The National Health Insurance (NHI)


In June 21, 2019 a set of legislations which will give birth to a universal healthcare system in South Africa was officially announced by Minister Aaron Motsoaledi. Two draft bills were presented on this day for which the public could comment further. Firstly it was the National Health Insurance (NHI) Bill  which will affect how public health coverage works and secondly it was the Medical Aid Schemes Amendment (MASA) Bill which will affect Medical Aid Coverage.

The new bills can be found here. View the National Health Insurance bill here and the Medical Aid Schemes Amendment bill here

The bill provides for the establishment of an NHI fund as a public entity reporting to the minister of health, to be governed by the Public Finance Management Act. It will be delivered in phases and some of these phases may take up to 10 years but it is expected to fully kick-off by 2026, the year where central purchasing will start. A national hearing on the NHI bill has been carried out across all provinces and based on results, the nation is awaiting a final draft of the bill. But for the time being, let’s talk about the NHI

Why the National Health Insurance?

Health is a fundamental human right according to the constitution (section 27). Therefore everyone should have access to healthcare services and no one may be refused emergency medical treatment irrespective of their socio-economic status. The National Health Insurance essentially seeks to provide Universal Health Coverage (UHC) for all.

How will the NHI be Funded?

The principle behind the existence of the NHI is that The rich will subsidize the poor, the young will subsidize the old and the healthy must subsidize the sick said the Minister.

“Currently, it’s the opposite. At present, the poor subsidize the rich and we will attempt to show that”

Only 10 % of South Africans could afford what was being charged in private healthcare, he added.  Therefore, only those earning above a set amount will be required to contribute. Those earning below this set amount will not contribute directly.

In line with the above NHI will pull its funds from:

  • General taxes
  • Contribution from people earning a certain amount of income
  • Monthly contributions made by employees

Who can have access to the NHI?

All South Africans and legal residents will have access to a defined package of comprehensive health services.

Asylum seekers and undocumented immigrants can only access emergency services and services for “notifiable medical conditions” such as TB and HIV as it’s in the best interest of the country to prevent spread. However, registered refugees will have full access to NHI services provided they register for such services.

NHI will also provide care for “individual foreign nationals” as determine fit by the minister of home affairs and in consultation with the minister of finance.

Effect of NHI on medical aid schemes and private health providers

The NHI will purchase health care services, medicines, health goods and health-related products from certified, accredited and contracted service providers on behalf of the public.

No medical aid scheme or private health provider may offer any of the services that the NHI will offer once implemented. This means you can still go on to have a private health cover for complimentary services which the NHI will not be offering.

What services will be covered by the NHI?

It is not yet clear what services the National Health Insurance will offer. It simply states that it will provide “comprehensive healthcare services”. This will include family planning, vaccination and screening services which are not offered or paid for by schemes under the current system. However, it will not pay for any treatment if the healthcare provider can demonstrate that:

  1. No medical necessity exists for the healthcare service in question;
  2. No cost-effective intervention exists for the healthcare service as determined by a health technology assessment; or
  3. The healthcare product or treatment is not included in the Formulary, except in circumstances where a complementary list has been approved by the Minister.

Traditional healers however cry that the bill is silent about them and demand to be included as there are individuals who prefer such services than hospitals or clinic. Demand will be reviewed by the parliament.

Some facts and features about the National Health Insurance

  • It will be compulsory for all South Africans even if you opt for a private healthcare provider.
  • You will not be able to go to a specialist except upon referral from an NHI-accredited primary healthcare facility
  • There will be no co-payments. Every cents charged to the patient will be settled by the scheme
  • Healthcare brokers will be eliminated in the scheme. All money will be directed straight to the treatment of patients
  • Medical aid will have to “pass back” savings in the form of premium reduction. Currently, medical aid providers will restrict the use of specific service providers or services in order to save money. Medical aids however should not be for profit.
  • There will be no penalty for late joining
  • School health will be a center for the scheme where children will be screened on regular basis and provided with free glasses, hearing aids, speech therapist among others. It will be better to attain to these children than to allow the diseases to pull them to a clinic.
  • A central beneficiary registry containing the age, disease and geographic profiles but not the personal information will be created to allow the Registrar of Medical Scheme to understand trend and behavior in consumers when selecting a medical aid scheme.
  • No benefit options will be implemented by medical schemes except approved by the Registrar of the Council of Medical Schemes.
  • Young medical students will be allowed to diversify their expertise. This will mean greater employability and more services provided to the nation.
  • The cost has been estimated to over R250 billion per year.

Some criticisms about the NHI

  • The NHI claims to be sustainable and affordable. However its exact cost is not known except estimates of more than R250 billion. Many however argue that it’s impossible to claim that a process will be sustainable and affordable if you cannot project its cost and how it will be funded. Again, the NHI will pull funds from private and public sectors and may require the creation of state own enterprises for sustainability. If the NHI wants to be sustainable, then it should prove that it can fund itself on the current budget. Apart from the exact cost, an exact process or technicalities required to implement the NHI is not clear.
  • Undocumented immigrants and asylum seekers are allowed access to emergency services only. What will happen if such a group of individuals are mentally ill and cannot have access to healthcare coverage. Will it not cause harm to themselves or to others? Hence a socio-economic burden? What about other socio-economic burdens such as violence, human right violation, war crimes or genocide? Will these individuals be excluded? For the NHI to be universal as it claims, it must be accessible to everyone irrespective of their immigration status. This will be a measure to ensure social justice and to consolidate integrity into South Africa’s Pan-Africanist rhetoric.

The system is monopolized

All funds will be pulled into the NHI fund and the fund will be the single public purchaser and financier of health services in the country. Again the minister of health governs the entire structure. Such a monopolized central control has created fear and uncertainty and could pose problems as follows: 

    1. Mismanagement of the NHI fund could irreparably damage the healthcare system
    2. Mismanagement can otherwise overcrowd and strain the NHI. The end result of which could diminish access and quality standards.
    3. NHI is nationalized and will eventually eradicate medical aid. What will happen if the NHI is not sustainable? Healthcare system will collapse.
    4. The Minister of Health can fire and hire anyone. This is a recipe for corruption, bad governance or political interference.

    The NHI could avert such a monopoly and implement decentralized competing markets just like the NHS (The British National Health Service which once aimed to implement a monopolized universal health system). Such a system was put in place to overcome the poor outcomes of the NHS.

    Decentralizing the NHI by transferring management and administration could create public trust

    The Public sector has repeatedly fail

    The government is blaming the private sector for poor health outcome the country has experienced and in so doing it is trying to create a populist view about the NHI. However poor healthcare delivery could be a consequence of the government’s own repeated failure for reasons being that:

    • It failed to regulate the private health sector according to the Health Market Inquiry (HMI). This negligence is what has cause exorbitant cost in healthcare and because of lack of regulations it was clear that the government could not compete neither could it have been efficient in managing its resources.
    • Furthermore, the private sector has offered the public sector huge discounts on large-scale purchase of healthcare materials or medicines through tenders. It then obtains a reasonable profit margin with higher prices from the private sector. It’s a win win situation.
    • Besides the wealthy has always reduced the burden on the public sector by paying their tax.

    The public sector is inefficient in many ways:

    • More than 70 % of healthcare budget is spent on personnel. This takes away funding for medicine and machinery
    • Again, there is a poor supply chain and structural inefficiency
    • Also, it pays specialists to do jobs which can be done by nurses. This is expensive.
    • Some doctors work both in the public and private sector and hence may be having conflicting schedules.

    More Concerns….

    • What services and products will be in the NHI package and how will they be determined as necessary? What will be the cost of a package? Some treatments are very expensive such as cancer treatment. How will the NHI carter for the poor without limiting their access to such services?
    • Many want the NHI to work together with private healthcare providers and should allow people to choose freely between the NHI and private medical cover while providing regulations on both. Again, the NHI has not elaborated how healthcare workers will be able to collaborate with one another and on how referrals will be implemented.
    • Poor healthcare infrastructures, poor service delivery, insufficient resources or shortage of staffs are some of the challenges the NHI will have to fix. Infrastructures will have to be upgraded to make sure they all meet standards and more staffs added to make sure a healthcare worker is not overworked or abused by the scheme. Ambulances will have to be made available to transport you to wherever you will need care. Transportation or transport fair should not interfere with healthcare.
    • Many have been paying medical aid premiums in the past and some have families of up to 5 members all of which have being paying medical aid premiums. With the introduction of this bill, they will be forced to pay additional fee into order to be part of the NHI. What will happen to their premiums and all their efforts to get quality healthcare for their families? What happens if the NHI fails to meet their expectations?
      • A system will have to be put in place to compensate nurses and healthcare practitioners as a means to maintain quality.

      • The era of 4th industrial revolution and artificial intelligence is at hand. This is causing large amount of data flow. How will the NHI ensure user privacy or data protection? Does it have the necessary technicalities?

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