Healthcare providers will no longer ‘call the shots’ under NHI, says minister

Universal health coverage was “non-negotiable”, and National Health Insurance (NHI) was the instrument whereby this would be achieved, Health Minister Dr Joe Phaahla told the National Assembly’s Portfolio Committee on Health on Wednesday.

Responding to comments that the country’s economy was too weak to support NHI, Phaahla said the United Kingdom had set up its National Health Service “from scratch” after the end of the Second World War when buildings were in ruins and the economy was in a dire state. He said other countries have implemented universal health coverage when their economies were in distress.

Regarding calls for the government to fix the public healthcare sector before embarking on NHI, Phaahla said it was “not a case of either/or”.

He did not dispute that there were “challenges” in the public healthcare sector, including corruption, fraud and poor management, which were being addressed. However, it was only by pooling the country’s healthcare resources via NHI that the Department of Health would be able to remedy the problems, such as poor infrastructure and under-staffing, plaguing the public sector, which served 80% of the population.

Phaahla emphasised that NHI would be implemented incrementally. However, he was adamant that once the NHI Fund was in a position to cover comprehensive healthcare benefits, there will be no need for private medical schemes.

He said calls for feasibility studies into the cost of NHI benefits as a precondition to implementing the system were based on the false assumption that healthcare providers would continue to “call the shots” when it came to pricing. Although there would be negotiations with healthcare providers and the benchmarking of treatment costs, providers would no longer “have the leeway to call prices”.

The government’s aim was not to spend more on NHI than the 8.5% of GDP that was currently allocated to health resources, Phaahla said. It envisaged that administrative costs would not be more than 3% of the value of the NHI Fund, compared to 15% in the private sector.

Phaahla said the current 8.5% of GDP would not be inadequate to fund NHI. Indeed, if resources were “properly rationalised”, it will be “more than is needed”. Therefore, he said, it was “totally unfounded” to speak of the need to increase the rate of value-added tax (VAT) or income tax.

However, he said that, as was the case in other parts of the world, income-earners would be expected to contribute to the funding of NHI, over and above the revenue collected via income tax and VAT. However, he said this contribution would be “less onerous” (presumably than medical scheme contributions).