Will Government's Approach To The Adoption Of The NHI Do More Harm Than Good?

Author:Mr Vaughn Harrison and Mandi Krebs
Profession:Hogan Lovells
 
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The Minister of Health, Dr Aaron Motsoaledi (Minister), has been entrusted with the unenviable task of overseeing South Africa's transition to universal health coverage through the implementation of a National Health Insurance scheme (NHI).

The NHI represents a paradigm shift in respect of the funding of healthcare and the manner in which healthcare will be procured in South Africa in future. A "single-payer" and "singlepurchaser" fund, for the entire population, is envisaged.

On 30 June 2017, the Minister released a government report (Report) on the NHI, and in terms of which the government re-affirmed its intention to formulate a comprehensive legislative framework for the successful implementation of the NHI.

Many have commented that government has set an almost impossible timeline for the development and implementation of the required NHI legislation, which it proposes formulating by 2022.

Notwithstanding the information and proposals that are included in the Report, many questions remain unanswered, and there is uncertainty regarding matters such as funding, legislative reform and the future of private healthcare.

Funding of the NHI

Funding in respect of the NHI remains a major point of contention.

To date, the government has not provided any concrete indication regarding the projected costs of the NHI, nor the manner in which it will be funded.

The current projected cost of some ZAR256 billion, by 2025, has drawn widespread criticism, as the cost projection is based on questionable and outdated assumptions that have not been updated since the release of the preliminary report by government in December 2015.

Government deflected the question in respect of NHI costing in the Report, by simply stating that focus should not be placed on funding, and that the focus should instead be redirected to the different scenarios for the design and implementation of reforms, so as to move towards universal health coverage.

According to the Report, the funding requirements will be determined, discussed and announced during the annual budgeting process, and consideration will be given to the scope of the health services that will be covered by the NHI.

Notwithstanding the limited feedback provided by the government regarding questions of funding, the current proposals include funding by means of payroll taxes, surcharges on taxable income and/or increases in VAT. Some of the more controversial proposals are the scrapping of medical scheme contribution...

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