No country in the world prevents the private sector from funding and purchasing health services, said Business for SA (B4SA) and Business Unity SA (Busa) in their submission on National Health Insurance (NHI).
The business groupings have made a submission to the select committee on health & social services at the National Council of Provinces (NCOP) asking that medical aids be permitted and the NHI Bill be changed to allow the private and public sector to work together to improve healthcare.
The bill has already been passed by the National Assembly in parliament, but now is being debated by the NCOP.
Section 33 of the bill says that once the NHI is fully implemented, medical schemes may provide only complementary cover for services not covered by the fund. The bill proposes a single fund that would purchase all healthcare in the country, pooling all private and public spending.
“We are deeply concerned that the current process and version of the NHI Bill, with its attendant constitutional risks, is likely to widen health inequality rather than reduce it,” Cas Coovadia, CEO of Busa, said.
“However, we believe that with small but critical changes to the bill which allow both the public and the private sector to work together, as we did during the Covid-19 pandemic, a sustainable and affordable NHI is possible.”
The comments come as speakers at the Hospital Association of SA addressed the shortfalls of the proposed NHI single-payer model. The association is holding its annual conference in Cape Town.
Healthcare actuary Roseanne Harris, who guided the Busa and B4SA response to the bill, said there are pitfalls in having only one purchaser of healthcare. “The primary risk of a single fund model is that it is entirely dependent on taxpayers. So if the expenses exceed the revenue, then that fund is going to need to be bailed out.”
She also said having a single purchaser would mean the government would set the price for all doctors, health workers and hospital services, resulting in a “single dominant purchaser dictating the terms”.
“That’s an extremely aggressive approach that’s causing a lot of anxiety among healthcare professionals and, of course, among those who need to invest in our healthcare market.”
Simon Strachan, CEO of the Private Practitioners Forum, representing specialist doctors, said at the conference that remuneration for healthcare has to be “acceptable to people who are providing that service”.
Analysis done for Busa and B4SA by FTI Consulting on how to finance the NHI showed the government would need to increase VAT from 15% to 21%, or raise personal tax by about a third, or a payroll tax would need to be more than R1,500 for every employed person outside the agricultural sector. This is to fund an estimated R200bn annual shortfall.
FTI economist Paula Armstrong, who did the analysis, said the huge increases in taxation while SA’s tax base is declining would not be viable.
One proposal is to allow the “missing middle”, who have jobs but do not have medical aids, to buy low-cost medical aids. This would improve access to care and reduce the burden on state clinics so they could help the most vulnerable patients.
Coovadia urged the NCOP to make changes to the NHI Bill. “SA’s healthcare system has much to gain if we get this right. It is essential that we do.”
Correction: September 19 2023
In an earlier version of this article we incorrectly referred to FTI economist Paula Armstrong as her colleague Nicola Theron.
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