Dismay at draft rules for NHI Fund

• Stakeholders say their concerns have not been addressed

Health minister Aaron Motsoaledi’s publication of the first draft regulations for the National Health Insurance (NHI) Act has drawn swift condemnation from stakeholders dismayed that their concerns have not been addressed.

The legislation aims to set in motion the ANC’s plan for universal health coverage, in which a government-controlled NHI Fund will be the sole purchaser of healthcare services for eligible patients. The act faces four independent legal challenges, while Business Unity SA (Busa) has sought changes to the legislation in a proposal submitted to President Cyril Ramaphosa last year.

Motsoaledi has nevertheless flighted draft regulations to section 55 (x), (z) and (zA) of the act, setting out the proposed governance structure and processes of the NHI Fund.

The act was signed into law by President Cyril Ramaphosa on the eve of last year’s May general election, but has yet to be brought into effect.

The proposed regulations specify that all key appointments will be overseen by the minister of health. This approach was flagged as a governance risk by numerous stakeholders when the NHI bill was considered by parliament. They argued the single NHI Fund must be independent of the executive to shield it from political interference.

While Ramaphosa promised to take stakeholders’ concerns into account when he signed the act, he appears again to have ignored these.

“These regulations take us one step closer to a single, centralised fund that carries gigantic risks for governance, and for our health and wellbeing,” said Western Cape health and wellness MEC Mireille Wenger.

“At the same time, the actual costs of the NHI and a number of critical areas surrounding the functioning of the fund have not been revealed,” Wenger said.

“While the NHI seeks to centralise power, we believe that better and more accessible healthcare can instead be achieved through harnessing the strengths of both the public and private healthcare sectors, supported by academic expertise. A rigid, one-size-fits-all system risks undermining already functional healthcare structures.”

The Board of Healthcare Funders (BHF), a medical scheme industry association, said: “Following his signing of the bill into law, President Ramaphosa committed to engaging with stakeholders on their concerns regarding the legislation. However, it appears the president and minister Motsoaledi have continued to ignore all well-reasoned arguments that have been made by various groups, including [ours], on why the NHI Act is unconstitutional,” the BHF said.

Busa challenged the authority of the minister to issue regulations before the act had been brought into effect. “According to our knowledge, the NHI Act is not effective because it has not been proclaimed by the president (and) therefore does not empower the minister to make regulations yet,” said Busa CEO

Khulekani Mathe.

Publishing regulations in isolation from an agreed on, workable NHI framework risked undermining the objective of universal health coverage, said Busa. It previously said the reforms set out in the act were unworkable and unaffordable, and posed a risk to the economy and investor confidence. “We have consistently advocated for a fiscally responsible, inclusive approach to universal health coverage that leverages both public and private healthcare resources,” Mathe said.

Health department deputy director-general for NHI Nicholas Crisp said the draft regulations had been gazetted “so that when the relevant sections of the act are promulgated the regulations are ready”. The draft regulations were published in the Government Gazette on Thursday, with a three-month public comment period.

Crisp previously told Business Day the first draft regulations were to be published by end-September. It had taken longer than expected because the National Health Council decided they must be broadly accessible to as many people as possible and it took time to secure translations into Sepedi, Afrikaans and isiZulu, he said.

The draft regulations say the minister will issue a call for nominations to the board of the NHI Fund.

The health director-general is to establish a nomination committee to draw up a shortlist of nominated candidates, which will be referred to an ad hoc committee appointed by the minister.

The ad hoc committee will recommend candidates to the minister, who will submit the names to the cabinet for approval. Once the board has been appointed it is to recruit a CEO, subject to ministerial and cabinet approval.

The CEO will then recruit candidates, subject to approval by the ad hoc committee and the minister, for a benefits advisory committee and a healthcare benefits pricing committee.

Crisp said the prices set by the interim multilateral negotiating forum for private healthcare tariffs, proposed in regulations gazetted by trade, industry & competition minister Parks Tau last month, might form a foundation for the benefits and pricing committees.

The tariff-setting forum is to be housed within the health department and will allow medical schemes and some healthcare providers to collectively negotiate prices without falling foul of the Competition Act.

Trade union Solidarity, which has also taken legal action against the act, said the government was taking an unacceptable financial risk by allocating funds to NHI.