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.

Spotlight on NHI: Trust deficit overshadows industry meeting

Discussions on the National Health Insurance (NHI) Bill may be shifting from the “why” to the “how” but as much as specifics remain worryingly vague, even more elusive is the belief that the government has the ability to match its ambitious rhetoric with effective governance and delivery of NHI.

A “trust deficit” was an underlying sentiment expressed at a day-long conference on health industry insights and innovations at the Gordon Institute of Business Science (GIBS) last week. Health sector representatives who attended also said the “devil is in the detail” of the bill.

Some of these details – and perhaps also the devil – were outlined by Sasha Stevenson in Spotlight last month, pointing out that the current iteration of the bill is marked by over-centralised power that lies in the minister’s hands, rather than Parliament’s. Accountability and management structures at all levels also remain ill-defined and this extends to the Office for Health Products Procurement, a newly included structure in the draft bill. Patients’ avenues to complain and for recourse are also limited.

Addressing the conference, Health Minister Zweli Mkhize acknowledged that universal health coverage as an efficient reality for South Africa has been met with widespread doubt, disdain and even derision. “People are put off by maladministration, incompetence and corruption and what we are hearing from all these state commissions of inquiry,” he said.

“We want to build structures that will reinforce oversight of the NHI Fund with things like SIUs (Special Investigative Units), technology and training. We want to correct the things that are wrong in the system and build up in a phased manner so that in the next five years we will start seeing a difference in how services are run.”

Mkhize said one oversight measure included working with countries that had established universal healthcare models. He said a first batch of 30 managers from the Department of Health would be sent to countries like the United Kingdom, Japan and France to build human capacity. He also said academic institutions and a number of health professional bodies were “all in” with the government in playing their roles in finally getting an NHI in place – something he said that had been on his agenda for 30 years.

He added that the government was taking lessons from Japan, which has the highest population of the longest-living people in the world. Japan started its journey towards universal healthcare in the late 1920s when their economic outlook was woefully bleak.

“There will be no right time to start the NHI, but we must start now as an investment in health and an investment in developing human capital and the prosperity of the country,” Mkhize said.

He acknowledged that the bill before Parliament had controversies and had induced everything from anxiety to wild speculation to fear mongering.

“We have had some people saying this bill is unconstitutional, [but] that is just politics. Others say the NHI will bankrupt South Africa, I beg to differ; we will start with what South Africa can afford and this will evolve. People have also said that the NHI is about nationalisation of private care, but there is no way that we can be taking over a private facility,” he said.

Mkhize said contracts and partnerships with the private sector represented an opportunity to “harmonise the sector”. Medical aids, however, have noted that the bill downgrades their role significantly to one of a “top-up” or “complementary” funder. The minister was not specific about funding for the NHI or its ultimate costs, but mentioned options like taxation, mandatory surcharges and collection through employers.

And while Mkhize said conversations still had to be had about the bill, which is out for public comment, he left the conference after taking only three questions.

He missed the responses that followed, including from GIBS faculty member Marius Oosthuizen, who presented the findings of the business school’s recent research into the implications and opportunities of the NHI for the pharmaceutical industry, healthcare funders and providers.

Oosthuizen mapped out future socio-economic and political scenarios for South Africa and matched these with the minister’s NHI wish list. His analysis suggested that there would be enormous hurdles even in a best case scenario.

“People talk about the nine lost years, but not about the nine years it will take for recovery,” said Oosthuizen.

His most fragile scenario showed a vicious cycle of radicalism, populism, low economic growth, mounting debt, downgrades and the upward creep of unemployment. “In this scenario there will be no NHI,” he said.

However, Oosthuizen pointed to “flickers of light” from institutional reform, such as changes in the National Prosecuting Authority, and opportunities offered by technological advances in the medical and health sector that could be capitalised on what he called “co-creation”. The technologies include the trend towards e-medicine such as remote consultations, entrepreneurs and start-ups working independently on interventions such as 3D-printed devices and parts to reduce healthcare costs. There is also a continued surge of body sensors and wearables that make health increasingly digitised and managed personally.

“It raises the question of what we are doing with these trends, technologies and opportunities,” Oosthuizen said, adding that the government should use these technologies better, build capacity, fix infrastructure in the public system and improve public-private partnerships.

“Government is trying to fix the right problem with the wrong instruments and running ahead of the population on NHI before proper engagement. Trust is needed and trust is the consequence of actions. We need leadership, not more talk shops or another summit with another social compact. We need an agenda around real decisions,” Oosthuizen said.

Speakers also raised concerns over the lack of direction, leadership and details in the NHI. Lerato Mosiah, CEO of the Health Funders Association, said active participation was still lacking and the bill was already at its public comment phase. “There is no debate that we have to have an NHI, but how will we roll it out? We want to engage, but our role isn’t clear… We need understanding way ahead of time so we know how to plan going forward.”

Similar sentiments were expressed by Aneria Bouwer, director and tax expert at Bowmans law firm. Bouwer said that while tax to fund the NHI was expected to only to kick in with the phased-in introduction of the NHI in 2026, taxpayers remained in the dark.

“There is a lot of concern over losing medical aid tax credits, additional tax burdens and doubt about whether services on the NHI will be on par with what taxpayers are getting paying for medical aid right now,” she said.

Along with all the unanswered questions, Dr Lance Lasersohn, vice-president of the South African Society of Anaesthesiologists, said there were also many assumptions being made by the government and some inadequate number crunching that weakened the basis on which the NHI Bill currently stood.

“I would argue that we in South Africa don’t have the same level of high intrapersonal trust that a country like Japan has,” he said, adding that a second assumption was that the private sector would have capacity to provide quality services to the 85% of patients who currently rely on public healthcare.

Lasersohn had previously said the NHI could drive more specialists and doctors out of the public sector and out of the country. He pointed to the already dire shortage of doctors of a ratio of 60 doctors per 100,000 people and 25 specialists per 100,000 people.

“Building infrastructure is the easy part, building specialists and having time to do it is a different story – it can take up to 17 years to train a specialist.

“We need to establish trust with government and we need to ensure that doctors are able to ply their trade, and that they are able to give patient-centric high-quality care. This is what our members we polled have said is the most important to them, not remuneration first. We need to nurture this resource and build up slowly towards NHI,” he argued.



Spotlight on NHI: Era of NHI similar to early 1990s

By Russell Rensburg

The period following the release of Nelson Mandela in February 1990 is in many ways similar to the one we are currently navigating. In the nineties, the optimism of the oppressed and dispossessed was tempered by the fear of the previously advantaged of losing a way of life they had come to accept as normal. Stories of their imminent demise dominated fireside discussions. In the years that ensued we began to galvanise around the idea of a country where an ex-prisoner would be president and where the oppressed would work together with their former oppressor for a better society.

The world loved it and despite implementing a set of progressive pro-poor policies, the economy grew at an unprecedented level. Growth was as high as 5% in the noughties. For the emerging middle class the fruits of prosperity was decreased personal income taxes. While employment grew in high skill areas, like manufacturing and financial services, there was also growth in low paying jobs in the services sector. A recent study by Leibrandt and others confirmed that while wages grew at an aggregate level, when the wage growth is viewed at the income distribution level the top end of the labour market benefited to a larger extent. This suggests that despite periods of economic growth that may have benefitted some, income inequality has deepened.

The intensity of current public discourse on race privilege and entitlement – demonstrated in part by the strong showing of populist political formations such as the EFF on the left and the Freedom Front Plus on the right – is not surprising. The lack of temerity from the governing party in implementing reforms against a narrative of state failure has deepened the social divisions, and broader social cohesion is in tatters. Much of the response to the recent release of the long-awaited National Health Insurance (NHI) Bill is symptomatic of this lack of social cohesion.

A cacophony of commentators on the NHI has focused on state capture and the government’s attempt to limit their freedom of choice and destroy the country’s health system. Fix the public system first before you touch private healthcare, they argue.

What about private healthcare?

Some say first implement the reforms proposed in the report of the Competition Commission’s health market inquiry (HMI) into private healthcare (final report due end September). But it’s a little more complicated than that.

The public and private sector compete for skills and specialist doctors. Currently 70% work in the private sector with the remaining 30% in the public sector. Those in the public sector can work as much as 30% of their time in private sector whereas those in the private sector work almost exclusively there. This means that two out of 10 specialists service the needs of 80% of the patients with the remaining eight servicing the needs of the privileged. This commodifies health and the result is that access to the healthcare you need when you need it is based on your ability to pay rather than on your need.

While the HMI report was definitive on many issues regarding the private health market, it did not assess the extent to which health services were of greater quality than available elsewhere nor is there any independent evidence that the private sector does better on health outcomes. As such it makes sense to address reforms at the whole health market.

In addition, some draft HMI recommendations like the introduction of the proposed supply side regulator for private healthcare may become redundant within a universal health system with both public and private providers.

This is not to say that the NHI Bill or the reforms it proposes are without flaws – the challenges with the governance arrangements are clear – for example, the minister of health’s role in the appointment of the NHI FUND board and CEO and the lack of clarity on the role of district management offices, amongst other concerns (which Sasha Stevenson does a good job describing). The issues raised in Stevenson’s piece are fairly simple to address and will go a long way to building public trust in the system. Similarly, analysis provided by Prof Alex Van den Heever also accurately spotlights the particular context within which the reforms need to be implemented.

Is reform possible?

That is not to say that the bill is completely without merit. I understand that, given the current trust deficit in the government, the idea of a centralised fund may be prone to corruption, but to accept it as a singular reason to reject the proposals would suggest that no amount of reform is possible and that we are unable to learn the lessons from the masterclass in corruption of the last decade.

National Treasury is in an advanced stage in tabling a set of procurement reforms that will seek to address the gaps in current procurement – an indication that there is a real willingness to learn and to make our procurement systems more robust.

Over the last nine years we have experienced a number of governance challenges that impacted on the way that provinces dispense their concurrent responsibilities in respect of healthcare delivery. While we have a sophisticated resource allocation formula that distributes nationally raised revenue for the delivery of public services, such as health and education through the provincial equitable share, it is not replicated by provincial governments. In the case of health, as funding declined post 2012, provinces mostly maintained funding at historical levels despite increasing health need and population growth. This resulted in some blunt cost-cutting measures that included delays in infrastructure maintenance and moratoria on filing critical health posts, which have led to a decline in facilities’ capacity to deliver care.

In this context, the centralisation of public sector funding for health into the NHI Fund and decentralising the delivery of healthcare to the facility level is a step in the right direction because it suggests that budgets will be informed by health need rather than historical demand. It is here that we have an opportunity to begin to refocus the health system away from a narrow focus on prevention and cure to the promotion of health in general.

Rural focus

The prioritisation of rural health in section 57 of the NHI Bill presents an opportunity to reframe the discussion of the bill towards a broader development narrative. Returning to unemployment, rural populations are deprived of opportunities, which is compounded by poor access to health, education and housing. Rural youth have among the lowest school completion rates in the country, and have amongst the highest rates of teenage pregnancy. The leading cause of death among rural men is interpersonal violence. It is not surprising that these communities have amongst the highest unemployment rates in the country.

Rural communities, particularly those in former homelands, have amongst the lowest per capita health spending despite having the greatest need for health services. The government has some culpability for the state of rural health, particularly in its neglect of rural health systems as well as wasted opportunities in using its purse to create meaningful skills development for unemployed youth. However, there is an opportunity to do so now.

Through the creation of decentralised contracting units for primary care, dedicated health funding is availed at the sub-district level. Budgets for these units will be based on overall population numbers and adjusted for relative disease burden coupled with service utilisation targets that will take health into the community, as compared to the status quo where funding is based on expressed demand.

Currently 95% of rural communities rely exclusively on the often under-resourced public sector. The NHI proposals allow for the registration of integrated practise groups that will include professionals such as general practitioners and allied health professionals, including occupational therapist, physiotherapists and optometrists to contract with the NHI. The availability of these professionals will contribute to an improvement in primary healthcare by significantly improving current referral pathways. This has the potential to contribute to better health and development outcomes.

A simple example like improving screening of eye health could lead to greater access to spectacles, which could have a massive impact on school outcomes. It’s well documented that access to good nutrition in a child’s early years drastically alters their development outcomes. Community health workers and nutritionists can bring this service closer to the people who need it most. In time, access to health improves the developmental outcomes and could lead to greater economic participation.

A public good

But why can’t the public sector make these improvements themselves? Why do we need to mess with private healthcare as the people on medical aid are already covered? Since the goal is universal health coverage why not focus on those who don’t have cover?

A universal health system that contracts in private sector capacity can ensure that health is treated as a public good and not a commodity as it is currently treated.

Undoubtedly it will take time for the broader investment in health to pay off but there are more immediate benefits. The initial investment in creating the enabling environment for the full implementation of the NHI offers opportunities to contribute to bringing unemployed rural youth into employment and giving them skills. Planned investments in health information systems also provide an opportunity to broaden the availability of these skills to groups currently underrepresented in the technology sector.

So, to end with a rural analogy, will you be at the harvest knowing that to be there requires full participation in toiling and the cultivation required to deliver a successful harvest, or will you watch from afar contemplating all the ways in which the harvest might fail?

Rensburg is Director of the Rural Health Advocacy Project.



Spotlight on NHI: In search of common ground

Since the introduction of the National Health Insurance (NHI) Bill in parliament two weeks ago an enormous amount has been written. Tamar Kahn’s article in Business Day provided probably the most balanced and realistic assessment so far. In the Daily Maverick, Ferial Haffajee highlighted the very real risk of corruption and Mark Heywood’s interview with Health Minister Dr Zweli Mkhize did not do much to allay those fears.

That the Democratic Alliance and the Institute for Race Relations have come out guns blazing against NHI is, of course, not surprising – neither is the uncritical support COSATU and others have given the bill. What should concern all serious people in government, however, is that a wide range of reasonable commentators, people whose values are broadly in line with the principles underpinning NHI, have expressed serious concerns about the workability of the current NHI plans. Many in government might not want to admit it, but there is a real and important difference between those who are ideologically opposed to NHI and those who wish some form of NHI to succeed, but who have valid concerns with the current plans. The road to NHI would be much smoother if those in government and the ruling party were less defensive about the concerns of the latter group.

One reason why people are justifiably disappointed with the NHI Bill is that many issues raised regarding the 2018 version of it have not been addressed in the 2019 version (see Sasha Stevenson’s article in which she outlines what has and hasn’t changed). If consultation continues in this half-hearted way people will quite reasonably start seeing processes such as that around the Presidential Health Compact, and even the parliamentary hearings and submission process on NHI to come, as mere window-dressing. Apart from real and meaningful consultation likely leading to better law and policy, it will also be good for building public understanding and support for the planned reforms.

In addition to concerns about meaningful consultation, there are also various areas of substantive concern.

Firstly, there is a group of people who oppose NHI on mainly ideological grounds – particularly naysayers with a free market fundamentalist bent. Some political parties might score points with certain minorities by proclaiming their ideological opposition to NHI, but in terms of influencing the future course of NHI such opposition will be futile. The political math simply doesn’t add up and given that debates about ideology hardly ever go anywhere, it is probably the one area where limited government engagement is justified.

A second much more serious set of concerns relate to the state’s capacity to implement NHI successfully. Here a distinction can be made between those who say that the state cannot possibly implement NHI and therefore we shouldn’t even try, and those who have concerns about the state’s ability to implement, but who believe that it may nevertheless be worth trying. One variation of these two positions might be that implementation should happen, but more slowly and more carefully than currently planned.

It appears that the bill attempts to address the problem of a lack of state capacity by centralising decision-making. District Health Management Offices, for example, are defined as “national government components”. This arrangement might well make it more difficult for healthcare under NHI to be adaptable to local needs. It might also reduce the sense of ownership people feel over NHI and mean there are fewer people to hold accountable at a local level when things go wrong. Why the drafters of the bill did not opt for a more decentralised system, like the United Kingdom’s National Health Service (NHS), needs to be explained. Either way, we need to have frank and realistic discussions about what the current and potential levels of state capacity means for NHI.

It should also be acknowledged that apart from the financial cost, state capture, corruption and mismanagement, has over the last decade or two destroyed capacity in the public service, specifically in the public healthcare system. In this sense, NHI is starting from a position of weakness and needs concrete and specific plans to overcome this weakness.

A third connected set of concerns relate specifically to corruption. Here too there is a split between those who believe corruption is so bad as to make NHI unimplementable, and those who are concerned with corruption, but who believe the risks can be managed. As with state capacity, where people stand on these issues may change as the bill changes. It is for example possible that naysayers on the current bill, might change their position if it is amended to include stronger anti-corruption measures and more sensible governance arrangements.

The 2019 version of the NHI Bill introduces an Office for Health Products Procurement that will facilitate the purchasing of health products, including medicine, medical devices and equipment for both public and private healthcare facilities. In other words, private hospitals in need of new X-ray machines will procure through this entity, rather than through their own procurement processes. On the one hand, this centralisation can lead to better prices due to economies of scale and being the only, or by far the largest, purchaser in the country. On the other hand, just like many other tender processes, this system might be gamed and contracts might end up going to the politically connected rather than those providing the best quality and value for money. A case could be made that this procurement office should have transparency and accountability requirements defined in law that goes beyond what is required by the PFMA – given that the safeguards under the PFMA have offered little resistance to the tide of corruption in recent years.

Either way, the NHI Bill 2019 comes in a time when there is entirely justifiable public scepticism about the state’s ability to prevent corruption. Should some key enablers of state capture be successfully prosecuted, this may change. In the absence of any such convictions, the case for NHI would be strengthened if the bill contained plausible new mechanisms to fight corruption and if government was more open about the risk of corruption and how they plan to mitigate it. Simply asking the public to place their trust in those currently in government is not good enough.

A fourth set of concerns relate to whether we can afford NHI. Here there are no clear answers. The cost of NHI will depend on a wide variety of factors, including what treatments are and are not covered, how effectively prices are negotiated, and how much overpayment and wastage there is due to corruption. In a sense, we can afford NHI, but exactly what kind of NHI we get will depend on what kind of NHI we can afford.

Another complication in trying to calculate the affordability of NHI is the extent to which one assumes current payments to medical aid schemes and out-of-pocket payments for private healthcare will for all practical purposes be reallocated to the NHI fund. It might well be that what most middle-class people pay for healthcare under NHI in new taxes turns out to be roughly the same as they pay now for private healthcare – although it obviously remains to be seen whether people will get the same value for money.

A fifth set of concerns relate to the NHI’s proposed governance structures and accountability mechanisms. Particularly striking in the bill is the immense power that the minister of health will have over key NHI appointments. Apart from placing NHI at risk of capture through future health ministers, this arrangement sends a signal that political control over NHI and the NHI fund is preferred to the establishment of a technocratic institution accountable to the people through parliament. Oddly, this insistence on maintaining political control can be read as a tacit admission that government itself is not fully committed to the underlying principles of how systems like NHI should work.

There are similarly valid concerns about the lack of accountability mechanisms at the level of district health management offices and contracting units for primary healthcare (CUPs). Unfortunately, the bill does not say much on how these critically important entities will be governed. Will all complaints be sent to an office in Pretoria? Or will there be empowered and accountable decision-makers in your district who you can go to when things go wrong? What happens if a CUP unfairly gives preference to one private provider over another? Put another way, there are credible fears that the system of centralised control currently envisaged will result in a lack of responsiveness and adaptability at a local level.

This presents a major lost opportunity since much of the promise of NHI is precisely that lawyers, accountants and other professionals used to private healthcare will not settle for poor quality service under NHI and thus create greater accountability than what we currently have in public healthcare. The bill should be designed in such a way as to empower rather than hamper such increased public accountability.

Where then are we heading?

One response to all this is to attempt to stop NHI altogether. Given South Africa’s extreme inequality, the state of much of the public healthcare system, and the ANC’s majority in parliament, such attempts are unlikely to succeed. Some temporary victories may or may not be won in the courts, but ultimately the courts will not be able to reject NHI and naysayers can at most hope to delay implementation of NHI. After all, similar schemes do work well in other developing countries that do not have our progressive constitution and there is nothing inherently unconstitutional in the idea of NHI, although the changed roles of provinces in the current bill may present problems.

Opposition parties may nevertheless choose to fight a losing battle against NHI since it will activate a certain segment of their support base. However, just like the ANC’s populist rhetoric around NHI, such a course is likely to polarise the debate further in a way that may serve short-term political ends on both sides, but that in the long term will do little but spread distrust and lower the level of engagement with the substance of how we reform our healthcare system.

A second approach would be to accept that some form of NHI is inevitable and, instead of trying to stop NHI, try to engage constructively in shaping it into something that works. Pointing out that it is not a good idea for the minister to appoint the NHI board is good, but suggesting an alternative means in which the board can be appointed is obviously better.

While constructive engagement with the bill is probably the most useful approach, some might well be sceptical about how much interest there really is from government’s side in such engagement. On the one hand government has, through the Presidential Health Compact process, and other means gone out of its way to get different organisations to publicly declare their support for NHI. On the other, government ignored most comments made on the 2018 version of the bill.

Fairly, or unfairly, there is a perception that if you want to be in the inner circle, you need to support NHI uncritically and not rock the boat. That is not a good starting point for building something as ambitious and far reaching as NHI. The ethos of “you are either with us or against us” has already destroyed our public service and likely contributed to the culture of not rocking the boat that was so central to the capture of the state at various levels.

Making the road to NHI more inclusive

If government wishes to build a stronger public consensus on NHI it urgently needs to start communicating in a more inclusive and less defensive manner about NHI and the very real challenges of implementing it in our current context. It should show in its actions that implementing NHI is really about making people’s lives better, and not just about politics. It should show that people’s concerns are taken seriously.

For example, it is natural that people who can currently afford medical scheme cover are concerned about their own and their family’s futures under NHI. Yet, in the first few days after the bill was introduced into parliament there was hardly any acknowledgement of these concerns. If the minister is sure that middle-class people will have the same quality of care under NHI as they have now, he should say so and be willing to explain why he is sure of it. If he is not sure, he should explain why a decrease in quality for some is justifiable. By not spelling things out, and by not taking reasonable concerns seriously, government is seeding valuable bandwidth to the naysayers who stand ready to fill the gaps with people’s worst fears.

And yet, despite a flawed bill and a worryingly defensive and populist attitude from government, a workable and relatively successful NHI, though politically extremely difficult, is nevertheless still possible. It is both possible and difficult in the same way that it is possible and difficult that President Cyril Ramaphosa’s “new dawn” will generally succeed in rebuilding state capacity and that the key architects of state capture will be convicted. Both a successful NHI and the building of a more capable state requires a major course correction and a reckoning with our recent past, that despite the important work of the Zondo commission of inquiry into state capture, we have not yet had.

We probably have enough qualified and committed people in South Africa to implement a reasonably effective NHI that is also more decentralised than what is envisaged in the current bill. The problem is that for the last two decades many of these people have been driven out of the public healthcare system and the public service. One challenge that government is clearly underestimating, is how difficult it will be to bring more good people back into the system and to get rid of people who are corrupt or appointed for political reasons rather than their ability to effectively serve the public.

We most likely also have the money to implement a reasonably functional and effective NHI. Here too, however, the big but is the distrust people have in the state’s ability to spend money effectively. Whether government has the stomach for the fights they will have to fight to win back the public’s trust is still in doubt.

Either way, there is a very long way still to go. A good start, however, would be if government could snap out of its defensive mindset and start taking people’s fears and concerns about NHI more seriously.

Low is the editor of Spotlight.

Spotlight on NHI: What has actually changed in the new Bill?

By Sasha Stevenson

National Health Insurance (NHI) has been long in the making. A new iteration of the policy has been released every few years for the past eight years, culminating in the NHI Bill tabled in Parliament two weeks ago. The detail of this legislation is important. NHI will not deliver universal health coverage because we want it to. We have to design it so that it does. That is where law- and policy-making come in.

While it is beyond the scope of a short article to traverse the full history of the law making process, we consider here what has changed between the 2018 draft Bill and the version released in August 2019, to see how, if at all, thinking and planning for NHI is developing.

The short answer is: not as much as we hoped.

Despite what was reported to be hundreds of submissions on the Bill, the 2019 Bill largely maintains the approach of the 2018 draft Bill. Indeed, of SECTION27’s detailed submissions, only one concern (the deletion of section 4 of the National Health Act that guarantees free health services at public health establishments) has been remedied. This is a worry given the nature of the concerns that we, and no doubt others, raised, in the interest of securing a health system that really does serve all in South Africa.

The most notable change in the new Bill is in relation to the Minister’s powers. As SECTION27 we raised the alarm about an over-centralised and unaccountable NHI Fund structure in the 2018 Bill.

The governance structure of the NHI Fund is vitally important given that it will be responsible for huge sums of money and big and important decisions. A governance structure should be designed so as to ensure transparency and to provide for checks and balances. Designing the structure in this way is not about distrust of specific individuals involved, but rather about ensuring best practice and good governance. Governing structures cannot be designed in the mere hope that all actors will be benevolent and act in the best interests of the country.

The 2019 Bill centralises the Fund even further than the 2018 Bill. Its governance hangs largely on the Minister of Health. The word “independent” is removed from the description of the Board of the Fund and it is rendered accountable to the Minister, rather than to Parliament. It is appointed by the Minister rather than by Parliament. The Minister, rather than Cabinet, appoints an ad hoc panel to conduct interviews and recommend candidates to the Minister for appointment. The Minister may remove members of the Board or dissolve the Board. The Minister, rather than the Board itself, also now appoints the Board chairperson.

This further concentration of power is a grave error.

Population coverage is another component of the Bill that has seen a change. There has been some improvement in population coverage between the 2018 and 2019 Bills in that refugees are now entitled to the same coverage as South African nationals and all children are entitled to an undefined set of “basic health care services”. However, in the 2019 Bill, asylum seekers and undocumented migrants are entitled only to pre-hospital emergency medical services and services for notifiable conditions of public health concern (conditions such as Ebola, cholera, tuberculosis, etc). This removes the current and 2018 Bill entitlement to maternal health care services, contrary to South Africa’s commitment to reducing maternal deaths, and removes the right of asylum seekers and undocumented people to receive treatment for HIV and other communicable diseases, a clear public health threat.

In addition, in providing only for pre-hospital emergency medical services, it places people in the invidious position of receiving care in an ambulance but not covering emergency medical treatment and stabilisation in a health facility. Are ambulances to take accident victims or those experiencing a heart attack but not covered by the NHI Fund due to their immigration status home to die?

While the 2018 version of the Bill, published shortly after the exposure of the Life Esidimeni disaster, included the prioritisation of services for people with mental illness, this prioritisation has been removed in the 2019 version. It seems that the political moment for mental health has passed.

The role of provinces, long a mystery in the NHI development process, remains concerningly unclear in the 2019 Bill. The Bill spells out for the first time that the provincial equitable share (the funding that pays for almost all services in the public sector), will be shifted to the Fund. Despite the loss of funding, the provinces are meant to be “managing agents” of service delivery. It is still however unclear how they will accomplish such a task, and how they will relate to District Health Management Offices, to be established as “national government components” albeit at district level, to coordinate services in each district; or to Contracting Units for Primary Care which are meant to operate at sub-district level and receive money directly from the NHI Fund to pay health service providers.

The governance and accountability structures of the district and sub-district level structures are not provided for, and neither is the division of funds to pay for what appears to be a multi-layered bureaucracy.

Finally, another structure – the Office for Health Products Procurement – is newly introduced in the 2019 Bill. This office will be responsible for “setting the parameters for the public procurement of health related products”, including medicines, medical devices and equipment. It appears that any health facility providing services under NHI (whether public or private) must purchase health related products from a Formulary established by the Office for Health Products Procurement, which provides for both the product in question and the approved suppliers of that product. All health procurement then will be determined by the Office for Health Products Procurement.

While effectively managing procurement could well lead to price savings (as medicine tenders in the public sector have done), more information on the Office and of its governance and operations is needed to ensure that it does not further the enormous opportunities for corruption in health procurement.

The detail of this Bill matters. I have been told that it is only lawyers who care about the legislation, everyone else just wants to focus on the vision of NHI. The problem is that the vision, if it is not built into the defining systems and structures, is no more than a mirage. We have to do justice to this vision of universal health coverage, and doing so requires going beyond rousing speeches and unconditional support. It requires engaging with the details and ensuring that the new funding system we develop is capable of furthering health for all.


  • Stevenson is the head of the health rights programme at SECTION27.