As the legislative process on the National Health Insurance (NHI) Bill moves closer to its finalisation, the contestation rages with more intensity on whether this is the right model for universal health coverage (UHC). The debate tends to be dominated by what immediately strikes people’s senses: the practical problems relating to how the current government would administer a scheme of the magnitude of NHI, fiscal constraints, mismanagement and corruption. What is missing are the subterranean ideological underpinnings of the conflicting policy positions of  proponents and opponents. A comprehensive debate on NHI is one of those that has the potential of assisting us to forge an identity as South Africans. Who are we?  Government has taken an egalitarian approach to UHC whilst the official opposition, the Democratic Alliance (DA) is motivated by classical liberalism.

Government estimates the country’s expenditure on health to be 8.5% of GDP with 4.1% spent on 84% of the population in the public health sector whilst 4.4% is spent largely on 16% of the population in the private health sector, mainly funded through health insurance referred to as medical schemes. In terms of total GDP for 2021, this translates to around R246 billion for 84% of the population and R264 billion for 16%. It is estimated that R4 412 is allocated per person in the public sector and R24 444 is spent on a person in the private sector. There is something terribly wrong with this state of affairs. A privileged few, black and white, have access to quality healthcare in the private sector and the vast majority mainly black who cannot afford health insurance are subjected to poor healthcare in the public sector. Extreme inequality is morally corrosive and militates against social justice, nation building and social cohesion. We tend to view justice narrowly as law enforcement: the police, prosecutors and the courts, whereas essentially, justice deals with questions about the right distribution of benefits and burdens in society.   

In response to inequalities in healthcare, challenges of poor quality healthcare in the public sector and escalating costs in private healthcare, government is proposing a major policy reform, the NHI. The most defining feature of NHI is that it is a single-payer of health services to both the public and private healthcare service providers: general practitioners, clinics, hospitals, specialists and pharmacies. Simply put, citizens in a single-payer system do not pay premiums to a private insurance company but pay taxes or separate health care premiums to the government, which then runs an insurance program for all citizens. When you visit the health service provider, the government which is your insurer pays the bill. Several industrialised nations and developing countries have different versions of UHC and South Africa’s proposed NHI is similar to the British National Health System (NHS).

Through a single-payer model government seeks to change the basic structure of SA’s health system, the two-tier system, in which the public sector serves the majority and the private sector serves a minority. The health department states, “NHI is a health financing system that is designed to pool funds to provide access to quality, affordable personal health services for all South Africans based on their health needs, irrespective of the socio-economic status”. The department posits, “The main contributor to inequity in healthcare is the existence of a two-tier healthcare system where the rich pool healthcare funds and resources separately from the poor, these inequities have also resulted in mal-distribution of key health professionals between the public and private health sectors, as well as urban and rural areas as well as among the districts”. The chief source of income for the fund will be revenue raised through general taxes that include payroll and a surcharge on personal income. It is commendable that National Treasury since late last year approved the budget for the organisational structure of the NHI branch in the Department of Health and its being populated, however given how far the Bill has advanced, National Treasury has to move with speed in finalising a detailed funding model for NHI. A single-payer, in light of the economies of scale, the setting of prices for all service providers and referral pathways, will lower the overall costs of healthcare.

According to government, the pooling of risks and funds into a single-payer to both public and private healthcare services will give effect to principles of equity and social solidarity that must inform how the country’s healthcare system is structured. President Cyril Ramaphosa characterises NHI as revolutionary and it is this distinct feature as a single-payer, I argue, that gives NHI its revolutionary content. The single-payer model has consequences for private health insurance, health service providers and users, which will become apparent in the ensuing discussion.

The DA, holds that government must focus on fixing the public health sector, in particular, the governance and management of public hospitals as a way to UHC. The leadership of the SA Medical Association shares a similar view that government must first fix public hospitals including management, corruption, shortages of health practitioners and deteriorating infrastructure. Opponents of NHI have also warned that the NHI public entity will be another failed state owned enterprise. To this, the leadership of the department of health replies that NHI could be another SARS - the SARS of today.

There is no debate about the dire state of many public hospitals; the outgoing health ombud, Professor Malegapuru Makgoba, has described the Gauteng health department as being run by ‘Mickey Mouse’, the Eastern Cape, dysfunctional and an embarrassment and the Free State in disorder. However an approach that says, first fix public hospitals, is a bit mechanistic and will fall short of changing the basic structure that perpetuates inequalities.  What is needed is an integrated approach in which all the interconnected parts of the health system are reformed and improved simultaneously – it’s an ecosystem. Any public sector hospital to be contracted by NHI must meet the norms and standards as set by the Office of Health Standards Compliance. The establishment of NHI will put pressure on government to speed up its initiatives on strengthening the public sector including facilities and human resource planning. In the advent of 60 million South Africans having health insurance under NHI, there seems to be an opportunity for the growth of private hospitals due to an increase in demand. Some, understandably, think that this first-fix-public-hospitals approach is a ploy to shut down NHI.

Fundamentally, as a center-right party, the DA is concerned that NHI will erode the freedom of choice for both users and healthcare service providers. The middle class which currently can afford private health insurance and access private medical service providers as it wishes will now be forced to pay into a single pool for all South Africans and restricted in how it accesses medical care through referral pathways. According to the DA, doctors, specialists, private hospitals and other service providers that currently transact with private health insurance on behalf of users will now be coerced to contract with a government scheme on all services covered by NHI.  It is also worried about the diminished role of medical schemes that will on full implementation of NHI only be allowed to provide complementary cover to the comprehensive benefit package of NHI as this is a single-payer model. Given the limited resources, on full implementation, NHI will not cover everything for everyone such as cosmetic surgery - the upgrading of the nose. The Institute of Race Relations (IRR), a think-tank that serves the DA, has made similar submissions to parliament as the DA. It states in its core values that, “At the IRR, we unapologetically ground all our work in the ideology of classical liberalism…”

It is the limitation on the role of private health insurance that has also seen medical schemes objecting to NHI and have proposed a multi-payer system. A multi-payer system in which private health insurance companies offer benefits for the same services covered under the NHI fund would have the effect of negating the revolutionary content of NHI (single-payer), maintaining the fragmentation of funds where the rich pool healthcare funds and resources separately from the poor. The Board of Healthcare Funders is currently fighting hard in the courts for medical schemes to be allowed to offer low-cost benefit options (LCBO) for low income earners. To protect consumers, there is a prescribed minimum benefit that medical schemes must provide. Interestingly, the LCBO will cover primary health services which are the focus of NHI in the first phase of its implementation.

Business Leadership South Africa (BLSA) holds that NHI is unworkable and will take all of us to the lowest common denominator of sub-standard healthcare. BLSA thinks that something similar to “Obama Care” will be the right path for SA to UHC. It goes without saying that BLSA is committed to free markets marked by private enterprise, hence it is fighting for the existence of private health insurance in the current form. It has suggested a crisis committee between government and business on health. Please, we have enough crisis committees. In light of the fact that the formal conception of NHI started with a green paper in 2015 it would really be  silly for anyone to suggest that government did so eyeing the 2024 election as some have done.

The DA views the single-payer system as  the abolishment of choice on the part of users and health service providers and not merely a limitation of freedom of choice and thus a violation of individual freedom. There is no doubt in its classical liberal orientation about its commitment the primacy of individual rights. For the DA, NHI is too much state intervention, which places a huge tax burden on citizens who are already squeezed. The common refrain, “government must get out of the way”. Organisations which fall within the right-wing tradition such as Solidarity claim that NHI is unaffordable and unworkable and have vowed to take the NHI Bill to court. It has also been suggested in some quarters that NHI amounts to the nationalisation of the private health sector. Far from the truth, under NHI the private health service providers will coexist with public health establishments. This is the main reason the Economic Freedom Fighters (EFF) reject NHI. In a nationalised healthcare system, all hospitals will be administered by government; nurses, doctors and specialists would be salaried employees of government and pharmacies owned by the state.

The DA has proposed an alternative to NHI, Sizani, which is essentially a framework that focuses on improving efficiencies in public health facilities such as hospitals and clinics as a way of providing universal health coverage. It’s not aimed at advancing equality but rather mitigating the situation of the poor and the working class by ensuring that the resources which have been allocated for public health are managed efficiently to improve the performance of public hospitals. Don’t be mistaken about classical liberals and confuse them with strict libertarians in the fold of Robert Nozick in Anarchy, State and Utopia that advocate for a night-watchman state. Classical liberals support moderate welfare for the poor but do not talk to them about a more equal society. Their most influential theoretician is John Stuart Mill. In his work, On Liberty, Mill is focused on limiting the power that society can legitimately exercise over the individual, hence the concept of limited government.

Given the extreme inequalities in healthcare, how the problem of poor public healthcare can be viewed simply as management and not also the distribution of resources, boggles the mind. Yes, for the efficient and effective delivery of any agreed UHC model, the practical problems as correctly pointed out by the various stakeholders must be adequately addressed. Government cannot escape responsibility for the mismanagement of public services leading to poor service delivery, including public healthcare.  State incapacity and corruption are practical problems that must be dealt with seriously and urgently but without changes to the basic structure of the health system we will see the perpetuation of extreme inequalities and poor healthcare for the majority.

With the requisite will and all social classes behind the incremental implementation of NHI, taking a long-term view, we will succeed. The British NHS was established in 1948 with some of the anxieties that we have for NHI. We need a health system that integrates statutorily, public and private health sectors in which the poor and the working class could find themselves sharing a room in hospital with the affluent. Under NHI, the people who reside in Olievenhoutbosch shall not go to Tembisa hospital, leaving behind nearby private hospitals in Centurion and Midrand. This sharing of spaces by the affluent and the disadvantaged creates opportunities for conversations that would be in the common interest regardless of their inequality of income and wealth, engendering solidarity and social cohesion. We are South Africans, committed to the building of a nation based on principles of justice, equality and freedom as envisaged in the constitution of the Republic of SA. We are a caring nation.

Written by Siyabulela Tsengiwe.  Tsengiwe is the former Chief Commissioner of the International Trade Administration Commission of SA and writes in his personal capacity