NHI: What's cost got to do with it?

03 March 2019 - 00:08 By PENELOPE MASHEGO and ASHA SPECKMAN

SA's pursuit of universal health care in much the same vein as that in the UK still remains as shrouded with uncertainty as it was when it began some seven years ago.
The government has planned for National Health Insurance (NHI) to be in place by 2026, but the central question of how it will be funded remains unanswered.
The UK introduced its scheme at the end of World War 2, more than 70 years ago.
The idea behind NHI is that health care will be accessible to all South Africans at nearby facilities that will be staffed by private-sector contractors providing services to the public sector.
Treasury insiders who spoke to Business Times on condition of anonymity said taxpayers might face a 1% hike in income tax to pay for NHI.
They complained that planning for the scheme, in a country where less than 20% of the population has private health care, has been inadequate.
Minister of health Aaron Motsoaledi says it is impossible to cost the scheme at this stage.
"Many people are panicking because they believe the NHI is going to cost an arm and a leg . and because their calculation is based on one wrong assumption," he said in an interview.
"The assumption that the present cost of private health care, which covers 16% of the population, is going to be extrapolated mathematically onto 100% of the population.
"It becomes an astronomical figure and obviously it makes people jittery."
We would rather not know
He said groups such as the World Health Organisation had cautioned SA against trying to establish the likely cost, pointing out that it is not common practice internationally to do so. Motsoaledi says Ireland's universal health insurance scheme was scrapped in 2015 partly because the government there did a cost estimate.
The Irish government did not initially cost the plan but when it did, using research from the country's Economic and Social Research Institute, it found that it would never be able to afford it.
"What we said it will cost is what we want to implement at some point in time, programmatically," the minister said.
"When we implement a particular programme of the NHI, we will cost it. I'm not saying that there is going to be no costing, but I'm saying costing the whole programme of NHI for the whole population over a lifetime period, you can't do."
Motsoaledi, who has had testy relations with SA's private medical industry in the past, said the industry did not like the implications of NHI and would try to blame him for anything that went wrong.
According to the NHI white paper, spending on the scheme will total R256bn in 2025/2026 based on 2010 prices, if the economy grows at an annual rate of 3.5%.
This would result in a possible funding shortfall of R72bn by 2025.
But Motsoaledi said this projection is now off the table following subsequent advice received from the WHO and others.
Another burning question about NHI relates to the role of the private sector; whether it will supplement the state provision of care, or if people will be able to opt out of NHI and rely purely on private health care.
Also, if medical schemes provide only top-up cover, then the cost of delivering the NHI will be much higher because the risk pool will be bigger.
Political 'vanity project'
Alex van den Heever, a professor at the Wits University School of Governance, says the NHI is unimplementable.
He describes it as a "political vanity project", because SA is not in a position to finance it.
"[Motsoaledi] has had 10 years to produce some semblance of a feasibility study," Van den Heever said.
"He has instead produced nothing - no evidence of what the institutional reforms will do and nothing about whether anything will work better than what exists today.
"I feel this is a gross dereliction of responsibility. You cannot propose grandiose schemes, try to sneak them into implementation, and still have no real idea of what you're supposed to do."
Since he took up his position at the helm of one of SA's most critical departments in 2009, Motsoaledi seems to have fractured what there was of the relationship between the private and public sectors.
His battles, however, are not limited to this. Last year, the NHI Bill, which is meant to lead to the establishment of a dedicated fund through which the state will purchase services, was reportedly sent back by the cabinet to be worked on further.
At the heart of the issues around the bill was the introduction of President Cyril Ramaphosa's NHI war room last year, which opened the door for former department of health DG Olive Shisana to make a comeback.
Relations not so healthy
Motsoaledi is said to not have got along with Shisana and is also believed to have a rocky relationship with current DG Precious Matsoso, who has reportedly complained about being sidelined in the drafting of revisions to the NHI.
The minister denied these allegations, saying it was news to him that he didn't get along with Shisana.
Motsoaledi said the department had responsibilities besides the NHI that Matsoso had to deal with, which meant she could not be part of the war room.
Shisana said she had no conflict with the minister and that they worked very well together.
Matsoso could not be reached for comment.

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