Treasury reassures private sector over National Health Insurance fears
Private sector healthcare schemes will still have a role to play when the government implements the National Health Insurance (NHI) because the treasury cannot finance the system on its own.
The possibility of the NHI squeezing out medical schemes “is very unlikely for a very long time, if at all”, according to Mark Blecher, the chief director of health and social development at the treasury.
“It’s not easy to raise taxes and the role of private financing is very important in our context, and it’s very difficult for government to take on that private financing, so … we’re going to continue to see a role for private medical schemes and a multi-scheme arrangement for many many years,” he told a recent roundtable discussion on the insurance.
The government says it aims to ensure equitable access to quality healthcare and rectify the imbalances created by apartheid. President Cyril Ramaphosa signed the contentious NHI Act on 15 May 2024.
In his weekly newsletter after signing the law, Ramaphosa noted that at least 84% of South Africans use public health facilities and only 16% are covered by medical schemes that give them access to private healthcare facilities, which are often better-resourced.
But the NHI has created uncertainty in the private healthcare sector and medical aid schemes, with many saying, if they were to be excluded from providing services as feared, this would hurt the entire healthcare system because the government does not have the financial muscle to sustain the insurance fund.
Many have sought to challenge the Act. The latest is the South African Medical Association, which represents public and private sector medical practitioners. It said last week it would legally challenge the NHI, citing several flaws in the Act that could have real-world negative effects for doctors and patients.
Healthcare provision should be prioritised among the many problems the country faces, argued Katlego Mothundi, managing director of the Board of Healthcare Funders of Southern Africa, on the sidelines of the NHI roundtable.
“That’s why there have been many prescriptions about how much money should actually be spent. This recommendation from [the World Health Organisation] is that at least 8% of the GDP should be directed at healthcare expenditure. In South Africa, one could argue that we are above that threshold at about 8.5%, but it’s not equitable,” Mothundi said.
“There seems to be an attempt to exclude the private sector from being part of NHI while, at the moment, we contribute exactly what the government is contributing to healthcare. I think there should be recognition that the private sector is also part of the healthcare services.”
Blecher said private health companies should not be concerned “that they are immediately going to be impacted in a difficult or negative way”.
“The inclusion of private services as providers [under the NHI] is going to move very gradually … It’s going to be a very gradual development and the first few years is very much trying to set up the public purchasing capacity, even for the public services.”
He noted that South Africa has the biggest public health budget on the continent, accounting for about 14% to 15% of the national budget.
“The total health spending in the country is around 8% to 9% of GDP. I think it will increase over time as what normally happens with NHI systems around the world because health is just naturally a human priority and probably ultimately the biggest area of spend in the world, as it is in many countries,” he said.
“In the budget that the finance minister tabled in parliament, he attempted to raise taxes to add an additional R28.9 billion to the health sector, because the health sector has been under substantial pressure since Covid-19.”
Participants at the roundtable discussion stressed the need for more partnership and collaboration between the public and private sectors. Despite the money allocated to South Africa’s health sector as a whole, stakeholders were concerned about the relationship between spending and outcomes.
“The treasury is focused on spending reviews and spending efficiencies … and further work will be done on spending reviews,” the deputy director general of health regulation and compliance at the department of health, Anban Pillay, said in response to these concerns.
“We have to make sure that the public sector understands what it costs to deliver a service because the NHI fund is going to transfer funds based on a particular utilisation … Evidence will be developed over time and the public sector will be funded in the same way as the private sector.”