to establish what the costs are, and how you are going to finance the home.

“The NHI will probably cost more than R500 billion per year, but that is not based on any specified list of services still to be determined. It may be important to reverse the thinking and look at what is affordable within the SA context and then use that money to fund a more pragmatic set of services within NHI,” he said.

What are the challenges of implementing NHI in South Africa?

According to Ntsibeng Valerie Mukwena and Zodwa Margaret Manyisa of BMC Health Services Research, studies as well as anecdotal evidence suggest that there are challenges regarding the NHI plan implementation. These include problems such as an increase in illnesses and a shortage of personnel to drive the project in South African public hospitals.

This is exacerbated by the existing situation of most government-funded healthcare institutions, which are characterised by bad administration, insufficient budget, inadequate infrastructure, and insufficient drug supply, as highlighted in several studies.

Advantages of National Health Insurance, according to Insurance Options

• Lower overall health care costs. The government would control the prices of medical care through negotiation and regulation. And since doctors would deal only with a single government agency, there would potentially be a decrease in administrative costs.

• Remove health-related barriers to education. Children with undiagnosed and untreated health issues may not get the full benefits of education. Ideally, the NHI should create improved access to testing and health care solutions that could address barriers to learning.

• Promote equality. Access to health care should be determined by an individual’s need, rather than their ability to pay the exorbitant medical fees. With lower overall health costs and standardised services, every citizen can have access to the same level of care.

• Stimulate the economy. If the NHI can provide for preventative care, South Africa may find itself with a healthier workforce. Greater preventative care would also reduce the need for emergency room visits, which would in turn reduce the cost of medical care.

• Improve social security. Better access to health care can prevent future social issues like crime and welfare dependency. Meanwhile, the NHI may also help to support vulnerable groups like the elderly or women living in poverty, who have fallen through the cracks of the current inequitable health system.

Disadvantages of National Health Insurance, according to Insurance Options

• Healthy people pay for the sickest. US studies found that chronic diseases make up 90% of healthcare costs. According to these studies, the sickest 5% of the population create 50% of total healthcare costs, while the healthiest 50% only create 3%.

• Less financial incentive to stay healthy. Without co-payments, the general concern is that people might overuse emergency rooms and doctors.

• Long wait times. Patients may face long wait periods for elective procedures as government funds would be focused on providing basic and emergency healthcare.

• Decreased quality of care. If they aren’t financed well-enough by cost-cutting governments, doctors may cut back on care to lower costs.

• Potential for corruption. Public confidence in the state’s capacity to run large institutions is at a record low. Growing evidence of public sector corruption does nothing to breed such confidence. This is no more clearly illustrated than the financial crises gripping state-owned entities like Eskom and SAA. The new NHI bill does nothing to assuage these fears.

How do I join NHI?

To register for NHI, you must go to an officially designated registration facility. The registration facilities or centres will be announced when the registration process starts. The facilities will issue NHI cards.

IOL

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