All Aboard the NHI Train: Health minister hits back at critics of SA’s Universal Health Care plans

Addressing the Policy Dialogue on Universal Health Care in South Africa, Health Minister Dr Joe Phaahla has fervently defended the proposed National Health Insurance (NHI) reforms against growing opposition. File Picture: Jacques Naude

Addressing the Policy Dialogue on Universal Health Care in South Africa, Health Minister Dr Joe Phaahla has fervently defended the proposed National Health Insurance (NHI) reforms against growing opposition. File Picture: Jacques Naude

Published Dec 12, 2023


Health Minister DrJoe Phaahla is taking the fight for the heart and soul of South Africa’s National Health Insurance directly to its opponents, arguing that the “status quo in our health system cannot remain” and the huge disparity between the haves and have nots must be ended.

Addressing delegates at the Policy Dialogue on Universal Health Care in South Africa on Tuesday, Phaahla lauded last week’s vote by the National Council of Provinces that places South Africa firmly on the path of a National Health Insurance.

Phaahla said the reforms under the NHI aim to dismantle the two-tiered healthcare structure, notoriously known for serving the affluent minority while leaving the majority in the lurch.

South Africa's current healthcare landscape is marked by stark disparities: 10% of the population controls over 80% of the wealth, and a minuscule 1% spends more than 10% of their household budget on healthcare.

In contrast, the minister added, a staggering 86% of the population relies on a strained public sector, with only 14% regularly accessing private healthcare services.

"Our existing funding structures perpetuate this inequity. It's time for radical reforms," Phaala said.

Phaahla Lays Out The Key Elements of the NHI Reforms:

Strategic Purchaser: The NHI will act as a strategic purchaser, efficiently procuring health services from both public and private sectors. This approach aims to enhance equity, efficiency, and quality in healthcare delivery.

Single-Payer System: The NHI Fund will be responsible for all personal healthcare costs, signifying a shift from multiple payers to a single funding mechanism.

Universal Access: Everyone in South Africa will have access to quality healthcare, irrespective of their financial status, ensuring that no one faces financial catastrophe due to health expenses.

Comprehensive Coverage: The NHI Fund will cover a broad spectrum of health services, offering a continuum of care to all.

Financial Risk Protection: The reform seeks to eliminate user fees and out-of-pocket payments, ensuring healthcare is free at the point of service.

Mandatory Prepayment: Healthcare financing will transition to mandatory prepayment through taxes, moving away from voluntary prepayment models.

Phaahla quoted the UHC 2030 campaign, highlighting the essence of universal access to resilient healthcare systems centred on primary care.

However, these reforms have not been without criticism.

Phaahla said detractors focus on Clause 33, concerning the future role of medical schemes in the NHI framework.

Section 33 of the NHI Bill prohibits medical schemes from reimbursing members for health services available on the NHI once the scheme is fully implemented.

Adrian Gore, the CEO of Discovery - South Africa’s largest medical scheme - argues that Section 33 will prohibit medical aid schemes from funding most health services which will eventually undermine investment in the health sector and discourage health professionals from working in SA.

This will ultimately lead to poorer healthcare for South Africans.

The minister addressed these concerns, outlining the core elements of NHI funding and dispelling myths about the need for new funding.

Phaala made the following points:

– In 2022, South Africans spent R542 billion on healthcare, with R265 billion coming from existing taxes and the rest from private spending and out-of-pocket payments.

– The private sector's spending is significantly higher per capita compared to the public sector, revealing stark disparities in resource allocation.

– The NHI Fund, a Schedule 3A entity, will administer an increasing budget, eventually managing over R400 billion.

– Initial funding for the NHI will be redirected from existing health budgets, with a long-term plan to integrate Provincial Equitable Share into the Fund.

– Tax credits and future tax reforms are anticipated to support the NHI Fund.

Fleshing out the government’s argument, Phaahla said that about 85% of the remaining R277 billion (out of the R542bn) went to meeting the health needs of the more affluent public, entrusted to medical schemes to purchase some of their health care needs, and the final 15% of this amount was paid out of pocket.

“What did we get for this?” asked Phaahla.

“The various government departments provided care to an estimated 52.8 million people and the private schemes purchased care from private providers for the remaining 9.2 million people. If that sounds strange, it is because these numbers add up to around R5,000 per person spent in the public sector and almost R30,000 per person spent in the private sector. However, we know that members of the public usually dependent on public services do purchase some services through out-of-pocket payments, so the figures are less rounded off, but are still around R5,200 per person public spend as opposed to R27,000 per person private spend,” he said.

The minister added said the status quo in our health system cannot remain.

“We have concluded the Parliamentary process and now the task is to get everyone to rally around the reforms that are coming. We can and must redress inequity. Social solidarity is not a luxury, but a necessity. We invite everyone to be a part of the journey towards realising the unitary health system that we can all cherish,” he said.

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