Dr Zweli Mkhize
Dr Zweli Mkhize

All you need to know about the controversial NHI Bill

By Karishma Dipa Time of article published Aug 10, 2019

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Johannesburg - By 2026, you may no longer be able to have comprehensive medical aid and will have to use the National Health Insurance (NHI) to cover your health services.

Medical aid schemes will only be allowed to provide you with “complementary cover” for health services, limited to the cover of services not provided by the NHI Fund. You will only be able to access specialist healthcare after using the primary healthcare system. But as the government forges ahead with its controversial plans for NHI, many experts believe the system is doomed to fail.

On Thursday, Health Minister Dr Zweli Mkhize released the National Health Insurance Bill, and told Parliament the local healthcare industry will be governed by the bill. This promises to bring universal health coverage to all those in the country within the next seven years, he said.

By 2026, every citizen, permanent resident, refugee and individuals falling into specific categories of foreign nationals “agreed upon” by the ministers of Health and Foreign Affairs, will be able to access core health services.

But many believe this will be at the expense of South African taxpayers, who will be footing the bill for the NHI, at a cost projected by National Treasury of around R256billion.

One of the main sources of contention has been how the NHI will be funded.

Dr Anban Pillay, the Department of Health’s deputy director-general for NHI, explains: “The main source of funding (for the NHI) is appropriations which are from Parliament into the fund and the chief sources of income for the appropriations are general tax revenue; funds that may be shifted from the provincial equitable share and conditional grants into the fund; a reduction of the medical scheme tax credits over time; the possible consideration of a payroll tax as well as a surcharge on personal income tax.”

While Mkize insists the NHI Fund will stamp out inequality in the healthcare sector, the DA’s Shadow Minister of Health, Siviwe Gwarube, believes it will “be nothing more than another state-owned enterprise that will be completely vulnerable to grand corruption at the expense of the nation’s entire health system”.

“The minister has sole discretionary powers over this fund and the board which is appointed by the minister, will be tasked with overseeing this fund, which means there are absolutely no checks and balances.”

Gwarube is concerned the bill “completely centralises the provision of healthcare by placing the management of all central hospitals under the national department.

“This will mean the equitable share of funds to provincial departments is reduced to finance the fund and will undeniably mean poorer health outcomes for ordinary South Africans.”

South Africans will also be inflicted by an additional tax burden if the bill is to be implemented while patient choice on which services to purchase will be removed as the department will be the sole provider of healthcare in the country. This removes competition within the healthcare industry, he says.

“‘Medical aids will cease to be useful as the model makes the state the only provider of healthcare in the country,” said Gwarube.

Meanwhile, IFP chief whip in Parliament Narend Singh argues the department should rather focus on improving the basics, such as dilapidated hospitals and infrastructure, broken hospital management systems, overworked and underpaid healthcare professionals, nursing and community healthcare worker vacancies, and a shortage of doctors, before implementing other legislation.

“‘Universal healthcare and access for all South Africans is an ideal we must live up to, but our capacity and capability is a prerequisite for such delivery,” he says.

HealthMan senior consultant Dr Johann Serfontein describes the bill as “disappointing”, “extremely vague” and “heading to be a major disaster”.

“If one looks at the Zondo Commission, it probably explains why the decision was taken to have a single fund NHI, which will have access to twice the finances of Eskom. That decision was taken 10 years ago at the height of state capture and there is no evidence for why we have to relent with a funding model that is doomed to fail.”

He is concerned about how the bill will affect the functioning of medical aid schemes. “Claims that it will contribute to sustainability and affordability are disingenuous, as we have no indications of what the NHI might cost and whether it would be affordable.”

The Institute of Race Relations is not convinced the state is up to the task of managing the country’s healthcare.

“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,” says Anthea Jeffery, head of policy research.

Pervasive regulation will stifle innovation, reduce efficiency, and promote corruption, she says. Low-cost medical schemes and health insurance policies should instead be encouraged and tax-funded health vouchers should be provided to low-income households to enable them to afford these schemes or buy these policies. “Medical schemes and health insurers will then have to compete for their customers, which will encourage innovation, promote efficiency, and help hold down costs far better than a massive and corruption-prone NHI bureaucracy will ever do.”

Despite heavy criticism of the bill, the chairperson of the portfolio committee on health, Dr Sibongiseni Dhlomo, says it will address inequality in the healthcare sector. “This is one of the equalisers of society, where those who are poor can get access to good healthcare.” - Additional reporting by Siyabonga Mkhwanazi.

The Saturday Star 

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