File picture: Phando Jikelo/African News Agency(ANA).

Cape Town - The Institute for Race Relations on Friday said the National Health Insurance, as proposed in a draft law that reached Parliament this week, will serve as a vehicle for corruption and sap efficiency and innovation from the medical care sector.

The IRR said the proposed system would ensure that the state controlled every aspect of health care.

"This means the state 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," it said.

"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."

IRR said the National Health Insurance Bill failed to answer key questions, notably how much the NHI would cost, how exactly it would be funded and what benefits would be covered.

On its reading of the bill, private medical aid schemes would be restricted to covering complementary services not provided by the NHI, which risked limiting membership to the very rich because the schemes would become more expensive.

"Low-cost medical schemes and health insurance policies should be encouraged, not restricted. Tax-funded health vouchers should be provided to low-income households so that they can also afford to join these schemes or buy these policies. 

"Medical schemes and health insurers will then have to compete for their custom, which will encourage innovation, promote efficiency, and help to hold down costs far better than a massive and corruption-prone NHI bureaucracy will ever do."

African News Agency (ANA)