Government is now grasping at straws to garner support for its ill-conceived NHI plans. The much- publicised visits of the group of “Elders” to speak in support of NHI, was yet another marketing drive for NHI. What is extremely concerning, is that a country like Norway, which collects 42.5% of GDP in taxes, is advising South Africa that NHI is affordable to pay for, using taxes. This despite fact that South Africa only collects 25% of GDP in taxes. The Davis Tax Commission, which was comprised of highly skilled South African tax experts, indicated in 2017 that South Africa could not afford NHI until sustainable growth of 5% is achieved. The expert Davis Commission report was swept under the carpet and the Elders’ views are shouted form the rooftops. Cheap politicking at its finest.
What South Africa needs is policy certainty in healthcare, so that investors in healthcare companies can take an informed view. Investors in private practices, the specialists and other healthcare practitioners who are going to be called on to render services to NHI, need to know if they will be able to cover their practice costs and continue providing a sustainable service. The implementation process of NHI is going to be key. There are three potential scenarios for implementing the system. The first is by establishing the fund and starting to buy private services to address the backlog in the state. This does not require a massive overhaul of the system and can be sustainably done for decades. It will probably be the end result of all the NHI rhetoric, as it is the only solution which arrives at some form of private access for state patients, which won’t destroy the healthcare system.
The second scenario is the ‘big bang’ approach, where NHI is implemented in full, all across the country, as described in the Bill. This would require government to ensure that all 3800 government clinics and hospitals comply with the required quality standards in order to contract with the NHI.
Currently, less than 30 are compliant with Office of Health Standards Compliance (OHSC) quality norms, despite five years of health strengthening initiatives by the Department of Health. Government indicates that the facility standards are improving, but the annual OHSC inspection results consistently show that this is not the case. The damage done to the private funding industry with this “Big bang” implementation approach will be very difficult to turn around and state facilities, which would be registered as Schedule 3B public entities under NHI, will have no form of provincial income to pay staff and expenses. A rapid turnaround plan would have to be implemented to bring these facilities back into provinces and re-allocate the provincial equitable share in order to keep the clinics and hospitals open. Such a plan is unlikely to be rapid enough to save the hundreds of thousands of jobs which will be lost in this process. The plan would also require 40 000 to 70 000 private practice facilities and hospitals to be inspected an accredited by the OHSC prior to the implementation. The OHSC is currently wholly understaffed to do this and their 65 inspectorate employees would probably have to be increased to 1400 to do these inspections. Their inspectorate budget would concurrently need to be increased from R47 million to R1.4 billion within the next six years. This, almost 3000%, budget increase for the inspectorate, is highly unlikely to happen within the allotted timeframe.
The third scenario is a stepwise implementation, one district at a time, as Dr Anban Pillay, the DDG of NHI suggested. This would mean that instead of a two-tier system, we would then have a three-tier system. NHI type funding in one district, equitable share type funding in the district next door, and private medical scheme funding alongside. We would therefore be utilising two sets of laws and three funding models concurrently for the entire period it might to take to integrate all districts into the NHI system. Such an interim arrangement might allow for private providers to provide services at below cost rates into the model, due to medical scheme cross subsidisation of costs. Should it eventually expand to the entire country, the medical scheme cross subsidisation of practices would stop and tariffs would have to be increased, or large numbers of practices might be forced to shut down due to below cost income streams derived from NHI.
Government is caught between a rock and a hard place. They need to appear to be on a road to implement NHI, but in the back rooms, they are sitting with the headache described in the scenarios above, making full implementation impossible. The question is ultimately how much of the healthcare system is destroyed while they reach that conclusion and how many healthcare practitioners are scared out of the country in the uncertainty created by this un-implementable policy.
Dr Serfontein is a Healthcare Consultant to SAPPF, a member of the Free Market Foundation Health Policy Unit, and an award winning novelist under the nom de plume, Jean Cerfontaine.