The Treasury has issued a scathing assessment of the government’s slow progress in implementing National Health Insurance (NHI), saying the ANC’s flagship plan for achieving universal health coverage is unlikely to require significant funding anytime soon.
NHI aims to ensure that everyone can obtain health services free at the point of delivery, but more than 10 years after the plan was signed off by the ANC at a policy conference in Polokwane, it has yet to be implemented.
Key legislation that paves the way for the establishment of a fund that will pay for health services was submitted to parliament more than two years ago, but the NHI Bill is still being considered by the portfolio committee on health, and the government has yet to publish up-to-date costing estimates for the programme.
“At present ... there is insufficient capacity in the health sector to work substantively on NHI. The NHI indirect grant has been underspent, the NHI fund has not yet been established and the NHI Bill still needs to be passed by parliament. It is therefore unlikely that NHI will be a significant cost pressure in the medium term,” the Treasury said in the medium-term budget policy statement.
A previous costing of the NHI policy estimated it would require R40bn a year in additional funding over the first five years, and perhaps more over time, the Treasury said.
“The existing provisions for NHI, including the conditional grant, have not been spent. The movement isn’t there,” the Treasury’s acting head of the budget office, Edgar Sishi, said.
“It is unlikely that will change because [it requires] some fairly significant institutional arrangements to occur in the health sector, and that is nowhere near happening at this point,” he said. “Money can’t just move.”
The health sector has consistently underspent conditional grants earmarked for NHI, even before the pandemic slowed spending on many government programmes.
In the 2020 budget, for example, the Treasury shifted R1.4bn out of the NHI indirect grant, which funds the majority of NHI projects. At the time, the Treasury said the cut was due to slow spending on contracting with general practitioners, mental health services and oncology services.
Similar cuts were imposed in 2019 when the Treasury moved R2.8bn in unspent NHI funds to the provinces so that they could fill critical posts.
The medium-term budget policy statement now sees the Treasury cutting R308.4m from the NHI indirect grant, trimming its allocation for the 2021/2022 financial year from R1.34bn to R1.03bn.
The February budget allocated R7.5bn to the NHI indirect grant over the medium-term expenditure framework. This included R986.3m to fund the contracting of healthcare services, R2bn to strengthen the health system in preparation for NHI, and R4.4bn for infrastructure projects.
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