Discovery has flagged the implementation of National Health Insurance in its current form as the second-biggest risk facing the group, second only to the global rising cost-of-living crisis and higher than SA’s energy constraints.
In its annual report published on Wednesday, the Adrian Gore-led group said inputs of healthcare professionals, who are core and essential to the delivery of care, were not given the appropriate weight and attention in the drafting of the bill.
“The current version of the bill states that once NHI has been fully implemented, medical schemes may only offer complementary cover to services not reimbursable by the NHI Fund. Universal healthcare is crucial and the NHI is a remedy to achieving this. However, we are of the view that the NHI is not workable without private-sector collaboration,” Gore said in a letter to shareholders.
“Funding the additional healthcare spend required for NHI through tax increases on a small base is not sustainable. Further, even with this additional spend, total healthcare funding would still be insufficient, and would result in the medical scheme population paying more tax and getting substantially less healthcare. The resources of both the public and private sectors are needed to deliver universal health coverage, and changes to the current version of the proposed bill could facilitate this collaboration.”
The bill has been approved by the National Assembly and is currently before the National Council of Provinces (NCOP) for consideration before formal parliamentary sign-off and presidential promulgation.
Discovery said it was concerned that NHI’s funding remained unclear, as input from the Treasury and the supporting money bill had not been disclosed or debated.
“We do not expect significant changes for medical schemes and private healthcare in the foreseeable future. According to the department of health, the full NHI will most likely only be fully implemented in more than a decade due to the funding-related issues, the complexity and the need for substantial investment into the overall healthcare system,” the JSE-listed group said.
“It does, however, introduce a short-term risk of negative sentiment among medical professionals. This could lead to a skills gap in an already constrained healthcare system.”
Discovery Health is SA’s leading medical scheme administrator, managing 39.1% of the total membership of SA medical schemes, including Discovery Health Medical Scheme, the country’s largest open medical scheme, now representing 57.8% of the open medical scheme market.
The group said it supported the proposed low-cost benefit options (LCBOs) to be introduced into medical schemes.
“We are hopeful and remain engaged in support of the introduction of LCBOs, which would materially improve healthcare access and affordability for many employed but currently uninsured South Africans. We believe this will also improve productivity for these employees, over and above the uplift in acute and preventative care. We await the regulatory developments needed to enable the introduction of LCBOs,” it said.
Business Day reported earlier in October that Ashburton Investments, the asset management business of FirstRand, had flagged several domestic factors including the implementation of NHI, that it said posed a risk to the government’s balance sheet.
“Intentions around launching an NHI that will be an unpalatable burden on the fiscus and debt overhang of municipalities are issues that pose risk to the sovereign balance sheet, if we look beyond the Medium-Term Expenditure Framework, at a time when the commodity cycle is no longer accretive from a corporate income tax take perspective.”
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