NHI Bill will backfire and cut healthcare funds — Discovery
The National Health Insurance (NHI) Bill will in its present form diminish the funds available for healthcare, deter investment and stymie collaboration with the private sector, Discovery CEO Adrian Gore said on Monday.
One of the most contentious aspects of the bill, passed by the National Council of Provinces last week, is the potential death knell it sounds for medical schemes. Section 33 of the bill says that once NHI is fully implemented, medical schemes will be permitted to cover only services not provided by NHI.
Those provisions have farreaching implications as they threaten the existence of medical schemes and jeopardised the sustainability of the private healthcare sector, said Gore.
“This is the choke point of whether the private sector can exist. It is the clause that determines if we can collaborate. In its current form it is not workable,” he said in a virtual briefing for journalists.
Discovery wants section 33 to be amended so that medical schemes continue to play a role, said Gore. Discovery is not alone in voicing concern about section 33, which has been criticised by stakeholders ranging from organised business to civil society organisations.
In addition to the implications these provisions have for industry players, critics say any diminution of medical scheme members’ present access to healthcare services will be at odds with the constitution. No other country in the world has legislated against the provision of healthcare services by the private sector, said Gore.
The bill lays the legislative groundwork for the government’s plan for universal health coverage. A central NHI fund is to be the sole purchaser of healthcare services, which it will procure for eligible patients from accredited public and private providers. Details of how it will be financed have yet to be spelt out but the health department has consistently said it expects to redirect the current health budget, scrap medical scheme tax credits and medical scheme subsidies to state employees and raise taxes.
The government’s assumption it will be able to redirect the entire R200bn contribution income of the medical scheme industry with tax hikes is unrealistic and it is likely to obtain only half this amount, diminishing the pool of funds now available for healthcare, said Gore. The idea that medical scheme members will be willing and able to pay in taxes what they now set aside for their medical scheme premiums he said is “simply unbelievable”.
Gore said that to raise R200bn, the government will have to increase personal income tax 31%, increase VAT from 15% to 21.5%, or institute a tenfold increase in payroll taxes.
Even if the government realises its aim of redirecting the entire medical scheme industry’s entire contribution income, all the funds now set aside for medical scheme tax credits (R28bn) and employee subsidies (R70bn) along with the entire government health budget (R233bn), this will not be enough money to provide the sort of services people have been led to believe they will get under NHI, Gore said.
There is not enough money nor enough doctors to provide a comprehensive package of benefits such as that provided by the UK’s National Health Service, to which the health department often alludes, he said.
Discovery’s latest analysis indicates that the most optimistic scenario will see a maximum amount of R531bn available to the NHI Fund, or R714 per person per month — a quarter of the amount spent by the NHS per capita when purchasing power parity is taken into account.
The bill was passed by the NCOP last Wednesday, with no changes made to the versions submitted to it by the National Assembly in June despite submissions by healthcare professionals, medical scheme industry associations, organised business and other stakeholders.
Several organisations, including Business Unity SA and Business for SA, have said that they will petition President Cyril Ramaphosa not to sign the bill into law.
Gore said Discovery has yet to decide whether to do so, too.
Health & Science Correspondent