The National Health Insurance (NHI) Bill in its current form will diminish the funds available for healthcare, deter investment and stymie collaboration with the private sector, Discovery CEO Adrian Gore said onMonday.
One of the most contentious aspects of the bill, which was 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 once NHI is fully implemented, medical schemes will only be permitted to cover services that are not provided by NHI.
Those provisions had far-reaching implications as they threatened 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 to journalists.
Discovery wanted section 33 to be amended so that medical schemes continued to play a role, said Gore.
Discovery is not alone in voicing its concerns 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’ current access to healthcare services would 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 achieving 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 would be able to redirect the entire R200bn contribution income of the medical scheme industry with tax hikes was unrealistic and it was likely to obtain only half this amount, diminishing the pool of funds currently available for healthcare, said Gore.
The idea that medical scheme members would be willing and able to pay in taxes what they currently set aside for their medical scheme premiums he said was “simply unbelievable,” noting that to raise R200bn, the government would have to increase personal income tax by 31%, increase VAT from 15% to 21.5%, or institute a 10-fold increase in payroll taxes.
Even if the government were to realise its aim of redirecting the entire medical scheme industry’s entire contribution income, all the funds currently set aside for medical scheme tax credits (R28bn) and employee subsidies (R70bn) along with the entire government health budget (R233bn), this would not be enough money to provide the kind of services people had been led to believe they would get under NHI, Gore said.
There was 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 indicated the most optimistic scenario would 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 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 they will petition President Cyril Ramaphosa not to sign the bill into law. Gore said Discovery had yet to decide whether to do so, too.
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