SA’s leading private hospital association has asked the high court in Pretoria to declare the ANC’s controversial National Health Insurance Act unconstitutional, and unlawful and set it aside.
In its application the Hospital Association of SA (Hasa) hones in on the financial implications of National Health Insurance (NHI) and challenges health minister Aaron Motsoaledi’s assertion — made in response to a separate legal challenge brought by trade union Solidarity — that the scheme did not need to be costed before implementation. It cited the minister of health, the minister of finance and the president as respondents.
The act is intended to bring into effect the ANC’s ambitious plan for universal health coverage, which seeks to provide care that is free at the point of delivery for eligible patients, regardless of their socioeconomic status. It contains sweeping reforms that include establishing a government-controlled NHI fund that will be the sole purchaser of health services and prohibiting medical schemes from covering benefits provided by NHI.
Solidarity was the first organisation to try to overturn the act, shortly after it was signed into law by President Cyril Ramaphosa in May 2024.
It was swiftly followed by the Board of Healthcare Funders, which represents medical schemes, and the SA Private Practitioners Forum, which represents healthcare practitioners.
Hasa announced last month that it intended to take legal action because the government had failed to respond to alternatives to NHI put forward by various groups, including Business Unity SA, an umbrella group for organised business. Hasa’s members own and operate more than 500 private hospitals, containing three-quarters of the about 40,500 licensed private hospital beds in SA.
In its papers, Hasa challenges the minister’s assertion in the Solidarity case that NHI does not need to be costed before implementation and that this position is supported by the World Health Organisation (WHO).
‘WHO guidance’
“The minister’s expert affidavits contend that there is little value in trying to understand the total cost of a fully implemented NHI and whether that cost will be affordable. However, this is not in line with the WHO’s guidance,” said Hasa CEO Dumisani Bomela in his founding affidavit.
“In particular the WHO does not say that the government should not conduct any costing studies before embarking on public healthcare reform. The WHO says that the government should conduct cost estimates that provide ranges of costs depending on various assumptions and models ... [but they] should not conduct long, protracted costing exercises aimed to reach a single figure that might delay public health reform,” he said.
Hasa argues in its application that the act is incoherent, financially unviable, and at odds with the constitution because it will worsen access to healthcare for the general population and curtail services for asylum seekers.
It submitted to the court a report by Berkeley Research Group executive director Greg Harman that concluded there is no feasible way to finance NHI given the fiscal challenges facing SA.
“In my assessment, and that of the National Treasury, there is no scope to raise tax rates or to introduce new taxes, to significantly reprioritise the national budget, or for the government to borrow additional funding to finance comprehensive universal healthcare in SA,” he said.
Harman said there were inherent financial risks with implementing the NHI Fund, which would reduce competition and was likely to reduce hospital returns to unsustainable levels. International experience showed national health programmes could become financially unsustainable “within years of launching”, he said, citing the UK, Ghana, South Korea and Taiwan.
Hasa argued in its papers that the act’s restrictions on medical schemes were irrational and violated section 27 of the constitution, which places an obligation on the state to progressively expand access to healthcare. “Individuals will be unable to utilise ... medical schemes to cover the cost of private healthcare services outside the NHI, regardless of whether the NHI services are available, timely or of adequate quality” it said.
Section 33 of the act says medical schemes will be restricted to providing “complementary cover” for benefits not covered by NHI once the new scheme has been declared fully implemented by the minister.
Hasa’s expert witness, Margaret Guerin-Calvert, founding president of FTI Consulting’s Centre for Healthcare Economics and Policy, said the NHI’s restrictions on the use of existing private medical insurance was virtually unprecedented by international standards. Her review found no examples of this, aside from some provinces in Canada.
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