A recent article in the Sunday Times “Better not to know
total NHI cost” is reflection of the Minister of Health being totally
disingenuous and denialist of what is required in South Africa’s aims to
achieve Universal Health Coverage (UHC).

Although the World Health Organisation (WHO) is alluded to
in the White Paper as cautioning that while costing assumptions and scenarios
may be useful for raising core policy issues regarding the sustainability of
reforms, it is not useful to focus on getting the exact number indicating the
estimate costs. The WHO, however, clearly states in the quoted document that
costing assumptions and scenarios may be useful for raising core policy
issues regarding the sustainability of reforms. It is a concerning failing
to assume that one does not need to do a costing of the NHI in order to
implement it, as affordability cuts to the core of the implementation potential
of the policy.

 Radically overhauling the entire system is definitely
a core policy issue, which needs to be considered. The original NHI Cost
projections were based on state care costs in 2010. That was inflated up to
2026. So, it is not a “thumb suck”, as the Minister has previously stated, it
is what state services will cost in 2026, irrespective of whether NHI gets
implemented or not. So, South Africa will face this funding shortfall in state
care by 2026. What the estimate failed to consider was the private sector
spend, which equals the public sector spend, even though it covers a smaller
portion of the population. One cannot, however, assume you can render services
to the private scheme population without incurring any additional spend, no
matter how you structure the system.

The quoted Irish example is painfully relevant to SA, and
the same costing and scrapping exercise should be happening here. Instead, we
keep denying that we should do a costing and carrying on with planning. NHI is
purely a political ideology which cannot be practically implemented. If one
approves the NHI Bill, the project is set in motion, without any idea of future
costs. That is a failure in due diligence. There will be massive costs
in setting up the administration of the NHI Fund in offices and staff costs,
which South Africans will have to fund, irrespective of whether NHI is ever
fully rolled out or not. The NHI fund will be a state payment body, twice the
financial size of Eskom. The three state bodies currently fulfilling a similar
role to the NHI Fund (i.e disseminating government funds to the population in
one form or another) are SASSA, the RAF and the Compensation Fund. All three
are in a dire financial and administrative state and assuming that the NHI fund
will be any different is obtuse thinking.

 If we can do a costing exercise now and
realise that NHI in its current format is unaffordable, we can start looking at
alternatives. But there is a lack of political will to do this.  South Africa
has 8.8 million medical scheme beneficiaries who currently pay for their own
healthcare at minimal expense to the state, and 5.7 million taxpayers. NHI
wishes to have healthcare for everyone funded by 5.7 million taxpayers,
including healthcare of the 8.8 million people currently self-funding. If one
takes state employer subsidies and tax credits out of the equation, South
Africa would have to raise an additional R105 billion in taxes annually to
replace the voluntary private spend which is currently the norm.  

 The Minister’s indication that private prices are
inflated, was the reason for the establishment of the Health Market Inquiry.
The one glaring absence in their interim HMI report, was an
indication that private healthcare is costly due to provider tariffs being too
high. Utilisation is driving costs, because the population is getting sicker
and older. The medical scheme population grew by 0.67% in the last three years
and the number of pensioners by 14.4%. South Africa therefore faces a
utilisation crisis and a different systems design is not going to reduce the
costs of the private sector by 30%. If services are purchased from the private
sector at rates that are not reflective of the costs of running the system, the
system will not continue to function. While doctors can work longer hours to cover
costs when seeing patients at lower rates, this saving is limited by the
available hours and reflects the assumption that private doctors are not
already working very long hours and close to full capacity.

 Countries with single payer UHC models all have large
tax bases and co-payments (along, of course, with massive waiting times for
service). The research provided by DoH does not explain why South Africa
decided on a single payer model. What does explain it, is current testimony in
front of the Zondo Commission. Did we create a healthcare funding model to
ensure easy central access to the contained funding for politically connected
individuals, who were busy expanding a business empire into healthcare? We need
a South African solution for a uniquely South African problem, which includes a
much more pragmatic approach and recognition that the administration expertise
that would be required by an NHI Fund does not exist in government. The shining
ray of hope at this stage, is the announcements by the Finance Minister, who is
painfully clear in admitting that there are no public funds for any large
projects, including NHI.

 South Africa needs to increase the size of medical schemes
by making membership mandatory for employed individuals. If SA can mandate
minimum wage, medical scheme membership should follow the same route.
Increasing voluntary health spend in the private sector, will reduce the burden
on the public sector, creating an opportunity to improve quality. It will also
reduce the costs of private healthcare premiums by 20%. The reasons given for
NHI? To reduce costs in the private sector and improve quality in the public
sector. This explains the lack of political will to fix the current system,
because a repaired system will negate the need for NHI, which is purely a
political ideology and not a pragmatic attempt to address the issues in SA

Johann Serfontein is a Healthcare Consultant and published novelist, under the
pseudonym Jean Cerfontaine