The coming NHI nightmare

Reiner Duvenage says the end result will be disastrous collapse of entire healthcare system

The nightmare of National Health Insurance

22 February 2022

The planned implementation of the National Health Insurance (NHI) Bill is the ANC government’s latest power-hungry attempt to monopolise and centralise its grip on South Africa. The government is window-dressing NHI as a panacea for the poorest of South Africans’ lack of access to quality healthcare. However, the end result of its actions will lead to the disastrous collapse of the entire healthcare system and will have severe consequences for all South Africans.

When studying NHI from a critical perspective, one must wonder how the management (or rather mismanagement) of this centralised fund will differ from that of other state-owned enterprises (SOEs).

Both the Auditor-General and Zondo Commission’s recent findings have been damning in their exposure of mismanagement, state capture, corruption, and inefficiency at prominent SOEs such as SAA, Transnet, and Eskom. Yet, NHI will be managed on a larger scale, leaving the door open for even greater failures and financial losses.

The government has demonstrated a clear lack of will to end systemic corruption in all governmental sectors. It is impossible to calculate how much money has been lost to corruption since the ANC came to power, but recent estimates suggest that R1,5 trillion was lost between 2014 and 2019 alone.

The ANC government has also shown a shocking brazenness to steal money from the most desperate people in society. This was seen in Medical Brief’s investigation of looting of the Covid-19 relief fund, which investigated 10% of the R152,5 billion, and found that one out of every two Rands spent had been stolen and 62% of contracts had been awarded irregularly.

In addition to this, the current public healthcare sector is in tatters due to the government’s failure to maintain facilities and infrastructure. The scale of failure is demonstrated by the Western Cape Department of Health being the only provincial health department to receive a clean audit in 2019/2020.

With the ANC’s track record of managing current infrastructure, there is simply no way that it will be able to manage a larger scale national health system. With this considered, the NHI amounts to nothing but irresponsible gambling with the health sector, and therefore, with the lives of millions of South Africans.

Yet, the above argument is rendered purely academic when one considers that NHI is simply unaffordable. Discovery Health estimated that 44% (R212 billion) of total healthcare funding was being spent in the private sector.

Thus, if private medical aids are to be eliminated as the NHI Bill stipulates, this shortfall will have to be absorbed by the state. The country’s atrocious economic situation and astronomical debt levels, amplified by mismanagement of the Covid-19 pandemic, disqualifies it from funding NHI via loans. This leaves the raising of taxes as the only funding option for NHI.

South Africa is already taxed higher than other countries in its GDP bracket – it is estimated that 25% of taxpayers pay 80% of income tax. On top of this, government failure has forced South Africans to pay double taxes for many essential privatised services such as schools, security and of course healthcare. Therefore, the raising of taxes to fund NHI would be the final straw that breaks the already over-burdened taxpayer’s back.

As briefly mentioned above, the implementation of NHI’s will mean the end of the private medical sector on which the state is heavily reliant in catering for the healthcare needs of all South Africans. This means government would be depriving citizens of pre-existing quality coverage in favour of a system which is unaffordable, unfeasible, and unworkable.

It is tragic that the ANC government has allowed the public health sector to deteriorate to such an extent that many poor South Africans do not have access to quality health services. However, this problem will not be solved by destroying the private health sector which already over-burdened taxpayers are funding out of their own pocket.

Against this rather bleak background, many skilled South African professionals are already emigrating in search of better value for their taxes and personal safety abroad. However, implementation of NHI will bring about an unprecedented exodus of medical professionals.

In June 2021, the South African Medical Association warned that as many as 38% of its 12 000 members planned to emigrate if NHI were to be implemented. In addition to this, a further 6% planned to emigrate for other reasons and a further 17% said they were unsure about leaving the country if NHI were to be implemented. In the face of already crippling staff shortages, the mass emigration of healthcare professionals is something South Africa cannot afford.

In summary, NHI is a project for which the true costs and service needs are completely unknown, but despite this, is still being foisted on the already over-burdened taxpayer. When considering the track record of state-owned monopoly enterprises, NHI will be severely burdened by corruption, excessive bureaucracy, mismanagement, and inefficiency.

The government is using NHI as a way of garnering votes from poor South Africans, who have legitimate grievances regarding the quality of healthcare in South Africa. However, NHI will not solve these problems. On the contrary, it will lessen the overall access to quality healthcare by destroying the private healthcare sector.

This will also be accompanied by the mass emigration of medical practitioners and specialists. The government is reliant on the private healthcare sector and the disappearance of its financiers and personnel will bring about a collapse of the entire health system. Unfortunately, it is the poor people of South Africa that will suffer the most as a result of this.

Reiner Duvenage is a Campaign Officer for AfriForum.