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Spotlight on NHI: Focus should be on building the public healthcare system

When engaging in the discussion around National Health Insurance (NHI), it is important to state, by way of introduction, a few key points:

Firstly, that South Africa has inherited deep social and economic inequalities and as a result is in the grips of four major and concurrent epidemics: infectious disease; maternal and child morbidity and mortality; trauma and violence and a growing epidemic of non-communicable diseases such as hypertension, diabetes and cancer.

Secondly, access to quality healthcare is only a part of the much needed response to these epidemics. True health improvements in the country can only be achieved through addressing the social determinants of health such as housing, sanitation, access to clean water and adequate nutrition and sustainable decent work.  With the discussion on funding reforms to the health system, the fundamental issue of addressing these determinants of health is often neglected.

And thirdly, we have two parallel, divided and non-complementary health systems that are both in deep crisis. The crisis in the public sector is a matter of common public comment. Long clinic queues, unacceptably long waiting times for life saving treatments, lack of human resources, infrastructure and effective systems are all real and ongoing problems. It is also important to note that the public system is itself unequal with an emphasis on curative care and urban centres at the expense of primary level care and rural health facilities.

But the crisis in the private sector, though often less visible, is similarly dire. Health expenditure through the private intermediaries in South Africa makes up at least 50% of South Africa’s gross domestic expenditure on health, making it proportionally the largest private health sector in the world. Yet the private sector is plagued by rising costs, decreasing benefits and over servicing of patients. In addition, lack of co-ordinated and multi-disciplinary care, excessive use of private specialists over general practitioners and a lack of promotive and preventative health strategies all contribute to poor quality care in the private sector.

Against this backdrop, where does the proposed NHI Bill take us? Of the many issues to discuss regarding this important piece of health legislation, I will focus on two areas:

Promoting equity and access

Firstly, the NHI bill proposes that the NHI Fund will purchase health services from private and public providers who have been accredited by the Office of Health Standards Compliance. In light of this, it is of great concern that the vast majority (691/696) of public health facilities failed to meet the benchmark standard for accreditation in the last OHSC audit. If the NHI is to be implemented by 2026, it is hard to imagine that all public facilities will have been upgraded and accredited in time to benefit from the new system. This is a serious concern as, in my view, only a publicly funded and publicly owned health system can sustainably and consistently deliver quality, equitable care to the entire population. While large tertiary public hospitals in urban centres may meet the necessary targets, surely a health reform that aims to promote equity and access must ensure that smaller, poorer, often rural facilities are also able to be providers within the new system.

Short term solution

My second point relates to the complexity of a public fund, the NHI, purchasing services from private providers. While the argument can be cogently made for contracting individual private providers at the primary level of care, such as general practitioners, where their contracting may in time result in integration into the public system, there are significant problems which may occur with contracting in with private facilities. We know from the recently released HMI report that three major hospital groups, Life, Netcare and Mediclinic, control almost all hospitals and beds in the private sector in South Africa. These are powerful private corporations which could very easily position themselves to benefit from NHI at the expense of less organised and under resourced public facilities. Contracting out health services to the private sector may be a short term solution to the problem of human resources and infrastructure in the public sector, but in the long term, may paradoxically weaken the public sector by decapacitating facilities and possibly promoting a flow of human resources from public to private.

A pro-public sector NHI

To this end, the NHI, as a strategic purchaser, should be expressly pro public sector and strategically focus on building capacity in under resourced areas such as clinics and hospitals in poorer urban communities and in rural facilities. Part of the argument for a purchaser-provider split is that it encourages competition and improves quality. However, equity would not be promoted by an NHI fund which views the competition between all health facilities as being on an equal terms. I would hope and strongly argue that NHI should use it’s purchasing power to expressly build a strong, high quality public sector. This would mean accrediting public facilities before contracting private facilities and ensuring that private sector facility contracting has fixed timeframes and clear mechanisms to build capacity for the same services in the public sector. Without this being undertaken as a clearly expressed strategy and aim, it is unlikely that we will address the gross imbalance between the two systems. While the Bill states that private medical schemes should ultimately play a complementary role, there is no similar clarity or strategy regarding the future complementary, rather than dominant, role of private facilities.

In conclusion, I believe we should measure progress and implementation of NHI against the percentage of public facilities that have been upgraded to the point of accreditation. Part of making this possible is the implementation of a dynamic and pro-active human resource plan for the public sector. It is untenable to have discussions about NHI and simultaneously permit frozen and unfunded posts in public facilities. Even if other aspects of the proposed health reform fail or are not fully implemented, improving public facilities remains a tangible and necessary marker for improving the health system and also becomes an important barometer of the commitment of the Department of Health, and the state as a whole, to the delivery of quality universal health coverage to all.

* Dr Lydia Cairncross is a health activist and surgeon working in the public health sector.

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Spotlight on NHI: Why NHI should focus on cutting costs in the private sector first

The African National Congress’s (ANC) policy of National Health Insurance (NHI) should be a financing mechanism, and so it is. In plain language, a financing mechanism is something involving money or finances that aims to achieve something, like transferring funds from those who are healthier and can afford it to those who are sick and cannot. Health economists study health financing reform, generally, but expertise is also required from those in the field of Health Policy and Systems. This is important in terms of health sector policy change in general, but also due to their expertise in the ‘how’ of policy implementation and what is essentially rethinking a socio-economic, political and cultural system (the health system).

NHI should be a mechanism that addresses fundamental imbalances between public and private health care financing arrangements and mechanisms that have resulted in the vast majority of people having access to much less health care than they need, and a minority having much more costly health care than they want. The financing ‘arrangements’ can be changed, and should be changed.

The need is clear from the 2016 National Health Accounts (tracking all health care expenditure in the country) that I worked on with Mongi Jokozela from the National Department of Health, Tomas Roubal from the World Health Organization and Shivani Ranchod from PERCEPT. The results were not publicly released, like other resource tracking work commissioned by the previous administration (headed by former Health Minister Dr Aaron Motsoaledi). Motsoaledi’s administration was, in my opinion, often insular and wary of public debate.

Strong evidence

In the National Health Accounts Report, we found the government was subsidising the private sector by 29% of its (the private sector’s) total health expenditure (as of 2014), including through the tax break on medical aid contributions introduced around a decade ago. This is strong evidence, in my opinion, and backed up by the Competition Commission’s recent Health Market Inquiry (HMI) findings, for ‘vested [private] interests’ influencing past government policy substantially, and why we should still be very wary of that now whilst looking for constructive ways ahead.

In this article I explain why I think the strategic focus of NHI is all wrong, essentially since the government is not taking the vested interests seriously enough. I also outline what I think is a better way forward in terms of focusing on cost savings first in order to make the NHI policy more viable.

Health is not a commodity

But first, let’s get something straight. As any health economist will tell you, health is not a commodity to be freely traded, rather it is a ‘public good’. This means that, like education and security, health should be freely available to anyone and everyone who needs it (everyone) and generally provided by government (not to say that the private sector doesn’t play an important role) in the interests of efficiency and population health. For me this implies that Education (public schools vs. Sachs) and Security (police vs. ADT) also need some kind of NHI or redistributive system, since unequal access to those services is also driven by excessive privatization.

I must also clarify something else before proceeding. An NHI Fund that pools public and private monies and implements ‘strategic purchasing’ (as set out in the NHI Bill), is there primarily to save money. The NHI also proposes that everyone will have to go on a single, presumably basic medical aid plan (perhaps even a hospital plan to start – Alex van den Heever’s suggestion) provided for by the government. One will purchase additionally, if one can afford it, from a medical aid plan, allowing for greater redistribution through increased ‘pooling’ of funds. This may be seen as leading to less ‘choice’, but the amount of choice people have at present in choosing between medical aids is highly debatable, as highlighted by the HMI report.

How is it that NHI could cost less? With very high volumes, a single ‘monopsony’ purchaser would always expect to get the best price. Other ‘strategic purchasing’ initiatives include detailed cost analysis (to work out how much is reasonable to pay), and comparisons with what other countries or organisations are paying (to try to pay less where the volumes are higher), as well as using cost-effectiveness analysis as standard for decisions about what services to provide and in what quantity. If the government introduced a private sector ‘Risk Adjustment ’, as it was meant to do years ago, medical aids would also become much more affordable to poorer people (because medical aids with poorer patients could be subsidized by the likes of Discovery, as recommended by the HMI).

Too much power

We should be worried about the government pilfering from the NHI Fund given its pilfering elsewhere (including from health budgets in various provinces, clearly). We should also be particularly worried about this since the Minister of Health has vastly too much power as set out in the NHI Bill. As Associate Professor Susan Cleary recently mentioned, the Minister’s title is repeated over 140 times in the NHI Bill, including in areas giving him oversight of highly technical details of the Fund. It is not clear that an NHI Fund is the best way to proceed, in fact, given the potential for corruption, and there are other options that should be considered such as an independent negotiating body that doesn’t actually touch any money itself, at least in the short term.

Potential to save money

But that aside, let’s focus on the potential to save money. This is not particularly in the public sector, in fact. Although waste and theft can be common and quality can be questioned, services are overall still a relative bargain. The private sector should be the main target, since it essentially steals money too (called ‘rent-seeking behaviour’ in economics) by making extravagant profits in terms of the ‘oligopolization’ (centralisation of market power) of the private hospital sector, for one, as clearly demonstrated in the Health Market Inquiry. Private specialists also sometimes charge three times what a reasonable price apparently is (though of course that rate should be properly negotiated) within the law and overseen by the Health Professions Council of South Africa (HPCSA). Pharmaceuticals are also still unnecessarily costly in the public, but especially the private sector.

To come to my point, a number of us researchers and policy makers have been having stimulating debates about what the way forward should be for NHI on an active list-serve with 500 members – primarily Health Policy and Systems Researchers and health economists. The list-serve is administered by Dr Jill Olivier (see contact details on UCT website to request to join) on behalf of the Public Health Association of South Africa (PHASA).

Shift focus of NHI

As a result of these and other debates, I am now convinced that the focus of NHI needs to shift from talking about needing to fix the public service first, which is not a financing reform and will arguably take forever, to the NHI Fund, or health financing reform more generally, needing to save money first and especially in the private sector.

Why? Because that is the first step, and the real test, really, on whether the NHI Fund is able to do its job as a strategic purchaser. If successful, medical aid costs could go down and the people who pay the most (too much) for health care would be a lot more open to talking about redistribution or joining a mandatory scheme that comes with a price tag. The savings could also potentially be redistributed to the underfunded public sector through a financing mechanism such as the NHI Fund (or another independent body), but that would still mean at least medical aid costs wouldn’t increase. Given the stagnant economic and fiscal (government spending) situation, that’s a very good thing. Also, the middle class could get behind the solidarity element in NHI quite easily if they didn’t have to pay more for it (at least at first) and so could employers if they didn’t have to contribute to a new tax. Then the NHI Policy might even be universally popular – a far cry from the current situation.

It would also be implementable. Negotiating down private (and public) sector costs centrally is something all governments that care about their citizens do and is key to NHI but can be implemented without or before introducing a mandatory medical aid. It is something the public sector here should be able to do since it already pays a lot less for its services relative to the private sector (including pharmaceuticals).

I stress ‘should’ because why not test it first? Especially given all the controversy over whether we have the institutional or human resource capacity to do it. The private sector should not be as expensive as it is, and the public sector is highly under-resourced when you ignore the large and necessary injection of cash from Treasury for HIV/TB services, and not much else, over the past two decades. It is also well-known that we spend a lot on health already, around 9% of GDP, and have some of the worst health outcomes relative to other Middle-Income Countries.

Private specialists like surgeons, and hospital groups like ‘Life’, won’t like it, but they won’t like anything with the letters ‘NHI’ or ‘UHC’ on it. As Marsha Orgill from UCT put it to me, some specialists might just have to move from Bishop’s Court to Newlands. The bottom line? If NHI has a hope of going through as a progressive policy, it needs as many proponents with bite as possible to counter the various, vested interests.

  • Dr Ashmore is a health economist who currently works for the SA Medical Research Council’s (SA MRC) UHC Collaboration, was previously a consultant to the WHO and USAID, and was Deputy Country Director for Doctors Without Borders. He has a PhD in Health Economics from UCT and has also worked in Ethiopia, Kenya, Malawi and Lesotho.
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Health department considering private sector reforms

The Competition Commission’s landmark Health Market Inquiry (HMI) into the private healthcare sector has delivered both a thorough diagnosis of problems in the sector and wide-ranging prescriptions for fixing these problems. It however remains unclear whether the Department of Health (DoH) has an appetite for implementing the prescribed solutions.

Speaking to Spotlight about the report, which found the private sector to be both inefficient and uncompetitive, and marred by inexplicably high and rising costs, DoH Deputy Director General for National Health Insurance (NHI), Anban Pillay, was both opaque and optimistic. “We need to study the recommendations of the HMI report. These recommendations are intended to address a particular problem which we must appreciate,” he said.

“The regulation of suppliers in terms of pricing, outcomes and value for money are very important success factors for the NHI and are reflected in the NHI Bill. The [HMI] recommendations could benefit the NHI by, amongst others, achieving lower prices, improved understanding of health outcomes and quality of care in the private sector, [and] key health indicators of users in the private sector.”

However, he failed to identify a timeline for the DoH’s investigation into the relevance of the report’s findings.

The HMI was launched in January 2014 to probe the high prices and uncompetitive nature of the private healthcare industry. Initially set to be completed within a year, the report launched in Johannesburg last Monday comes after 69 months of expansive work including consultations with industry, experts, government and the public.

The report found that there had been a ubiquitous failure on the part of both government and the private industry in terms of regulating the sector. These regulation failures have resulted in, among other issues, inequitable geographic distribution of facilities and providers (currently concentrated in economic hubs), high and rising costs of services (with no mechanism to curtail the increases), and a lack of evidence to show that the significant financial investments have caused health outcomes to improve (as there is no effective and transparent monitoring mechanism in place).

To remedy these issues specifically, one of the HMI’s most important recommendations is the establishment of a supply side regulatory authority that will be independent from both government and the private sector.

However, Russell Rensburg, from the Rural Health Advocacy Project, questioned how this body “would fit”, under a unified NHI system. He, and a number of other experts speaking at the report’s launch, suggested that these functions could be housed under the existing Office of Health Standards Compliance (OHSC).

But Pillay disagreed with this argument and implied that such a body may have a purpose under the NHI.

“The mandate of the OHSC relates to monitoring and enforcing compliance with norms and standards. The supply side regulator as proposed by the HMI relates to price regulation, hospital licensing, value for money purchasing and health service monitoring. The proposal of the supply side regulator does not overlap with the role of the OHSC,” he said. “We need to evaluate whether the need for a supply side regulator will be the most efficient way to implement the recommendations or whether there are alternative mechanisms to do so.”

Rensburg argued that, due to “limited technical capacity”, a supply side regulator that covers both public and private providers “may be more cost effective”.

An important question, considering the nature and findings of the report, is: Before contracting with private providers under the NHI, could the DoH effectively curtail the inexplicably high costs in the sector without implementing the HMI’s recommendations?

“Yes,” said Rensburg. “The HMI report shows how the fee-for-service model can be abused and, for the NHI, the DoH is proposing a different payment system of fixed fee rates that addresses this issue.”

But according to the HMI report the DoH has largely failed to regulate the private sector effectively.

“The DoH had made several attempts to regulate the private health sector however these efforts were resisted. The general approach of the private sector was to challenge all regulatory efforts in court and frustrate our regulatory efforts. The general attitude had been ‘all is well in the private sector – leave us alone’. Hence the need for us to approach the Competition Commission to investigate these matters through an independent panel,” explained Pillay.

However, others including human rights activist Mark Heywood, believe that the DoH’s failure to implement the HMI recommendations would be a mistake and that the successful implementation of the recommendations would, among other things, make it more difficult for the industry to resort to litigation to resist regulatory efforts.

“If the DoH fails to act on these recommendations, what they will end up doing is extending the effect of the very inequality and problems with private healthcare sector that they spent so much time decrying,” he said.

These inequalities include inequitable geographical distribution of providers as well as “inequitable access to oncology services and certain specialists”.

“To get the desired outcome of these recommendation you can’t implement them partially, you have to implement them all together as a whole, with the intended outcome being a more transparent, better-governed, more affordable, better-quality, better-measured and better-for-health-outcomes private health system,” he added.

Professor Alex van den Heever, from the University of the Witwatersrand, said that if the “medical scheme system isn’t made sustainable, which is the system also proposed for our version of universal health coverage, the entire country’s health system is in trouble”.

On Monday, the report was handed over by the Competition Commission to Department of Trade and Industry Minister Ebrahim Patel who said he would then deliver it to Health Minister Dr Zweli Mkhize, after which it would be submitted for the consideration of Parliament.

“We need to determine whether [implementing] the recommendation is the best option given our current NHI implementation plan. It may well be possible that many of the problems will be addressed through the NHI implementation,” said Pillay.

Heywood said that the recommendations are not “at odds” with the NHI.

“Also, during the optimistic seven-year timeframe set by the DoH until the NHI fund becomes functional, they don’t have plans on how to deal with the current gross inequalities between the private and public sector. If they don’t consider the recommendations they will wait until 2026 to deal with this, but if instead they do, they can start to deal with this tomorrow morning,” he said.

Rensburg, however, believes the HMI to have been an important process, regardless of whether or not the recommendations are implemented as it provided significant “lessons for broader reform”.

“It confirmed what many suspected is happening and now there is evidence to back this up. All the findings and recommendations provide a list of opportunities and lessons that will contribute to the transition to a universal health system, and should be seen as such.”

Said Van den Heever: “The private sector has to be regulated; it’s only partially regulated at this point. It needs the regulatory framework to address the structural market failures typical in the health space and to make sure the system is stable and not subject to capture or corruption either. Without that we don’t have a health system: We have a broken public system and a broken private system.”

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Spotlight on NHI: Why an Office of Health Products Procurement?

The Office of Health Products Procurement (OHPP) is an entity newly introduced in the 2019 version of the National Health Insurance (NHI) Bill. While much remains unclear about the rationale for and function of the OHPP, the Bill nevertheless gives us some important pointers.

The NHI Fund has various functions, which include actively purchasing health goods and health related products from health care service providers, health establishments and suppliers that are certified and accredited in accordance with the provisions of the National Health Insurance Act, the National Health Act and the Public Finance Management Act. From section 10(1)(b) of the Bill it appears that the OHPP will be housed in the NHI Fund and is intended to support the NHI Fund by actively purchasing health related products.

What is a “health related product”?

The Bill defines health related products as “any commodity other than orthodox medicine, complimentary medicine, veterinary medicine, medical device or scheduled substance which is produced by human effort… for medicinal purposes or other preventative, curative, therapeutic or diagnostic purposes in connection with human health”. The definition is confusing and excludes medical devices that fall under “health goods”. The phrase “orthodox medicine” is not found in the Medicines and Related Substances Act and is not defined or used elsewhere in the Bill.

The Fund is still responsible for purchasing health goods but medical devices (a form of health good) are meant to be procured by the OHPP. Health goods are defined broadly to include “medical equipment; medical devices and supplies… for the promotion, preservation, diagnosis or improvement of the health status of a human being”. Law must be as clear and as certain as possible – unfortunately, as the above shows, the parameters within which the OHPP will operate are uncertain.

Section 38 of the Bill provides a little more detail on the OHPP. It says that the office will be the central body for the public procurement of health-related products as well as medicines, medical devices and equipment for the accredited facilities. This will be done by determining the selection of products to be procured; developing a national products list; coordinating the supply-chain management process and negotiating prices; facilitating cost effective, equitable and appropriate public procurement of health related products; supporting the process of ordering and distribution of products nationally; as well as facilitating the procurement of high cost devices.

How will the OHPP know what to buy?

The Bill does not make it explicit that the OHPP must determine what to procure in conjunction with the Benefits Advisory Committee and District Health Management Offices or that it will conduct regular inspections to assess the needs of facilities in terms of the quantity and specifications of products required. These would be very helpful as the benefits package informs what will be treated and some facilities will already have the necessary medical devices that will need to be maintained appropriately.

Will the OHPP make decisions on behalf of private service providers?

According to the Bill accredited health care service providers and health establishments must procure according to the Formulary; and suppliers listed in the formulary must deliver directly to the accredited and contracted health care service providers and health establishments. Dr Anban Pillay, Deputy Director General in the Department of Health, says that both public and private facilities have access to the products purchased through the OHPP as contracted health care service providers and health establishments may order directly from and pay the supplier.

This arrangement massively increases the amount of procurement going through the government system, without reducing any of the risks of corruption, overpayment, or purchasing of sub-standard goods. In addition, in a worse-case scenario it might limit private sector providers to purchasing from providers of sub-standard goods.

Can a single purchaser improve affordability, availability and acceptability of health care in order to fulfil the constitutional objective of access to health care services?

The answer is Yes. The principle of procuring goods in bulk through a single payer should, in an open and competitive market, reduce the cost of the goods purchased since suppliers will all have to compete to provide to a single buyer with immense negotiating power. However, for this to work, we will require an efficient, transparent and accountable OHPP. If the OHPP is not all these things, it may become a vehicle for large-scale looting.

Unfortunately, the current version of the NHI Bill overlooks the harsh reality that health sector tender processes are often gamed and marred with controversy. One recent example is the case of Mediquip Hub SA, a company with politically connected directors that provided sub-standard theatre equipment to the Free State Department of Health (see Spotlight’s reporting on it here and here.)

Will the OHPP ensure better access to medicines?

Purchasing medicines through a single supplier could play out in various complicated ways. Under the right conditions it could, as has been the case with antiretroviral tenders, lead to much reduced medicines prices. On the other hand, there is an argument that higher private sector prices have in effect subsidised lower public sector prices for some medicines and that the loss of this dynamic might lead to some price increases. While this argument doesn’t really hold with hugely profitable pharmaceutical multinationals, it does point to the complicated dynamics at play.

The OHPP will of course also be hamstrung by various other factors currently impacting procurement. The slow pace at which SAHPRA (South Africa’s medicines regulator) is registering new medicines can delay both the introduction of new medicines and generic versions of existing medicines. It is a situation that will in time hopefully be remedied through the extensive reforms and the backlog clearance programme under way at SAHPRA.

Similarly, medicines procurement in particular will continue to be impacted by the fact that South Africa’s patent laws are unusually favourable to foreign pharmaceutical companies and routinely allows for over-patenting. Cabinet’s adoption of a more balanced IP policy in mid-2018 was a step in the right direction, but the law reform that should implement that policy seems to have stalled – something that will result in some medicines prices being higher than they should be, and other medicines not being affordable through the OHPP, no matter how well it is structured.

*Nkululeko Conco is an attorney at Section27

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Spotlight on NHI: Why private sector reforms are essential to making NHI work

One fear about NHI is that it might result in the destruction of some existing private sector capacity. It is hard to imagine, for example, that under new price controls, and with new procurement mechanisms,  the private hospital that I’ve been fortunate to have access to here in Cape Town will continue to exist in the way it exists now, that is to say with many top class specialists, the latest equipment and high quality of service.

But, just as the high quality of service in parts of the private sector is not in doubt, it is also not in any real doubt that private healthcare in South Africa is generally overpriced. Continued above inflation increases in medical scheme premiums (in some cases over 10% for 2020) are not sustainable.

Something has to change.

The current NHI plans represent fundamental reform of the private healthcare sector, not only the public sector. It represents one option as to how existing private sector capacity can be more equitably shared among the population. It is however not the only option and comes with substantial risks.

It seems likely that the current NHI plans will come as a series of major shocks to the private healthcare system. Some of these shocks might be productive, but some may result in a loss of capacity. Private hospitals might, for example, face a sudden and dramatic loss of income as they are suddenly restricted mostly to charging only NHI-sanctioned rates. Similarly, many specialists might be forced to take what amounts to significant pay cuts – especially if much of the services they provide fall outside the reduced scope of private medical aid schemes. Some healthcare workers might leave the country, some administrators might leave the healthcare sector, many teams of healthcare workers might be broken up and much organisational capacity might be lost.

There is however another route to quality universal health care coverage which does not come with quite the same shocks and risks of lost capacity. The just released report of the Competition Commission’s Health Market Inquiry(HMI) certainly points in the direction of this second way.

In short, the thinking goes something like this.

Firstly, based on the recommendations of the HMI report, we can fix the way in which the private healthcare sector is regulated. This will bring down the cost of private healthcare and allow more people to make use of private healthcare services – something that will mean more people have access to quality healthcare in the short to medium term. Increasing the number of people with private medical aid scheme coverage might be unpalatable to some on the left, but it is likely the lowest hanging fruit available to us if we want more people to have access to high quality healthcare quickly.

The HMI report leaves little doubt that there is urgent work to be done in fixing the regulation of private healthcare. The report reads: “We have found there has been inadequate stewardship of the private sector with failures that include the Department of Health not using existing legislated powers to manage the private healthcare market, failing to ensure regular reviews as required by law, and failing to hold regulators sufficiently accountable. As a consequence, the private sector is neither efficient nor competitive.”

Secondly, and this is the more vital point, we can use reform of the private healthcare sector to start building the infrastructure for NHI. In the words of the HMI report, the HMI recommendations “will provide a better environment in which a fully implemented NHI can function”.

For example, the HMI report proposes that all medical aid schemes should cover the same standardised base package of services. It also proposes the establishment of a supply-side regulator and improved quality measurement. Down the line, the base package offered by schemes can become the NHI’s base package, the supply-side regulator’s role can be expanded to include the public sector, and the quality measurement experiments conducted in the private sector can be used to better monitor quality of care in the public sector.

Similar points are made in the HMI report: “As the state becomes a purchaser of services (from the private sector as indicated by the NHI Bill), it will be able to enter a market where interventions like the establishment of a supply-side regulator, a standardised single obligatory benefit package, risk adjustment mechanism, and a system to increase transparency on health outcomes have already led to greater competition and efficiency.”

In other words, the value in the rapid implementation of the HMI recommendations is that it will leverage some of the capacity and experience we have in the private sector toward building NHI, rather than risking the partial destruction of that capacity.

The timelines are also worth considering.

Under the current NHI plans South Africa is set to switch to a single-payer system, with a dramatically reduced role for private medical schemes in 2026. Thus, the private sector should be around in roughly its current form for at least another six years. This makes it worthwhile to implement the HMI recommendations even if government remains rigidly committed to the current NHI plans. The benefits of implementing the recommendations clearly outweigh the harm in floundering on with the dysfunctional regulatory regime we have now. In addition, it should be kept in mind that the 2026 date may or may not be pushed back by a few years.

An alternative path to NHI

One alternative to the current NHI plans is to set up an initial version of the NHI fund that functions essentially as a medical scheme for people who cannot afford private medical scheme coverage. This NHI scheme could purchase services for all people who cannot afford private medical scheme cover, much as is envisaged under the current NHI plans. It could purchase most services from public facilities and where public facilities cannot provide a service the service can be purchased from private facilities. While this model will not offer the cross-subsidisation from rich to poor one would get in a single large fund, it would be subject to the same risk adjustment mechanisms and other new regulatory controls that private schemes are bound by – with the one exception that it will receive most of its funding from taxes.

This fund could over time be expanded, for example by merging it with GEMS (the medical scheme for government employees), and perhaps also PolMed (the medical scheme for members of the police service) and ParlMed (the medical scheme for Members of Parliament).

In the longer term, however, the idea would still be to have a single-payer system where all medical schemes are eventually merged into one national fund – creating economies of scale, massive bargaining power, and efficient cross-subsidisation. Under this model such a fund will however be introduced more gradually than under the current NHI plans and with more experimentation in the various schemes and with more development of regulatory capacity along the way.

There are of course arguments against the idea of private medical scheme coverage for those who can afford it and an NHI scheme for those who cannot. One argument is that it would become the new status quo and that the political momentum toward a single-payer NHI system might be lost and keep us trapped in our current inequalities. This is indeed a risk, but it also seems that the political momentum would only really be lost if the quality of healthcare available to people improve substantially. If, ten years from now, we have a system where everyone is covered either by private medical schemes or by an NHI scheme, and this system delivers quality healthcare to most people, we would have made massive progress.

Either way, whether one remains rigidly committed to the current NHI plans or open to alternative paths to NHI, it is clear from the HMI report that better regulation of the private sector can only help get us closer to an NHI that works. The question is whether, unlike the previous two Administrations,  the current Administration is up to implementing the required regulatory reforms.

  • Low is Editor of Spotlight
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Landmark report slams poor regulation of private healthcare sector

Government has failed in its duty to regulate the private health sector which is “neither efficient or competitive”, according to the Competition Commission’s report on the Health Market Inquiry (HMI) into the private sector that was launched in Johannesburg on Monday.

This failure in regulation has resulted in a private healthcare market that is “highly concentrated”, “characterised by high and rising costs of healthcare and medical scheme cover, and significant over utilisation without stakeholders being able to demonstrate associated improvements in health outcomes”, according to chairperson of the HMI panel, Justice Sandile Ngcobo.

The HMI was launched in January 2014 to probe the high prices and uncompetitive nature of the private healthcare industry. Initially set to be complete within a year, the report published today comes after 69 months of expansive work consulting with industry, experts, government and the public.

The report lists a number of areas in which government has failed to effectively regulate the private healthcare sector. For example, it describes how the National Health Act of 2003 includes a measure to ensure appropriate geographical distribution of facilities based on population need. However, the National Department of Health’s attempt to implement this measure only in 2014, failed when it could not demonstrate the required underlying regulatory framework necessary for implementation during a challenge in the Constitutional Court.

To remedy this failure in regulation, one of the HMI’s most important recommendations is the establishment of a supply side regulatory authority that will be independent from both government and the private sector.

“This body will have four main functions [namely] health facility planning, economic value assessment, health services monitoring and health services pricing,” said Ngcobo.

This body would provide the regulatory framework necessary to implement a number of measures contained within the National Health Act, including those related to facility licencing that, up until now, the government has been unable to action, argued the report.

This body will also serve to, among other things, solve issues related to excessive costs related to prescribed minimum benefits (PMBs) which funders, by law, have to pay for in full. This situation has allowed providers to charge inordinately high rates for PMB-related services.

The proposed new regulatory authority will set maximum tariffs for PMBs as well as reference tariffs for all other health services.

Members of civil society have previously raised concerns that the significant effort made to produce these findings may be ignored by government considering the state’s focus on implementing National Health Insurance (NHI) by 2026.

However, Ngcobo argued that, under the NHI, the government will become the dominant buyer of services from private providers, and would benefit from a more competitive, and hence affordable, private healthcare sector.

“The NHI is some years away… and private companies will continue to operate in the interim and beyond. We are confident that our recommendations will create an environment under which the NHI can function efficiently and effectively and deliver on its promise,” he said.

Minister of the Department of Trade and Industry, Ebrahim Patel, received the report from Competition Commission commissioner Tembinkosi Bonakele. Despite the fact that the HMI’s recommendations would need to be actioned and led by the Department of Health, Health Minister Dr Zweli Mkhize was not in attendance at the report’s launch.

“We want to bring very careful concentration to [this report]. I will hand one of the copies to the Minister of Health who will lead the thinking and policy work on the recommendations that have come out here,” said Patel.

Bonakele said that this is the “first time” in South Africa’s history where a wide-ranging investigation into the nature of the country’s private sector has produced results and is also the first instance that “we have some kind of a blueprint of how to work together in the private healthcare space to bring about the constitutional injunction on access to health as well as equity”.

“We are looking forward to leadership from the Department of Health in this regard,” he said.

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Don’t get stuck in HIV triumphalism, warns Linda-Gail Bekker

Now is not the time to get stuck in complacency and triumphalism over the gains made in the global HIV/AIDS response, former president of the International AIDS Society prof Linda-Gail Bekker said this week, stressing that “there is still work that needs to be done”.
Bekker who is one of South Africa’s leading HIV researchers and also the director of the Desmond Tutu HIV Centre at the University of Cape Town (UCT) led a seminar at the University this week where she presented findings of the 2018 report by the Lancet medical journal and the International AIDS Society on strengthening the HIV/AIDS response in working towards the United Nations Sustainable Development Goals.
This reminder comes as the United Nations General Assembly this week held a high-level meeting on universal health coverage at a time of increasing and competing health pressures needing attention.

Too early for triumph
Touching on issues around the future of the global HIV response Bekker said there are many gains in the fight against the epidemic. “But there is also a very real anxiety that many assume we have come to the end of the era of the (HIV) emergency.” This sentiment is reflected in the decrease in global funding for HIV/Aids. The Lancet report cited a 20% dip in HIV/AIDS funding between 2013 and 2016.
“We are concerned about the complacency that set in on the one hand and also the triumphalism that created the terrible mix of that’s it – we are done,” said Bekker. She stressed that ways must be found to leverage everything learnt in the last 30 years of what she labelled the “most extraordinary public health intervention”.

Keeping a seat at the table
“We need to make sure we stay at the table in this post emergency era and maybe the way is to make sure we join hands with other (health) priorities that are also at the table,” Bekker said. “If we do this consciously and systematically our place may be secured.”

She warned there is concern that if HIV is moved out of the equation too soon “we will see an epidemic come screaming back in the most extraordinary ways”. “So, it is about not disengaging too soon and then regretting it because the epidemic will reappear.” Russia is a good example of this, she said. “Russia is a huge gap in the world at the moment. It is the only place that has really seen an increase in infections and this is mostly people who are injecting drugs. So, again it is also about politics as the current administration denies that intravenous drug use should be given any kind of treatment or any kind of recognition and that is why the epidemic is out of control in this community in Russia.”

Mapping the HIV/AIDS response over the years, Bekker said the first era was one of despair where millions died. “Then we had an extraordinary time of hope and turning the statistics around and now more recently we have a much too early triumphalism over the idea that we have solved AIDS. With more than 2 million people getting infected and many of them babies, this is simply not true.”
She said treatment figures are up and deaths are down but more should be done in terms of prevention. Despite having the means to prevent mother to child transmission, there are still countries like Nigeria that needs support to reduce mother to child transmissions, Bekker notes. “We are still seeing way too many children in the world today who face a lifetime with HIV infection.”

Towards global health solidarity
Bekker also reminded attendees at the seminar there are still many opportunities to use what was learnt in the HIV response thus far. “The question is how do we in our response join hands in ushering in a new era of global health solidarity?” Integrating services by using multi disease platforms where non-communicable diseased can be picked up and HIV averted at the same time is one way to go, she said. “So, the next stop is to talk about co-locating and integrated services for HIV and related health conditions. South Africa has been doing it for some time but this is not the case everywhere. These are the type of opportunities we should not miss out on and that is how we keep our place at the table.”

Read the full Lancet/IAS report here

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Spotlight on NHI: Could NHI fix emergency medical services?

Mothers give birth in the back of bakkies and children die because ambulances arrive late if at all. This is the current reality for many people trying to access emergency medical services in South Africa.

Underlying this reality are deeply entrenched structural and capacity problems. Currently most provinces simply do not have enough ambulances. Ambulances often languish for months in depots awaiting repairs. In addition, there are insufficient numbers of intermediate life support and advanced life support paramedics in South Africa, meaning that ambulances, when they do arrive, often merely act as patient transport vehicles. All this is made worse by limited planning, coordination and management capacity in many provincial departments of health.

South Africa’s new National Health Insurance (NHI) Bill emphasises that everyone has the right to emergency medical treatment as stipulated in section 27 of the Constitution. By shaking up the way in which emergency medical services are organised and paid for, NHI has the potential to take us closer to realising this Constitutional right, but for that potential to be realised will require ambitious reforms and careful structuring and implementation of NHI.

How will EMS work under the current NHI Bill?

The NHI Bill stipulates that the NHI Fund will purchase services from both public and private ambulance providers. The details of exactly how this will work is however still worryingly unclear. From the user side however, the idea is that there will be a single number to call no matter where in the country you are and whether you need a public or a private ambulance. Both public and private emergency medical services would be paid, according to section 35(4)(a) of the Bill on a “capped base-based fee basis with adjustments made for case severity, where necessary”.

Broadly speaking, it seems that private ambulance services would be contracted individually by the NHI Fund but provinces, as “managing agents”, would provide public ambulance services.

According to section 39(3)(b) of the Bill the NHI Fund will conclude legally binding contracts with health establishments certified by the Office of Health Standards Compliance (OHSC) and with any other prescribed health care service providers to provide emergency medical services. This means that the Fund will have the power to contract with emergency services providers directly. It is not clear however whether the OHSC will be tasked with inspecting ambulances and ambulance bases.

For public emergency medical services, another provision in the Bill (section 32(2)(a)) states that the Minister may delegate to provinces as management agents, for the purposes of provision of health care services, and in those cases the Fund must contract with sections within the province such as provincial tertiary, regional and emergency medical services. According to the Bill these “public ambulance services must be reimbursed through the provincial equitable share”.

Either way, there isn’t much here that will change from how things are done now given that provinces will still use money from their equitable share to run the service themselves, although equitable share allocations are likely to be significantly smaller and substantially reconfigured.

A further complexity arises in the distinction between emergency medical services and ambulance services in the proposed addition of section 31A to the National Health Act. Section 31A(3)(k) provides that one of the functions of the District Health Management Office is to “facilitate the integration of public and private health care services such as emergency medical services but excluding public ambulance services”. What this means, in the light of the definition of emergency medical services as “pre-hospital acute medical treatment and transport of the ill or injured”, is unclear.

Serious regression of services for asylum seekers and undocumented people

On the face of it, NHI appears to promise emergency medical treatment for all however, the Bill says that asylum seekers and “illegal foreigners” are ONLY entitled to emergency medical services and services for notifiable conditions of public health concern. “Emergency medical services” is defined narrowly as “services provided by any private or public entity dedicated, staffed and equipped to offer pre-hospital acute medical treatment and transport of the ill or injured.” What this really means in relation to EMS for asylum seekers and “illegal foreigners” is that this group of people will be able to call an ambulance and be assisted by paramedics but will have to pay for services if they are admitted to a hospital.

This is a serious regression of services for asylum seekers and undocumented people. Providing only ambulance services means that an undocumented pregnant woman could call for an ambulance and be assisted, but would not be able to give birth in a hospital without paying. This will potentially result in increased maternal mortality or children born with disabilities because of obstetric complications. It means that a gunshot victim who is awaiting his refugee permit can be treated in an ambulance but will need to be dropped off at home before receiving needed hospital care if he cannot afford to pay.

The shortcomings in relation to access to comprehensive emergency medical treatment for asylum seekers and undocumented people clearly require amendments to the Bill, among other reasons to prevent legal challenge.

A lost opportunity?

Despite these various complexities, emergency medical services could nevertheless be an area where the right kind of NHI could lead to substantial improvements in the quality of service many people receive. This will however require that government strategizes more ambitiously and puts in place appropriate funding mechanisms, contract management and implementation structures. Unfortunately, there is no indication that this kind of foresight and creative thinking is present in the current NHI plans.

In fact, since provinces will continue to manage public emergency medical services under roughly the same funding model as present, there isn’t much reason to think things will improve.

The one aspect that seems new, the wider contracting of private ambulance services, comes with severe risks if not properly implemented. Spotlight has previously reported on  dubious contracts for ground and air ambulance services in the Free State, Limpopo, Mpumalanga and the North West. Apart from questions over how these contracts are awarded, Spotlight also reported on alleged overcharging and sub-standard quality of service from the contracted private providers in these cases. In these cases private ambulance services was definitively not superior to public services.

It is essential that lessons should be learned from these cases when we start contracting more private ambulance services under NHI. If we do not address the particular ways in which ambulance services can be milked, we risk both large-scale corruption and further decline in the quality of service.

It is also critical that regular inspection of both public and private ambulances and ambulance bases should be conducted to ensure compliance with EMS regulations. Ideally, this quality control should be done by the OHSC, given the OHSC’s greater independence than, for example, provincial departments of health. The OHSC should urgently be mandated, funded and capacitated to do this work.

The optimal use of the limited emergency medical service resources available to us will also be critical if we are to turn the current situation around. Talk by some in government of the “Uberisation” of these services should be welcomed – at least in as far as it means that ambulance trips will be rationally allocated and closely tracked via GPS. Together with the Uberisation, we will also require increased fraud detection mechanisms to prevent overcharging.

Maybe more fundamentally though, what is needed is a national strategy to ensure that we train and retain enough paramedics and purchase and maintain enough ambulances to meet the needs of all who live in South Africa. NHI on its own is of course not going to be this strategy, but NHI is the one major shake-up that might provide a window of opportunity in which such a strategy can be implemented. Right now, it seems that opportunity will be spurned.

  • Stevenson is the Head of Health at SECTION27. Low is the editor of Spotlight.
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Spotlight on NHI: Exclusion of vulnerable groups opens NHI up to legal challenge

By Tlamelo M Mothudi

It is a widely held perception that poorer South Africans rely on the public health sector for their health needs, while a smaller and more affluent section of South African society uses almost exclusively private health care providers. However, this is not an entirely correct summation of the current health situation. Research has demonstrated that depending on prevailing circumstances and your health needs, a far more significant number of South Africans use a combination of both private and public healthcare services.

With an unemployment rate of 27.6% in 2019, the highest in almost 15 years and the high cost of private medical aid, more and more people will rely on public healthcare services. As such, the idea of a National Health Insurance (NHI) system that is well designed and well implemented to ensure that everyone has access to an equitable healthcare package makes perfect sense.

The preamble to the NHI Bill seeks to recognise the socio-economic injustices, imbalances and inequalities of the past and the need to establish a society based on democratic values, social justice and fundamental human rights.  It bears in mind the International and National instruments that call for the rights of everyone to the enjoyment of the highest attainable standard of physical and mental health and for State parties to take necessary measures to protect the health of their people and ensure that they receive medical attention when they are sick.

The Constitution of South Africa, as the supreme law of the land, affirms the right to equality, human dignity and bodily and psychological integrity. The Constitution upholds and protects the right that everyone has to access healthcare services, including reproductive health services, the right to emergency medical services and the right of every child to basic healthcare services. This right is confirmed by the National Health Act (NHA) which guarantees the provision of free primary healthcare services for certain categories of persons in South Africa.

In a country where rights are constitutionally enshrined, why then have so many been left behind and without cover by the NHI Bill?

The term “everyone” as used in section 27(1) (a) of the Constitution includes stateless persons, migrants, asylum seekers, undocumented foreigners and visa holders. The Constitution expressly provides that the Bill of Rights enshrines the rights of “all the people in the country” and the Constitutional Court has confirmed that “everyone” in section 27 of the Constitution cannot be construed to refer to only citizens. As such, qualification for the rights enshrined and protected in the Bill of Rights is not based on one’s citizenship or nationality. This principle is something that the NHI Bill seems to have overlooked.

What about stateless persons?

While the definition of who qualifies as a stateless person is couched with uncertainty due to states not agreeing on who qualifies, Article 1 of the 1954 Convention on the Status of Stateless persons provides the most widely accepted definition of a stateless person in international law. Under this Convention, a stateless person is defined as a person who “is not recognised as a national by any State under the operation of its law”.

The definition of statelessness is wide enough to cover people who ought to be citizens of a particular country but who are not recognised as such by the state in question for various reasons. It may also cover persons who qualify for nationality under the law but have been denied recognition due to lack of sufficient proof of citizenship. Within the South African context, statelessness and child protection as prescribed under the 1989 United Nations (UN) Convention on the Rights of the Child springs immediately to mind, with the following categories of children inimically affected:

  • Orphans, abandoned children and unaccompanied foreign minors who come to South Africa with parents or relatives who later disappear due to death, neglect or abandonment.
  • Children of South African citizens who are orphaned or abandoned and who do not enter the child protection regime.
  • A child with one parent who is a South African citizen and another who is a foreign parent whose birth is not registered before the citizen parent’s death.

Article 7 of the UN Convention of the Rights of the Child places an obligation on member states to ensure the implementation of the right of the child to be registered after birth and be assigned a nationality, especially where the child would otherwise be stateless.

What about people who are travelling to South Africa?

The Immigration Act makes provisions for applicants to apply for and be granted a visa to be in South Africa for reasons of study, work, medical reasons or research. While in South Africa, the NHI Bill requires that they have travel insurance for the duration of their stay. International travel insurance covers medical and related expenses and assistance service, evacuation, cancellation, curtailment, personal liability, personal accident, lost or stolen luggage, travel delay, legal assistance, expenses incurred due to illnesses or injuries during travels, trip interruption or cancellation, loss of passport or wallet, assistance in the event of a natural disaster and repatriation benefits. Complications may arise under the NHI when people travelling to South Africa require medical attention or need to be hospitalised. According to the Bill, to get medical attention, they would need to be registered as a healthcare user and to be registered, they would have to comply with the requirements of section 5(5) of the Bill. These groups of persons would not comply and it is not clear from the Bill how they would access treatment and care.

In the absence of registration as a healthcare user, anyone seeking healthcare services from an accredited healthcare provider or establishment, will not be able to access healthcare services. Registration as a healthcare user requires that the applicant produce an identification card, original birth certificate or a refugee card. Those who fall within the definition of stateless persons will not be able to register as a healthcare user and as such, will not even have access to emergency medical services because they do not fall within the “Bill’s” definition of refugees and asylum seekers.

While we endorse the idea of the NHI and acknowledge that it seeks to fundamentally change healthcare in South Africa and make it more equitable to all regardless of one’s socio-economic background, it is imperative that it meets and passes constitutional muster. As it stands, the Bill leaves already vulnerable groups either with no access to healthcare services, or with insufficient healthcare cover. To deny vulnerable groups access to healthcare and to discriminate against them on the grounds outlined as “prohibited grounds” in the definition section of the Promotion of Equality and Prevention of Unfair Discrimination Act, is automatic discrimination. If this is not rectified, the Bill will be open to constitutional challenges.

Denying vulnerable groups, including stateless persons and people who are not ordinarily resident in the country, access to the same healthcare services offered to South African citizens and permanent residents violates constitutional rights and international conventions, of which South Africa is a signatory. This is of grave concern.

*Tlamelo M Mothudi is a health researcher at the Public Service Accountability Monitor (PSAM).

 

 

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Spotlight on NHI: Will inadequate governance arrangements be NHI’s Achilles heel?

By Tendai Mafuma

The preamble of the National Health Insurance (NHI) Bill states that the purpose of the bill is to achieve universal access to quality health care services in South Africa. It proposes the establishment of a centralised NHI Fund that would be responsible for purchasing healthcare services. According to Chapter 10 of the bill, which deals with the financial matters, most of the funding will come from tax revenue.

Just like Eskom, Prasa and the SABC, the NHI Fund will be a public entity as defined by the Public Finance Management Act (PFMA); it will however not be a state-owned entity. According to the Bill, the   Fund will be an autonomous public entity listed under schedule 3A of the PFMA. Schedule 3A contains public entities that have the mandate to fulfil a specific economic or social government responsibility; it includes entities such as the Road Accident Fund and Legal Aid South Africa.

Considering all the unflattering and, frankly, dire reviews of state-owned enterprises (SOEs) such as Eskom and the SABC, it is not surprising that there has been a lot of commentary and concern about the governance of the NHI Fund.

Speaking at a health conference on 27 August, Minister of Health Zweli Mkhize said the NHI would be rolled out in a manner that does not pose the kinds of economic risks associated with Eskom. He said “strict accountability shall be enforced and a strong anti-corruption team will be in place to prevent the risk of corruption and act to uproot corruption using advanced technology to monitor transactions”.

Transparency and accountability

Concerns about governance of public entities are not only to safeguard against inefficient use of resources and corruption, it is also because good governance speaks to transparency and accountability. As the Constitutional Court noted in United Democratic Movement v Speaker of the National Assembly and Others, “It is through good governance that the improvement of the quality of life of all citizens and the optimisation of the potential of each will be achieved.”

The former secretary-general of the United Nations Kofi Annan defined good governance as the creation of well-functioning and accountable institutions that citizens regard as legitimate, through which they participate in decisions that affect their lives, and by which they are empowered.

Earlier this year the Dullah Omar Institute published research on the governance issues in several SOEs with a focus on the regulatory framework for the appointment and dismissal of board members and executives. In a nutshell, the research identified three issues – extensive powers of the executive, lack of transparency, and lack of room for public participation.

Unfortunately, some of these issues identified find themselves in the Bill in relation to the NHI Fund. Arguably, governance of the fund also falls short of Annan’s definition of good governance.

Public participation and transparency

The NHI Fund board, made up of not more than 12 people, is appointed by the minister, and is accountable to the minister. The only references in the bill to “public participation” in the board appointment is through “public nomination” of candidates for the board in Section 13(2) and “public interviews” to be conducted in Section 13(3)(a). It is not clear whether by “public nomination” the Bill anticipates that the names of the nominated candidates and their nominators will be made public, or if it simply means that members of the public are invited to nominate candidates. It is equally unclear what is meant by “public interviews”. Does this mean the public can make representations or does it mean the public will be spectators, similar to the interviews by the Judicial Services Commission?

The Bill provides for members of the public to form part of the ministerial advisory bodies. Of importance is the NHI’s Stakeholder Advisory Committee, established in terms of Section 27 of the Bill, which is made up of a wide range of stakeholders. However, the Bill offers no insight into the function of this body.

Powers of the Minister

In terms of Section 13 of the Bill, the minister will be vested with enormous power to appoint board members. Following the nomination process for board member appointments, the minister must appoint an ad hoc advisory body to conduct public interviews of the shortlisted candidates and forward its recommendations to the minister for approval.

There is no indication of who is responsible for preparing the shortlist and the bill is also silent on the criteria for selecting members of the ad hoc advisory body.

Why is this of concern? It is important that the appointment of board members and executives is done in a transparent manner that instils public confidence. For example, to inspire confidence in the new SARS commissioner, one of the recommendations made by the Nugent Commission of Inquiry into Tax Administration and Governance by SARS was that members selected for the interviewing panel “should be apolitical and not answerable to any constituency and should be persons of high standing who are able to inspire confidence across the tax-paying spectrum”. This level of detail is lacking in the NHI Bill.

The minister also plays significant roles in the appointment of the NHI Fund CEO and the ministerial advisory committees that will determine the benefits package and pricing. Although the board is involved in the appointment of the CEO, Section 15(4)(d) strangely states that the board must inform the minister of any advice it gives to the CEO.

In stark contrast, the role of Parliament in the appointment of both board members and the CEO is limited. The extent of its involvement is that the minister must notify it of the appointment of the CEO.

Section 8 states that the minister may remove a board member who is unable to continue to perform their functions of office. In terms of Section 9, the minister may dissolve the board on good cause. Both circumstances are for the determination of the minister and can be susceptible to political whims.

The extensive powers of the minister is one of the issues warned against by the Dullah Omar Institute because centralisation of powers to the executive coupled with lack of transparency opens up room for political interference. The Institute proposes that in order for there to be accountability and transparency, there needs to be a degree of separation between the executive and the administration. There also needs to be parliamentary oversight not only to ensure effectiveness and evaluation of programmes, but also to allow public scrutiny through elected representatives.

The NHI Fund will receive substantial amounts of public funding and will be responsible for the healthcare services provided to millions of people in South Africa. It is vitally important that appropriate, efficient and effective governance structures are created to support it. It will serve us well to draw lessons from some of the already existing public entities because the sustainability of the NHI will rest squarely on good governance of the fund.

Mafuma is a legal researcher on the health team at SECTION27.