ANC adamant about implementing NHI, but three questions remain

The African National Congress (ANC) remains adamant about the implementation of NHI, with the president as well as the minister of health saying after this week’s ANC policy meeting that government will proceed with the implementation.

However, three important questions remain: how will government fund National Health Insurance (NHI), what will government do to manage and prevent illness, something that South Africans have already seen destroy the public healthcare system, and how will government prevent corruption in the health system?

“We have highlighted the social and economic value of affordable, accessible, quality healthcare that is available equally to all South Africans. We will therefore proceed with the implementation of the National Health Insurance,” Cyril Ramaphosa said.

Minister of Health, Dr Aaron Motsoaledi said the section of the NHI Act, which outlines transitional mechanisms, would be implemented “immediately”. He said this includes setting up advisory committees and amending other health-related laws to be in line with the NHI.

However, he did say that he would listen to concerns from stakeholders and help people understand the NHI. “The real poor people who are (set to be) beneficiaries haven’t spoken. Nobody is carrying their voice.”

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Doing the calculations – we might need up to R1.3 trillion to implement NHI

Funding the NHI came under the spotlight recently at the Momentum Health Solutions Healthcare Insights Summit 2024, where Damian McHugh, chief marketing officer for Momentum Health Solutions, outlined what the cost of NHI could be.

He pointed out that there is not much information available about how much the NHI will cost. The current budget for public healthcare is about R270 billion, while the cost of private healthcare claims was R230 billion, making up a total of R500 billion for the year for public and private healthcare.

“While there is a difference of R40 million, the difference of R40 million is not much, but the number of people served is materially different. You can see the inequality in healthcare just by looking at the quantity of money spent covering almost 51 million people in the public sector compared to the 9 million people in the private healthcare sector.”

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Healthcare cost per life of R21 000

If you take the money spent and divide that by the number of beneficiaries in the private sector, you get a sense of what the claims cost per life would be in the private sector. The cost per life is R21 000.

McHugh says to calculate the projected cost of the NHI’s phase one, which will focus on primary healthcare, using the cost per life for private healthcare of R21 000 as a base, 61 million people times R21 000 comes to R1.3 trillion for a national healthcare system with the same quality and accessibility as the current private healthcare system.

“There will obviously be savings, such as tax credits, which will come off the R1.3 trillion, but this is how much money will be needed if we want a similar set of outcomes regarding quality and accessibility.”

He says even if the system needs R900 billion, it is still significantly more money than we have.

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For primary healthcare only, NHI will need R360 billion

Broken down into the current private sector spread, this means 37% for hospitals, 28% for specialists and 16% for medicine, 8% for supplementary and allied health professionals, 5% for general practitioners, 2% for dentists and 2% for dental specialists and medicine dispensed.

“As phase one is only aimed at primary healthcare, we can take hospitals and specialists out of the equation, but doctors, dentists and medicine remain. If we use the private healthcare sector as a base again, we will need almost R360 billion to provide primary healthcare at private sector prices.“

Then McHugh says, there are still administration costs, managed care and wellness costs that must be provided for.

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Management to prevent fraud

“And what we really need is the ability to manage fraud. If we do not manage pre-authorisation or people abusing the system, the costs will just balloon. We even have fraudulent claims in the private sector.”

McHugh emphasises that NHI will also have to manage and prevent illness as it is not only a fund that only pays when you are sick.

“It must prevent the cost of care but the NHI Act is silent about how we will change the behaviour of ‘Oh, I have access to a doctor so let me just get a sick note’. That is not what we want.”

He says chronic care could be another drain on funds as it can result in significantly higher risk if it is not controlled. “We need this detail about the NHI or otherwise our taxes will just go up and up.”