SA healthcare going into ICU? What you need to know about the NHI Bill

President Cyril Ramaphosa will sign an unconstitutional NHI Bill into law tomorrow while there is also no indication of where the money to fund it will come from as part of the ruling party’s electioneering.

Government says the objective of the National Health Insurance (NHI) Bill is to provide universal access to quality health care for all South Africans as enshrined in the Constitution that recognises healthcare as a fundamental human right.

According to the Constitution, “everyone has the right to have access to health care services… the state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of these rights and no one may be refused emergency medical treatment.”

The NHI Bill seeks to achieve this by ensuring that:

• No one is deprived of these rights because of their socio-economic status
• One public health fund is created with adequate resources to plan for and effectively meet the health needs of the entire population, not just for a selected few and
• The ultimate goal is to achieve Universal Health Coverage (UHC).

ALSO READ: Ramaphosa finds his pen: President to sign NHI Bill into law

NHI will cover everyone free of charge, government says

Government says the NHI fund will cover South Africans of all races, rich or poor and legal long-term residents. There will be one pool of healthcare funding for private and public healthcare providers alike. The cost of our healthcare system, which is currently the most expensive in the world, will be reduced.

People will not have to pay when they visit healthcare facilities, because the NHI fund will cover the costs in the same way that medical aids do for their members. Government also says NHI will narrow the gap between the rich and poor in terms of standards of healthcare.

South Africans will no longer be required to contribute directly to a medical health scheme to get quality health care, government says, as the NHI Fund will be funded from general taxes, contributions by people earning above a set amount and monthly contributions where employers will ensure their workers’ contributions are collected and submitted like UIF contributions.

What about my medical aid?

Government also says NHI will not replace medical aid schemes and members will be free to continue with their medical schemes, but when NHI is fully implemented the role of medical schemes will change as they will provide cover for services not reimbursable by the NHI Fund.

ALSO READ: What happens if Ramaphosa finds a pen and signs the NHI Bill into law?

What are the experts saying?

Although government makes NHI sound very simple and straight-forward in the NHI Bill, there are many concerns from medical and civil organisations.

When the NHI Bill was passed in the National Assembly and the National Council of Provinces (NCOP), none of the changes asked for in submissions and public hearings were made.

Therefore, Business Unity South Africa (BUSA) nd B4SA called on the president to test constitutional integrity of the NHI Bill as he committed to do in November last year.

BUSA raised these key procedural and substantive constitutional issues in its petition to the president:

• Procedurally, parliament’s socio-economic impact assessment process was inadequate, the Nedlac process regarding the Bill was not followed through, public participation inputs were not properly considered and multiple constructive inputs from business and other stakeholders were ignored. 
  Parliament’s Portfolio Committee on Health also ignored an opinion by the parliamentary legal services, which highlighted several areas of the NHI Bill that are unconstitutional.
• The process conducted by the NCOP Select Committee on Health and Social Services was rushed, inadequate in terms of its mandate and failed to properly deal with reports submitted by the provinces.  Importantly, the NCOP Committee failed to incorporate amendments, provincial public submissions and technical flaws noted by several provinces and even the department of health itself.
• Section 33 is unconstitutional in giving the minister of health unfettered power to determine the restricted role for medical schemes, especially as this power is unnecessary for achieving the policy objectives of the Bill.  This is damaging to the private health sector as a whole and there is no rational basis for this approach. BUSA noted that the single fund model (where government will buy and pay for all healthcare services for everyone) introduces significant concentration risk and adversely impacts people’s ability to seek care in the private sector.  This is also likely to result in significant strain on the public sector. The amendments proposed by BUSA seek to allow for the role for medical schemes to be determined in a consultative process, in measured phases in a manner that is consistent with the policy objectives.

ALSO READ: Another call for president to send NHI Bill back to parliament instead of signing it

NHI Bill is unconstitutional, infringing on rights it wants to protect

• The procedures for accessing healthcare and appealing treatment denied by the NHI could potentially hinder or violate the right to access health services, making them unconstitutional.
• The NHI Bill provides for the adding of new taxes and altering tax policies, tasks that should be handled by National Treasury in a Money Bill according to the Constitution. Additionally, the Bill breaches the separation of powers by giving the minister of health judicial discretion.
• The contracting provisions in Sections 11 and 26 of the Bill are unsustainable and inconsistent with the principles of value-based care and strategic purchasing, which is the global trend for sustainable patient-centred healthcare. They focus on price in an unsophisticated manner which contradicts the Constitution’s criteria for lawful procurement.
• The roll-out envisaged in Section 57 of the Bill must be linked to milestones that are workable and relevant to South Africans having reasonable access to quality healthcare services, rather than dates which are arbitrary and unrealistic and already outdated.
• Section 58 of the NHI Bill introduces legislative changes that seem to take immediate effect but conflicts with Sections 31 and 32, leading to the immediate removal of health functions from the provinces. This affects approximately R196 billion in funding from Provincial Equitable Share allocations and Conditional Grants. The alterations to the Medical Schemes Act also contradict Section 33.
• There are conflicts with the Competition Act and the Protection of Personal Information Act

ALSO READ: ‘NHI Bill must pass constitutional muster’: Call on Ramaphosa not to sign it into law

What life under NHI might be like

Dr Paula Armstrong, senior director at FTI Consulting, who wrote a report on the macro-economic implications of funding NHI, based the figures in her report on a presentation by the department of health.

It indicated that in addition to public funds that can be allocated to an NHI fund, an additional R200 billion will be raised. She also emphasised that this is not the total cost of NHI.

R200 billion is equal to 12.8% of South Africa’s current gross tax revenue or 36.1% of personal income tax or 62.4% of corporate income tax or 51.2% of VAT.

To raise R200 billion in the current fiscally constrained environment and assuming that the number of taxpayers and their spending remains constant, she says this will require that:

• VAT increases from 15% to 21.5% or
• personal income tax rates increase by 31% across the board or
• a payroll tax on those employed in the formal, non-agricultural sector of an estimated R1 565 per month.

Armstrong says this shows that in its current form and given the fiscal situation of the country, the NHI Bill is not economically viable and a single-payer system is ill-advised in the South African landscape.