CHRISTOPHER W MPEHLE | The financial architecture of healthcare access

A particular kind of clarity comes from sitting on both sides of a financial transaction in healthcare — from structuring the capital acquisition of a medical technology asset and from managing the billing, reconciliation and revenue cycle of the clinical practice that will one day use it. You stop seeing the National Health Insurance (NHI) debate as a political contest and start seeing it as a financial architecture problem.

South Africa’s NHI Act, signed into law in May 2024, is suspended in legal limbo. The Constitutional Court is due to hear challenges to the act in May. The NHI Fund, which the act designates as a schedule 3A public entity, has no appointed board. The Phase 1 implementation timeline, which was supposed to run in 2023-26 has not been met. The 2026 budget allocates R9.3bn to NHI-related spending, none of it the large-scale fiscal mobilisation the act’s Phase 2 was supposed to trigger. When asked when NHI would be implemented, the health minister declined to provide a date.

None of this surprises me and I do not say that cynically, but because the fundamental challenge of universal health coverage, in South Africa and everywhere it has been attempted, has been less a question of political will and more a question of financial design. The debate about NHI has been conducted almost entirely in the language of access and equity. But the mechanism through which those values are delivered is financial and the financial design matters as much as the intention.

Universal coverage

My academic research examined universal healthcare frameworks with specific reference to South Africa’s NHI. The finding across every country that has achieved meaningful universal coverage is that the financing mechanism was designed before the coverage mandate was expanded. The fund was established, tested and capitalised. The accreditation systems for providers were built. The purchasing models were stress tested. The political declaration of coverage came last, as a formalisation of what the system had already demonstrated it could do.

South Africa has inverted this sequence. The coverage mandate, in the form of the NHI Act, preceded the financial infrastructure. The act declares that all eligible residents will access services without payment, but the fund through which those services will be purchased does not yet exist in operational form, has no board, and has no clear capitalisation pathway. The 2026 budget explicitly declined to phase out the medical tax credits that were supposed to be a primary funding source. It appears the National Treasury is not yet convinced.

This is not a critique of the NHI’s values. The diagnosis — that South Africa’s healthcare system allocates most of its resources to 16% of the population with private medical cover, while the public sector serves the remaining 84% — is correct and morally untenable. But the prescription requires more honest engagement with the financial architecture required to make it work.

What the debate gets wrong

The most underdiscussed dimension of the NHI implementation debate is its implications for healthcare capital investment and medical technology access. I have a direct stake in this question: as CFO of Ultra Focused Medical Technologies, I was responsible for the financial structure of South Africa’s first Haifu JC 300 machine acquisition — a R40m medtech asset that represents a category of noninvasive, oncology-adjacent technology that was unavailable to patients before this investment.

That transaction was financed through private capital, in anticipation of a private-payer billing environment. The question the NHI creates is what happens to the economics of that kind of capital deployment when the single-payer architecture is in place. If the NHI Fund becomes the sole purchaser of healthcare services, and if the fund’s pricing committee sets the rate for Haifu procedures without reference to the capital cost of acquiring and maintaining the machine, the financial model for medtech commercialisation in South Africa collapses.

This is not a theoretical concern. It is what has happened in every country that transitioned to a single-payer system without building explicit capital investment frameworks into the financing architecture. Innovation does not happen through goodwill, but because capital can find a return. If the NHI framework does not create a credible pathway for medtech companies to recover investment, they will not invest. South African patients will then access the technologies of a decade ago, purchased at volume discount, while the rest of the world moves on.

Universal access to yesterday’s technology is not universal healthcare; it is managed decline with better branding.

The architecture that is needed

The good news is that this is a solvable problem. The South African Medical Journal published research in 2025 proposing a framework, a model they describe as an “active transition” scenario, in which the government takes steps to maintain the viability of the private funding sector during the NHI transition. Meanwhile, the Health Funders Association has proposed an NHI+ model in which NHI and medical schemes cover a common benefit package delivered by public and private providers, with risk equalisation and redistributive arrangements between funds.

Both proposals share a common insight: the binary framing. NHI versus private healthcare is a political construction, not a financial necessity. Hybrid systems are the norm in virtually every advanced economy. The British NHS does not prohibit private practice. Germany’s statutory health insurance system coexists with a private insurance market. Thailand’s universal coverage scheme, widely cited as a success, contracts private providers to fill capacity gaps in the public system.

What South Africa needs is not a choice between universality and quality, or between public and private. What it needs is a financing architecture that pools risk broadly, purchases services strategically, creates predictable capital frameworks for technology investment, and maintains competitive quality through regulated pluralism. That architecture exists in precedent. What is missing is the political and technical willingness to design it honestly rather than ideologically.

Constitutional Court

The Constitutional Court hearings scheduled for May are being watched primarily as a legal event, but they are also a financial event: depending on the substantive amendment, opening the door to the kind of architectural redesign described above, or proceeding towards implementation in its present form, with all the capitalisation and design challenges unresolved.

I do not know how the court will rule. But I know that the window for getting the financial architecture right is not unlimited. Every year of ambiguity is a year of underinvestment, delayed capacity expansion and foregone innovation.

If it proceeds unchanged, the private sector’s response will be capital flight. The medtech companies, hospital groups, and specialist practitioners who anchor South Africa’s private clinical capacity will begin making decisions at the margin: whether to invest in new equipment, whether to expand, whether to stay. Each of those decisions is a financial calculation, not an ideological one. And right now, the financial signals are deeply ambiguous.

If it returns to parliament there is an opportunity to redesign the financing architecture with the rigour the system deserves. To build the fund before declaring the coverage. To create the capital pathways before attracting the investment. To earn the trust of the private sector’s capacity before expecting it to serve the public sector’s mandate.

I do not know how the court will rule. But I know that the window for getting the financial architecture right is not unlimited. Every year of ambiguity is a year of underinvestment, delayed capacity expansion and foregone innovation. The patients who will need the next generation of diagnostic and therapeutic technologies in 2030 are alive now. The decisions being made now will determine what will be available to them.

The NHI debate has generated enormous heat and little architectural light. Politicians speak in values. Litigants speak in constitutional rights. The healthcare industry speaks in market share. Almost no-one is speaking in the language of financial design; of fund capitalisation, provider payment reform, technology procurement frameworks, and investment risk allocation.

That is the conversation South Africa should have. Not instead of the values conversation, the equity imperative is real and urgent, but alongside it. Because the architecture through which values are delivered is not a technicality. It is the difference between a healthcare system that expands access and one that merely declares it.

I have spent the past several years building financial frameworks in the healthcare system. I write this not as an observer of that system but as someone who has sat inside its financial machinery, understood where the pressure points are, and tried to make them work.

The machinery needs redesigning. The good news is that the blueprint exists, in theory and in global precedent. Whether South Africa’s political moment allows for that redesign is the question that May will begin to answer.

• Dr Mpehle is CFO at Ultra Focused Medical Technologies, head of finance at Dr Mpehle Obstetrics & Gynaecology Suites, and a board member and chief of strategy at Luminary Kora. He writes in his personal capacity.