‘NHI hopelessly unworkable’: BLSA says health sector getting worse with no recovery in sight

The health sector is getting worse without the prospect of recovery and the National Council of Provinces passing the National Health Insurance (NHI) Bill into law last week is a shocking negative, says Busi Mavuso, CEO of Business Leadership South Africa (BLSA).

She said the NHI decision comes after government and the private sector joined hands and made progress to fix Eskom in 2023, while there is still urgency to tackle the logistics crisis centred around South Africa’s ports.

Mavuso says in her weekly newsletter that the NHI Bill is hopelessly unworkable and will never be implemented. “Yet the pretence of trying to make it work is doing serious damage. It has created uncertainty for the health sector, leading to delays in investing,” she warns.

“Medical professionals, who can work anywhere in the world, face yet another reason to exit. Serious damage is being done to the private as well as public health systems as a result as government attempts to set up a single payer fund to acquire all significant health services in the country, effectively destroying the private health system in the process, without any plan on how capacity will be created in the public health service.”

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NHI Bill is unworkable and unconstitutional

She also points out that the National Council of Provinces (NCOP) passed the NHI Bill last week completely unaltered from earlier drafts, despite extensive representations from many parties, including business, on how unworkable and unconstitutional it is.

“The tragedy is that business put together a proposal on how the bill could be amended to deliver on its aims of universal health cover by drawing on the strengths of both private and public sectors. We know it can work as the Covid crisis showed how the public and private sectors can work together to deliver health services effectively through our joint effort in the vaccine rollout. But the NCOP ignored those representations.”

Mavuso says as the bill now sits before the president for his signature, there is still opportunity to change course. “It would be a tragedy if we undermine the good work business and government managed to achieve together by weakening the health system, forcing not just health professionals to emigrate but also the many businesspeople who would lose faith that they and their families can rely on access to healthcare.”

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Progress and setbacks in 2023

She says 2023 was a year when she was struck by the progress as well as the setbacks that organised business faced in its efforts to help put the country on track to deliver the economic growth so desperately needed.

“The new partnership established between organised business, represented by Business for South Africa and government represented by the Presidency was a highlight of the year. This established three workstreams to deal with the energy crisis, logistics crisis and crime and corruption. Certain initiatives within those streams are now making good progress.”

Mavuso regards the fact that the electricity crisis is now on its way to resolution thanks to the extraordinary amounts of investment the private sector is pouring into new generating capacity and the work business and government have done together as the clearest win.

“We can certainly do more and faster, but the regulatory space that was opened up for private generation meant that the private sector now invests. In 2023, Nersa received registrations of 4.1GW of new generation, adding to the 1.7GW of registrations last year. Around R111bn of investment is going into making that happen.”

She says that capacity is gradually coming on stream, adding around 20% to the country’ s total working generating capacity, while a significant amount of small-scale generation was also added from households to small businesses that took advantage of tax incentives and the falling cost of solar energy to install their own panels (which some estimate at over 4GW).

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Economy grew somewhat despite load shedding

“We have already seen the improved resilience of the economy to load shedding to the extent that, despite record levels of load shedding this year, the economy still managed to eke out some growth. It has not all been positive with constant delays in the Renewable Energy Independent Power Producers Programme a clear problem.”

Mavuso laments that the programme has gone from the envy of the world in effective power procurement to barely managing to procure any new electricity this year. “Some are declaring the end of the programme, but its role in acquiring new utility-scale electricity production remains important.”

She points out that progress must also still be made on the unbundling and establishment of an independent system operator out of Eskom and publishing an updated Integrated Resource Plan that sets out a rational cost vision for energy development in the country for the future.

“The unbundling of Eskom requires the completion of the Electricity Regulation Amendment Bill currently before parliament among several steps that must be made to get the independent grid operator up and running.”

The appointment of new Eskom CEO Dan Marokane provides an opportunity to accelerate the process of establishing the grid operator and improving the performance of Eskom, she says. “Business and Eskom established a good working relationship that allowed us to, for example, fast track the return to service of Kusile units 1 and 3. Together I believe we can achieve much more to consolidate the country’s escape from the power crisis.”

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Tackling the logistics crisis

However, Mavuso says, on the other side of the balance sheet, the logistics crisis emerged as the next major challenge for the economy, with sharp reductions in the volume of materials that can be moved across the rail network and through the ports for export.

“This is critical to the whole economy that now struggles to get goods into or out of the country. There are many reasons, from theft and vandalism to poor maintenance, but the impact is now clear in our economic growth numbers which are showing falling sales and production of commodities and other goods due to the crisis.”

She notes that it is good news that there has been more urgency in tackling this crisis, with a strong joint effort through the National Logistics Crisis Committee. “Learning from successes in the electricity sector, the committee drew up a road map that will see major participation by the private sector in logistics.”

Some steps toward this have been made, including a process to concession the Durban container port terminal, but this needs to accelerate, including allowing the private sector to operate certain rail corridors, she says.

“Task teams are already working to improve performance of key lines and we are starting to see some successes, although more could be done. Chief among those is the appointment of a new leadership team at Transnet that is committed to the roadmap, after the resignation this year of the CEO and several other executives. While I think we can say that we broke the back of the electricity crisis in 2023, I hope to be able to say the same of the logistics crisis in 2024.”