Navigating the complex question of NHI vs medical aid schemes

There has been a huge outcry and threats of litigation in response to the signing of the National Health Insurance (NHI) Bill in May. One of the central issues is the future role of medical schemes and private health care once NHI is fully implemented, given that the act states that medical schemes will not be able to provide cover for services that are paid for by the NHI.

Busi Mavuso, CEO of Business Leadership SA (BLSA), accused government of rushing populist policy through parliament as part of an “electioneering ploy” in a move that is “destructive for many stakeholders and relationships at a time when partnerships between government and business are critical to building confidence globally that South Africa is an investable destination.”

Mavuso echoed the opinion of many in the public sector that “the law will never work, simply because there is no capacity to implement it, and as soon it is signed, it will be embroiled in litigation on several fronts, including its constitutionality.”

Cas Coovadia, CEO of Business Unity South Africa (Busa), was similarly scathing, saying that the legislation in its current form is “unworkable, unaffordable and not in line with the constitution.”

Especially troubling, he said, was the president proceeded despite extensive constructive inputs made by a wide range of stakeholders, including doctors, health care professionals, civil society, public sector unions, academics and business. “The unfortunate consequence is that this version will hamper, rather than promote, access to quality health care for all citizens in our country,” said Coovadia.

The public health care system has, in theory, always offered free or at least heavily subsidised health care. However, the health ombud has previously told parliament that most hospitals will not meet the standards required by the NHI.

Discovery, the largest open medical scheme currently, says that limiting the role of medical schemes would be counter-productive to the NHI, because there is currently insufficient resources to meet the needs of all South Africans, and that preventing those who can afford it from using their medical scheme cover and forcing them onto the NHI system will increase the burden on public funding – which taxpayers need to cover.

Medical schemes have been quick to reassure members that it is business as usual – for now. Discovery CEO Adrian Gore told members that it will take a decade at least to achieve full implementation, given the scale and complexity of the reforms required.

Lee Callakoppen, principal officer of Bonitas Medical Fund, the second-largest open medical aid scheme in South Africa, agrees, pointing out that the Act is a complex piece of legislation that could take years to be clarified. His advice to private health care members is to retain their medical aid membership.

“The biggest concerns surrounding the Act”, says Callakoppen, “are around funding, administration and continued freedom of choice as set out in the Bill of Rights.

“Detail is lacking in terms of how NHI will be funded. The most likely option is additional taxes. However, until the NHI implementation plan is finalised, it’s difficult to know what the actual costs will be. A fact which needs to be taken into account is that taxpayers, including private medical scheme members, already fund 75% of the public health budget,” he says. The administration of the proposed central system of health care, on the other hand, will need rigorous governance. Existing medical aids are strictly regulated. “NHI too, would be a not-for-profit organisation owned by its members. Private medical schemes are under strict scrutiny and undergo public audits as they are obligated to the members of the medical aid, which is, in essence, a trust fund,” says Callakoppen.

He explains that international concepts of universal health care make provision for freedom of choice. “We believe citizens should be open to purchasing health care should they have the means to.”

According to the white paper, NHI will be rolled out in priority areas first – these include health care at schools, childhood cancer, women’s health (including pregnancy, cervical cancer and breast cancer), disability and rehabilitation services as well as hip, knee and cataract surgery for the elderly.

“But what about the remainder of the population?” says Callakoppen. “Medical schemes offer a number of benefits that are immediately available to members. This allows them to access the care they need when they need it. If the NHI is to be rolled out to specific target groups first, what becomes of others in need? That’s why we believe public and private health care can and should co-exist.”

He argues that medical schemes need to be able to work in tandem with the NHI, so that duplication of costs is prevented.

“Universal healthcare is in everybody’s best interest. We need to focus on public and private enterprise working together, strong leadership, accountability and dealing with social-economic issues as an integral part of the process.”