The NHI Is Headed For Disaster

Concern over the government's planned National Health Insurance scheme is reaching fever pitch. Here are the top reasons why South Africa is headed for a catastrophic derailment.
Jason Snyman
2018-08-24

We’ve spoken a little bit about the government’s planned National Health Insurance (NHI) scheme before. Back in June, Minister of Health, Aaron Motsoaledi, revealed the National Health Insurance Bill and the Medical Schemes Amendment Bill. Though neither Bill really offered any concrete details on how the scheme would be implemented or even funded, the announcement had South African doctors up in arms and ready to leave the country.

That’s just the tip of the iceberg, and the problems surrounding the NHI run far, far deeper. The new legislation is designed to create greater access to medical healthcare for all South Africans, but will require a massive industry shakeup on every level – from government to the private healthcare sector.

According to the Solidarity Research Institute, there are a number of big concerns surrounding the new scheme which all South Africans should know about. Here they are, in all their nightmarish glory.
 

Funding

The costs associated with the NHI in the white paper have been understated, and it’s expected to negatively impact the taxpayer on a massive scale. Morné Malan, one of Solidarity’s researchers, has stated that the government’s total tax haul is sitting at just over R1 trillion – and over a third of that would have to be allocated to the NHI.

It’s unlikely that South Africa will be able to cut on expenditure anywhere else, so if not funded by the taxpayer, how?

“It will take as much as 70% of personal income tax, or even as much as 99% of the income through value added tax (VAT) to provide for the deficit,” said Malan.

In order to continue funding what we’re already funding and provide the shortfall concerning the NHI, VAT would have to be increased. According to Solidarity, the government will need to find an additional R369 billion in tax by 2025, with R156 billion required every year to keep the show going.

Motsoaledi himself has even come clean and admitted the cost estimates to be wild speculation. The government has no idea how much this is going to cost.
 

(Mis)Management

The NHI offers an uncomfortable amount of room for government incompetence. As currently envisioned, it will become the largest state institution in the entire history of our country. We don’t need to look very far (SABC, SAA, Eskom) to see why this is a terrible idea.

With a track record of such astonishing mismanagement and corruption at parastatal enterprises, we should be very, very worried.

The state will also be the sole purchaser and manager of assets, medication and equipment – with no indication as yet of how this will be handled. There is certainly potential for disaster, as we also don’t know who will be maintaining the equipment or infrastructure.

With absolutely everything being channelled through one central body, we can expect massive delays in orders, repairs and shortages as well. Just look at the state of the Post Office, for example.

There is no incentive for hospitals or private practitioners to maintain any equipment that they haven’t funded themselves. We’ve already seen the results in public hospitals, and one of the greatest concerns is that the private institutes will go the same way. Public hospitals are in an abysmal state, and it’s all due to lack of skills, lack of funding, lack of staff, lack of management and a lack of health policy compliance. The shocking truth is that the vast majority of our hospitals are far more likely to kill you than save your life. 

State Control

There are a couple of problems here. With the above in mind, healthcare providers will have no choice but to work in the public sector. The rates which private practitioners could charge will be determined by the NHI, and this has resulted in some of our best doctors threatening to take their skills abroad.

Though this system will create an even playing field, with equal pay, it leaves little incentive for providers to actually perform. Why work harder, why be better?

Then, SA’s 33 000 private healthcare providers will have to be accredited by 2025, which provides further headaches. We don’t know how this process will be rolled out, and with so many providers pushing against it, it’s shaping up to be a catastrophe.

The medical aid industry, in particular, will suffer massive losses with the abolishment of brokers, co-payments, prescribed minimum benefits and a host of other changes in the pipeline. Finally, it also presents a bit of a Constitutional quandary – as the NHI will be compulsory for all South Africans, and we’ll all have no choice but to pay for it. 

Efficiency

Qualified medical workers are hard to come by these days, as it is. So, not only are we looking at losing some of our best doctors, but the patient load will no doubt increase as well. SA is laden with disease due to the Tuberculosis and HIV epidemics of the past and present. With private hospitals now forced to open their doors to the greater population, they can expect dramatic increases in patients, and therefore deterioration in the treatment of these diseases.

The Department of Health has voiced plans to change the way Emergency services will work, as well as removing teaching hospitals at a provincial level and shifting the training over to a national level instead. Of course, that’s also the only information they have revealed.

Nobody knows how it will change, where the training will take place or how many people will undergo this training.

According to Solidarity, an estimated 25% of medical professionals who complete their training in South Africa leave the country. As it stands, 1 200 doctors are trained per year in eight medical facilities.

We need a further 83 000 healthcare workers to meet requirements, and filling those empty posts will amount to a cost of R40 billion.