Medical scheme members should not panic but continue with their current healthcare arrangements despite President Cyril Ramaphosa’s signing the National Health Insurance (NHI) Act into law yesterday, says Damian McHugh, Momentum Metropolitan Health’s chief medical officer.
McHugh said it will take time to implement NHI, which means the status quo remains in effect. “So, our message to our members and the wider South African community is to continue with your current healthcare arrangements.”
This view was echoed by Bonitas Medical Fund, which told its members there is “no need to panic”, and the Act is a long way from being fully implemented.
During the debate on Ramaphosa’s State of the Nation Speech, Health Minister Dr Joe Phaahla said NHI will be implemented in two remaining phases from 2024 to 2026, while between 2026 and 2028 government will focus on establishing the board and chief executive and several key committees of the NHI Fund.
According to the NHI Act, the first implementation phase is supposed to run from 2023 to 2026, during which time the NHI Fund will be established, and other groundwork will be completed.
The second phase – which would see the “mobilisation of resources” and “the establishment and operationalisation of the Fund as a purchaser of healthcare services through a system of mandatory prepayment” – is from 2026 to 2028.
McHugh said Momentum Metropolitan Health supported the intent of enabling more South Africans to access healthcare.
“Healthcare is a fundamental right for all. For us to create and implement a national health system to enable this, we must be mindful of the current constraints and ensure that we move forward in an informed and sustainable manner,” he said.
The implementation of the NHI Act in its current format was not sustainable, and the country could expect the challenges made by numerous stakeholders to become more vocal, particularly around the constitutionality of the legislation.
“Another key consideration is that the South African economy does not have the required funds to support the implementation thereof,” he said.
Momentum Metropolitan believes the private and public healthcare systems should collaborate to optimise the private sector’s experience and infrastructure to augment the public sector and ensure experienced resources to not leave the healthcare sector.
Treasury is strapped for cash
Old Mutual’s group chief economist, Johan Els, said the signing into law of the NHI Act does make a material difference to the status quo.
He told IOL that it will take a long time to implement NHI because of spending pressures. Furthermore, the legislation might be taken all the way to the Constitutional Court by operators in the private healthcare sector.
National Treasury has not allocated any money to NHI in the Medium-Term Expenditure Framework. “Treasury has said numerous times that there is no money for this. The Treasury has given us an indication that it is going to take a long time to implement this very gradually,” Els was quoted as saying.
Treasury’s current priority is fiscal consolidation so that South Africa can stabilise and reduce its debt-to-GDP ratio.
“That means that there is no room in the Budget for extra spending measures. In fact, other spending will probably have to be cut over the next few years. The Treasury has also indicated that we as consumers are overtaxed and there is no real room for additional taxes or higher tax rates to finance the NHI,” Els said.
Earlier this month, Business Day quoted National Treasury’s chief director of health and social development as saying that NHI is likely to take many years to implement because there is limited scope to fund it with higher taxes.
According to the publication, Mark Blecher told the Board of Healthcare Funders’ annual conference that the “evolution” of NHI is likely to be gradual “over many years”.
The current financial environment has created budget pressures throughout the government, and it would be difficult to generate additional funding for health by raising taxes.
It was difficult to make the case for increasing the proportion of public money set aside for health because it was already high relative to many other countries, said Blecher. South Africa allocates between 13% and 14% of its budget to health, more than triple the share set aside by India (3.7%) and double that of Egypt (6.8%), he said. Moreover, many countries that spent less on health were achieving better health outcomes, he said.
“We do need to move forward to NHI, but we need to realise the fiscal constraints we are working under … and not being unrealistic about what the public sector can and cannot do,” he was quoted as saying. “I think colleagues should perhaps not be unnecessarily nervous about the future because changes will be long and involve many stakeholders.”
Delayed for decades, says Gore
Adrian Gore, Discovery’s group chief executive, said the expected legal challenges to the NHI Act are likely to result in implementation being delayed for decades.
“We see no scenario in which there is sufficient funding for a workable and comprehensive NHI in its current form – hence our conviction that private sector collaboration is vital, and that full implementation of the Bill remains a long way off – likely decades,” Gore said in a statement on Tuesday.
“Significant flaws in the Bill and the legislative processes followed in promulgating the Bill will also likely result in the Bill being challenged on numerous fronts, leading to further likely delays. The NHI is an inordinately large and complex initiative requiring considerable planning and preparation before it can be implemented,” he said.
Gore said the largest barrier to implementing a workable NHI is funding. “There is no funding plan yet and, given the country’s constrained fiscal position, low economic growth, and narrow tax base, this can only be solved in the longer term.”
Discovery has about a 60% market share of the country’s private health insurance market and derives about 34% of earnings from its South African health business.
Implementation in stages
Medihelp’s principal officer, Varsha Vala, said the legislation provides that different sections of the Act will come into force over time, as and when certain milestones are achieved.
“So even though the Act will be signed tomorrow [Wednesday], the provisions of the Act are not operative. The first sections of the Act which will most likely become operative are those relating the creation of benefit committees and the like. These committees must then sit and determine the benefits. This process itself will most likely take a significant period of time as evidenced in other countries,” Vala said.
She said the Act does not do away with medical schemes but states that schemes cannot offer cover for services covered by the NHI, which, at this stage, is not defined because the NHI’s committees have not been formed and no decisions in this space have been taken.
Furthermore, the limitation on the offering of medical schemes comes into operation only once the NHI is “fully implemented”.
“In our view, the implementation of the NHI will rest heavily on the readiness of the existing healthcare infrastructure and the healthcare workforce, public education and engagement, the political landscape, and the financial resources, of which we are cognisant is a mammoth task requiring many hands and minds to address,” Vala said.
What do I do as the medical aid will not pay for rare diseases or the medication as one is a rare form of Porphyria that is not part of diseases on their list, nor the other diseases. I have tried so many times. The public sector does not stock my medication or have the doctors to treat me.