NHI Bill: Welcome but flawed

By David Sanders & Louis Reynolds, People’s Health Movement South Africa

The People’s Health Movement South Africa (PHM-SA) welcomes the National Health Insurance (NHI) Bill in that it confirms Universal Health Coverage (UHC) through a single payer system as the platform for the delivery of health care. The goal of UHC is to realise the right to comprehensive health care of good quality for everyone on the basis of need, while ensuring that no one experiences financial hardship in accessing the care they need.  Comprehensive care includes promotive, preventative, curative, rehabilitative and palliative health services regardless of people’s socio-economic or health status.  The NHI should be funded through a solidarity mechanism where there is a cross-subsidy from the rich to the poor via taxation.

Although we are supportive of the principles that underpin the NHI, PHM has several reservations about whether the Bill can deliver UHC. More broadly, we remain deeply concerned about government’s ability to steer this ambitious project in the context of South Africa’s deep-seated and multi-pronged health crisis.

Administration of the NHI Fund

The Bill makes clear that the NHI Fund will be overseen by a Board of ten persons appointed or approved by the Minister. It will be the only purchaser of health services from accredited providers – public and private – and will ensure equity and efficiency in health care. A unitary system with the National Health Insurance Fund (NHIF) as the single purchaser of services allows for strategic purchasing of those services that are necessary to reach defined health goals. .

A justifiable concern, expressed by a number of analysts and based on experience of state-owned enterprises, is the potential that exists for this enormous fund to be looted.

Services free at the point of use will be provided to permanent residents while documented refugees and asylum seekers will be eligible for free emergency services, care for conditions of public health importance (presumably TB, HIV and other infectious diseases) and services for paediatric and maternal conditions.

Services not reimbursed by the fund (i.e. not part of the defined ‘package’) can be paid for through medical schemes or out-of-pocket. All users are required to be registered with a primary care provider (presumably a clinic, health centre or general practitioner) and will have to attend such a provider before being eligible for specialist care.

Services provided under NHI

The details of what services are to be funded (the benefit package) are not provided. It is hoped that the benefits package will be identical for all users of NHI-funded providers. However, the Government Gazette of July 2017 titled ‘NHI Implementation: Institutions, bodies and commissions that must be established’ describes the proposed funding arrangements for five different groups: the unemployed, the informal sector (such as taxi industry; hawkers, domestic workers), those in formal sector employment (bigger business), those in formal sector employment (small and medium size business), civil servants (including SOEs, Intelligence Agencies, Defence, Police Service). This is a concern, since it implies that there will be different packages for different groups. Although this arrangement is said to be ‘transitional’, experience from other countries shows that it is very difficult to change such benefits packages once they have been in place for any length of time. It is likely that the poorest and sickest in our country will receive the most limited package of services. If this occurs it will increase already existing inequality.

A ‘Benefits Advisory Committee’ will decide what the content of these packages will be. This important body has representation from all medical schools, provinces, private hospitals, medical schemes and the World Health Organisation (WHO) but none from civil society or labour. This will be supported by a Health Benefits Pricing Committee which also has only technocrats.

There is no room in these committees for meaningful public participation. This will bias their work and decisions towards hospital-centred specialist care and a narrow biomedical approach. It is essential to include civil society and labour on these committees.

Their proceedings should also be open and transparent, and accountable to the Minister and Parliament. In particular, they must be accountable for the reasonableness of their choices of the benefits they include in the package. The reasoning behind their choices should be open to public scrutiny, including the evidence upon which they are based and how they apply in local contexts.

Only the Stakeholder Advisory Committee, a large body that merely advises the Minister, has representation from indigenous practitioners, NGOs and civil society, although they are greatly outnumbered by representatives from professional and statutory bodies.

How will NHI purchase services?

Purchasing of services is intended to be devolved to provincial and district level hospitals and at sub-district level to contracting units for primary health care. District Health Management Offices are intended to play a coordinating role.

Justifiable concern has been expressed about whether these sub-district and district entities will have the capacity to undertake such detailed and complex activities. The mechanisms for payment of accredited service providers are vague in the Bill and it is strongly rumoured that medical schemes may be enrolled to perform this function. PHM-SA is concerned that the greater likelihood of urban and private providers being accredited than public and (especially) rural providers, holds the danger of aggravating already existing urban/rural inequity. For example, the great majority of medical specialists and therapists of various kinds are overwhelmingly located in large metros, especially in Gauteng and Western Cape. This effectively means that public tax money will be used to fund a service that will likely cater preferentially for the better-off living in urban areas.

Transitional arrangements

The Bill specifies transitional arrangements that consist of three phases extending to 2026. The current second phase will focus on establishing institutions that will form the basis for the Fund, as well as on interim purchasing of personal health care services. Phase 3, from 2022 to 2026, will establish the necessary structures and be guided by two committees – the National Tertiary Health Services Committee and the National Governing Body on Training and Development. These will be responsible for a Human Resources for Health (HRH) development plan.

PHM has two concerns about these arrangements: Firstly, an HRH plan is required urgently to ensure the development of a robust public health sector, especially at district level and below, so that the NHI can operate effectively and efficiently in formerly underserved areas. Secondly, given their unimpressive record to date in transforming health sciences education and training, it is unlikely that these structures, whose composition has been proposed to include mainly hospital-based clinicians and educators, will implement an appropriate HRH plan.

The Ministerial Advisory Committee on Health Care Benefits will be a precursor to the Benefits Advisory Committee which will advise the Minister on priority setting. Although the composition of this structure is not specified in the Bill, the 2017 gazette discussed above proposed a composition in which senior government officials and medical scheme representatives predominated. This structure too creates a concern that the emphasis will be on facility-based clinical medicine and that primary and community-level care will be marginalized, as will prevention activities.

The context: the national health crisis

While the crisis in the public health sector is front-line news today, the private sector is in a crisis of its own — a crisis of growing medical scheme unaffordability,  shrinking benefits and static or declining  membership.

The roots of the crisis lie in the systematic underdevelopment and structural inequality enforced by apartheid. Its more immediate cause is the neoliberal Growth, Employment and Redistribution (GEAR) macroeconomic policy adopted by the ANC-led government in 1996.  GEAR follows the free market fundamentalist mantra of public sector austerity, privatisation of public services and goods, trade deregulation and low corporate tax. It is failing in all 3 of its components: growth is poor, unemployment rampant, and we remain one of the most unequal countries in the world.

More than 2 decades of austerity, combined with a deepening culture of corruption, have aggravated both facets of the national health crisis. Firstly, the state has failed to address inequity in access to the social determinants of health (SDH) such as sufficient quality food, water, sanitation etc through poor service delivery and growing unemployment and income inequality, thus aggravating the burden of disease. Secondly, the tight financial constraints imposed on the public health sector by austerity, together with a growing and increasingly pervasive culture of corruption, has led to loss of posts and skills, deteriorating infrastructure, and demoralisation of staff at all levels of the system. The fact that rigid austerity was forced on the public sector in the face of the burgeoning and badly-managed HIV-AIDS pandemic of the 1990s made it all the more devastating.

Strengthening the public health sector

Before the public health sector can participate in the NHI it will need to be strengthened substantially, especially in terms of its physical infrastructure, human resource base and their skills, especially in leadership and governance. These imperatives will require strong political will and significant funds. Government has little option but to provide such funding, since the current health crisis is untenable. Although the upfront financial commitment will be large, the returns on investment are potentially even greater – as a result of savings on long-term health care, improved economic productivity of a healthier workforce, and the multiplier effect in the economy of having a larger number of employed people, especially rural women.

Financing the NHI

The Bill says very little about possible sources of funding for the NHIF, but there are no real options other than through taxation and an end to austerity budgets. PHMSA believes that progressive income tax — a surcharge added to the normal income tax at an increasing percentage — would be the best option. The principle that those who can afford it pay more, while those who need more health care receive more care, also builds social solidarity. The retrogressive recent increase in VAT adds to the tax burden of poor and working class people and exacerbates inequity in access to the social determinants of health through increased prices on some essential commodities.

There is no doubt that increases in revenue from tax are necessary to strengthen the public sector and finance the NHI. This may be difficult politically, but we believe there is room for such increases. Forslund notes that, because tax brackets have increased faster than inflation, the tax burden on the middle class and the rich has decreased substantially over the past decades. He points out that if the government had merely kept personal income tax stable since 2005/06 – by raising tax brackets strictly at the rate of inflation – personal income tax would have added more than R150 billion to the present budget. This would have made financing the NHI easier even before raising additional tax.

The alternative to tax is to borrow, which means eventually paying more and more government income towards debt servicing and away from delivering services.

Corruption

It is also essential to root out corruption. Corruption weakens the state, delegitimises taxation, destroys public services, and ruins the social fabric. Corruption thrives in dark spaces where the public and private sectors meet. Forslund argues that “as long as the public sector isn’t strong enough to provide basic services, but relies on “partnerships” and tenders, corruption will remain rampant”.

Conclusion

There have been many responses to the NHI Bill, most of them negative, many containing uncomfortable truths about the state of the health system and the extreme difficulty of fixing it. But this strengthens the case for the NHI and an equitable health system based on UHC and the principles of Primary Health Care. The state, at present, does not have the capacity to deliver it. Nor can the corporate private sector, as is shown by abundant empirical evidence in the public health literature. This places a major responsibility on civil society to give the state critical support and mobilise the public around health. It underpins PHMSA’s campaign for a “People’s NHI”.

The People’s Health Movement South Africa calls upon all citizens of South Africa and civil society to unite behind a People’s NHI to ensure that the principles of the Right to Health, Universality and Social Solidarity are adhered to throughout the implementation process. 

To join the People’s NHI Campaign, please do one of the following:

• Dial *134*1994*333# (it’s free)
• SMS ‘NHI’ to 31660 (standard cost SMS)
• Visit http://bit.ly/2r22Tnl
• Or send a PCM to 066 040 9017

Contact Person: AnneleenDeKeukelaere@secretariat@phm-sa.org