The concept of Universal Health Coverage (UHC) is a noble initiative and receives widespread support in South Africa. The World Health Organization (WHO) defines UHC as “Ensuring that all people have access to needed promotive, preventive, curative and rehabilitative health services, of sufficient quality to be effective, while also ensuring that people do not suffer financial hardship when paying for these services”. The WHO principles of affordable access to quality healthcare is an absolute imperative in the South African context. The South African Constitutional principle of access to healthcare is also without question. The debate in South Africa, is whether NHI in its current form will lead to compliance with the constitution and with the WHO sustainable development goals.
Despite what the Minister of Health indicates, NHI is not a worldwide phenomenon. Universal Health Coverage is an international goal, with every country taking a different approach to achieving this objective. What is being questioned is the proposed NHI as vehicle to achieve UHC in South Africa. The WHO categorically states, “UHC does not mean free coverage for all possible health interventions, regardless of the cost, as no country can provide all services free of charge on a sustainable basis”. There is a distinct lack of answers coming from the Minister on some of the most pressing concerns within the NHI model.
The Minister proposes that “People follow money. They follow resources. And because money is in the private sector, skilled people tend to go mainly to that sector”. Between 2002 and 2010, there were 11,700 medical school graduates, while the government created only 4,403 posts in the public sector. If the private sector did not retain these doctors, they would have either joined the masses of unemployed in South Africa or left the country.
The Minister has also suggested that “the private sector is heavily subsidised by the state to the tune of R46.7bn, according to 2015 figures”. It is, however, important to remember that the origin of all money spent by the state is from the tax base. If these subsidies and tax credits are removed, would the public healthcare sector be able to cope with the additional 5 million South Africans dumped in the public sector when unable to afford private medical cover? A tax credit, also, cannot be considered a subsidy as it is simply a rebate of an individual’s own tax money and they are not burdening the state healthcare system.
The further question is whether R27bn in medical subsidies granted to government employees spent by the Department of Public Service and Administration would end up in the health budget. Trade unions are unlikely to favour a reduction of their members’ cost to company packages and would demand that money in cash. This would perversely increase inequality in the healthcare sector as less government employees would be covered by private medical scheme arrangements. It would also increase the burden on government healthcare facilities, without a concomitant increase in funding. Rational thinking explains why the withdrawal of the government subsidy to government employees is not in the interests of the healthcare system or the affected individuals.
The Minister states that “Time and again, when we want to include the poor to share in the country’s wealth, we are told how expensive it is”. Currently, the poor already have access to “free” healthcare in South Africa and yet they are still poor. The Minister also conflates private money spent privately on healthcare with taxpayer provided money intended to assist the poor. A wealthier population is a healthier population and, in order to grow and expand the economy, South Africa must address the chronic unemployment situation where over 6.2 million adults (27.7%) have been relegated to lives of destitution because they do not have any work.
If the government focuses on forming an employable population by improving education, the improved living standards of the newly employed will contribute more to health than healthcare spend ever will. In the NHI scenario, with mandatory medical scheme membership for the employed being part of the Minister’s interim plan, more people will leave the public healthcare sector, reducing the burden on the state and so improving the quality.
The quality aspect could be addressed by the proper management of public hospitals, additional funding is not a requisite – simply pouring more money into the system will not solve the underlying structural problems. This step alone would almost negate the need for the rest of the NHI plan as it will reduce costs in the private sector and improve quality in the public sector so everyone has access to affordable quality healthcare. If you are indigent, affordable would mean “free”, while there will be a reasonable price attached to healthcare for the more affluent.
Dr Johann Serfontein is a Member of the Free Market Foundation Health Policy Unit. The FMF is an independent, non-profit, public benefit organisation, created in 1975 by pro-free market business and civil society national bodies to work for a non-racial, free and prosperous South Africa. As a policy organisation it promotes sound economic policies and the principles of good law.