Plea for private healthcare

No country stops the private sector funding and purchasing health services, say Business for SA (B4SA) and Business Unity SA (Busa) in their submission on National Health Insurance (NHI).

In the submission to the select committee on health & social services of the National Council of Provinces (NCOP) they ask for medical aids to be permitted and for the NHI bill to be changed to allow the private and public sectors to work together to improve healthcare.

Section 33 of the bill says that once the NHI is fully implemented medical schemes may provide only complementary cover for services not covered by the fund. A single fund is to purchase all healthcare, pooling all private and public spending.

“We are deeply concerned that the current process and version of the NHI bill, with its attendant constitutional risks, is likely to widen health inequality rather than reduce it,” said Busa CEO Cas Coovadia. “However, we believe that with small but critical changes to the bill which allow both the public and the private sector to work together, as we did during the Covid-19 pandemic, a sustainable and affordable NHI is possible.”

The comments come as speakers at the annual conference of Hospital Association of SA in Cape Town address the NHI single-payer model’s shortcomings.

Healthcare actuary Roseanne Harris, who guided the Busa and B4SA response to the bill, said there are pitfalls in having only one purchaser of healthcare.

“The primary risk of a single fund model is that it is entirely dependent on taxpayers. So if the expenses exceed the revenue, then that fund is going to need to be bailed out.”

Having a single purchaser means the government sets the price for all doctors, health workers and hospital services, resulting in a “single dominant purchaser dictating the terms”.

“That’s an extremely aggressive approach that’s causing a lot of anxiety among healthcare professionals and, of course, among those who need to invest in our healthcare market,” said Harris.

Simon Strachan, CEO of the Private Practitioners Forum, representing specialist doctors, said at the conference that remuneration for healthcare has to be “acceptable to people who are providing that service”.

FTI Consulting analysis for Busa and B4SA on how to finance the NHI showed that to fund a R200bn yearly shortfall the government would have to raise VAT from 15% to 21% or personal tax by about a third, or there would have to be a payroll tax of more than R1,500 for every employed person outside the agricultural sector.

FTI economist Nicola Theron, who did the analysis, said that a huge tax increase while SA’s tax base declines is not viable.

Coovadia said: “SA’s healthcare system has much to gain if we get this right. It is essential that we do.”