Why SA needs an NHI - ANC

The ruling party says there is an urgent need to introduce the new system

A Unified, Equitable and Integrated National Health System that benefits all South Africans

The National Health Insurance (NHI) has recently re-occupied the centre stage of discussions. These discussions have intensified from the time the ANC announced in its 2009 Election Manifesto that the NHI would be one of the key priorities of the coming five years. President Jacob Zuma in his State of the Nation Address confirmed that the NHI is one of the key programs of government.


The broad objective of the NHI is to put into place the necessary funding and health service delivery mechanisms, which will enable the creation of an efficient, equitable and sustainable health system in South Africa. It will be based on the principles of the right to health, social solidarity and universal coverage.


NHI will be funded through a combination of current sources of government health spending, including the removal of tax subsidy for medical schemes and a modest mandatory or compulsory contribution by employer-employee contribution which will be split equally.

Contribution will be less than what members and their employers currently pay to medical schemes. Certain categories of workers, due to their low-income status, will be exempted from the contribution. All these funds would be placed in a single pool that would be available to fund all health care in the public and private health sector under conditions that would apply to all health care service providers.


It is important to understand that debates about universal coverage are neither new nor unique to South Africa. It is also important to realise that the desire to improve the health status of nations, including that of South Africans, is at the heart of this debate.

Internationally, more than thirty countries had already implemented some form of compulsory national health insurance scheme before the start of the First World War. These schemes were aimed mainly at pooling resources to provide forms of social security for the bulk of the citizenry. These forms of social security included the provision of health care for all citizens.

In South Africa, debates about universal coverage can be traced back to more than seventy years ago, when in 1941 a national health insurance plan for South Africa was published in the South African Medical Journal by J Collie, the Chairperson of the Committee of Enquiry into the National Health Insurance. This plan proposed a health insurance scheme that would cover people of all races except those who lived in rural areas. This plan was never implemented because of resistance from various quarters.

Another Commission headed by the former Minister of Health, Dr Gluckman, which made recommendations on a national health service, followed it. Its recommendations also never saw the light of day.


The current proposals on the NHI originate from the ANC policy debates and plans. Plans that were drawn to transform apartheid health into a democratic dispensation. Whilst we have successfully created a non-racial public health administration, the public health sector suffered serious problems of funding and staffing.

  • In the last decade public funding declined leading to serious under-staffing of the public health sectors, with many important staff positions remaining vacant.
  • In many areas access has increased but quality has deteriorated. The country is faced with a heavier burden of disease, shortage of human resources, poor management of health institutions, poor financial management and inadequate funding, and deteriorating infrastructure.
  • Furthermore, while many of our public hospitals have been refurbished and management improved, there are also many public hospitals which experience management failure related to employment of incompetent managers.
  • Another challenge facing the public health sector is the shortage of drugs at health facilities especially HIV/AIDS drugs and the ability of the state to access medicines at lower prices.

Despite the effort of government to regulate the private health sector, experts agree that the sector is riddled with inefficiencies, excessive administrative expenses and inflated prices.

These problems lead to the following:

  • The private health sector has to deal with cost escalations mainly from over servicing of patients and non-health related expenditures such as administration fees, managed care fees and brokerage fees.
  • Membership of medical schemes has become increasingly unaffordable for South Africans. Premiums or contributions cost medical aid members between R12, 000 to R80, 000 per year and has continued to increase at annual rates far exceeding the inflation rate or wage increases since the 1980s.
  • The high cost of medical schemes and affordability has meant the total number of beneficiaries has decreased since 1994, from twenty percent of the population to fifteen percent or about 7-million people. In the current economic crisis, as many jobs are lost, there will fewer people with medical aid.
  • Medical scheme members experience exhaustion of the medical aid benefits, especially medicines, and have to pay out of their pockets for medical expenses. This affects medical schemes' usefulness in accessing or paying for needed health services.

Faced with all these challenges, plans were drawn and presented to the electorate at the last national and provincial elections. This government received an overwhelming mandate at these elections. In order to give effect to that mandate, the health sector Program of Action is being implemented.

This Program of Action is based on the following ten key priorities, which are solutions to challenges that have been identified:

  1. Provision of Strategic Leadership and creation of a Social Compact for better health outcomes.
  2. Implementation of the National Health Insurance (NHI).
  3. Improving of the Quality of Health Services.
  4. Overhauling the health care system and improve its management.
  5. Improved Human Resources Planning, Development and Management.
  6. Revitalization of Infrastructure.
  7. Accelerated implementation of the HIV & AIDS and Sexually Transmitted Infection National Strategic Plan (NSP) 2007-11 and an increased focus on TB and other communicable diseases.
  8. Mass mobilization for better health for the population.
  9. Review of Drug Policy.
  10. Strengthen Research and Development.

These are the priorities that the public should hold the Health Ministry and Department of Health accountable for in the coming five years.

One of the main concerns that have been raised by various commentators on the NHI is the future role of the private sector. We have stated clearly in past engagements and various forums that the policy of government and the ANC is that the private sector is an important role-player in the delivery of health care.


The National Health Insurance will:

  • Create a publicly administered and publicly funded National Health Insurance Fund (NHIF). The NHIF will be a single-payer fund that receives funds, pool resources and purchase services on behalf of the entire population.
  • Expand health coverage to all South Africans. This means there will be no financial barrier to access health care. All South Africans will be equally covered to access comprehensive and quality health care. Health services covered by NHI will be a free at the point use - no upfront payment will be required by the doctor or hospital.
  • Provide comprehensive coverage of health services. South Africans will be entitled to a comprehensive range of health benefits, including primary care, inpatient and outpatient care, dental, prescription drugs and supplies. The services will be provided on a uniform basis at all health facilities.
  • Publicly and privately delivered health care. NHI will be simply a financing system, with government collecting and allocating money for health care. Health care is provided by private and public sectors but paid for publicly by NHIF. To ensure improvement in quality standards, all providers will be accredited before NHI funds them.
  • Social Solidarity: Services delivered based on need rather than on ability to pay. In this case, coverage by NHI will not be interrupted and will be equal to everyone, thus ending the dependency of health on access upon employment status. Social solidarity also means those who can afford to pay for health care will subsidise those who cannot afford to pay.
  • Save enough on excessive administrative costs that characterize the current multi-payer medical scheme system, thus requiring no increase in total health care spending as a percentage of GDP.
  • Control costs through cost-effective payment methods through negotiated capitation methods for doctors, global budgeting for hospitals and bulk purchasing of drugs and supplies.


Current consensus is that the NHI be implemented in a phased manner to allow for consultation, policy making and legislation review. Before implementation the ANC government will consult with all sectors affected especially the workers, employers, health providers and suppliers and health funders.

The case for change in health care financing in South Africa is strong. The introduction of mandatory National Health Insurance is urgent. This is more so as we move towards the deadline for the achievement of the Millennium Development Goals for health.

The implementation of the NHI will require that we develop partnerships to ensure accelerated transformation of the National Health System. Parallel efforts to improve health services and introduce efficiencies will focus, amongst others, on the improvement of human resources for health and physical infrastructure, effective and efficient management especially financial, the establishment of effective Information and Communication Technology for health, and special focus on Quality of Care, norms and standards.

Once the White Paper process has started, we urge ANC members and the public to study government proposal on the NHI, engage in debates and contribute resources, skills and expertise to the final product that will emerge after consultations.

We dare not fail to bring about a better and integrated national health system that benefits all South Africans.

Working together we can do more.

This article first appeared in ANC Today, the weekly online newsletter of the African National Congress, July 24 2009

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