Judge rules health legislation unconstitutional in ‘major blow to NHI idea’

24 Jul 2024

Health legislation that would require doctors and health practitioners to obtain a ‘certificate of need’ before being allowed to practise in a particular area has been declared unconstitutional by the high court. The requirement has been described as a cornerstone of the proposed National Health Insurance.

The Gauteng Division of the High Court in Pretoria on Wednesday ruled that legislation that would allow the government to determine where doctors and other health professionals could practise was unconstitutional.

The application was brought by the trade union Solidarity, the Alliance of South African Independent Practitioners Associations, the South African Private Practitioner Forum, the Hospital Association of South Africa and a group of doctors in private practice.

Solidarity’s chief executive, Dr Dirk Hermann, said, “This judgment is a major blow to the total NHI [National Health Insurance] idea, as the principle of central management is a core pillar of the NHI Act itself. A more extensive consequence of this ruling with regard to the certificate of need is that parts of the NHI Act are now probably also illegal in principle.

“The NHI in its current format cannot be implemented as the essence of the NHI is central planning — and this has now been found unconstitutional.”

While this case targeted relevant sections of the National Health Act, he said Solidarity would also fight the National Health Insurance Act in court and specifically provisions that allow for the centralisation of funds for healthcare.

CON scheme

The legal teams for the applicants argued that the sections of the National Health Act (a different piece of legislation from the National Health Insurance Act) setting out a scheme that would require healthcare practitioners to obtain a certificate of need (CON) violated several constitutional rights, including the right to human dignity; the right to freedom of movement and residence; the right to choose a trade, occupation and profession; the right not to be arbitrarily deprived of property; and the right of access to healthcare.

In his judgment, Judge Anthony Millar said the main purpose of the CON scheme was to regulate the geographical distribution of health establishments and health professionals in South Africa and their compliance with norms and standards.

However, he said, it was “readily apparent that there is no rational connection between the CON scheme and the purpose for which it was enacted. It is misguided to hold the view that the CON scheme, in implementation, by the withholding of certificates or refusal to renew certificates will have the consequence of a redistribution or the establishment of new facilities.

“Objectively, the CON scheme is not rational. There is no nexus between the scheme and its implementation and the purpose for which it was enacted.”

Millar declared five relevant sections (sections 36, 37, 38, 39 and 40) — although not currently in operation — of the National Health Act were unconstitutional. The Constitutional Court will have to confirm this order before it is enforceable.

The National Health Act has been in operation since May 2005 except for the five sections in which the “certificate of need” scheme is set out. These sections make it necessary for healthcare providers to apply for a certificate of need for the area in which they wish to practise.

Read more: Everything you ever wanted to know about the NHI but were afraid to ask

“The National Health Act was enacted to provide a framework for a structured uniform health system within the republic, taking into account the obligations imposed by the Constitution and other laws on the national, provincial and local governments with regard to health services,” said Millar.

“Additionally, its preamble also recognises, inter alia ‘the socioeconomic injustices, imbalances, and inequities of health services of the past’ and ‘the need to improve the quality of life of all citizens and to free the potential of each person’.”

He said the preamble to this law made provision for the unification of “the various elements of the national health system in a common goal to actively promote and improve the national health system in South Africa.

“The provisions of the CON scheme are not concerned with the maintenance of professional standards of practitioners or with the standards to which health facilities are to be constructed or operated. The CON scheme is not aimed at regulating how services are rendered but rather the place where they are to be rendered.

“Besides applying to all new entrants to the market in a particular area, the CON scheme places a time limit on any certificate that may be granted, a period of up to 20 years. After 20 years, an application for renewal must be submitted.

“Through the issuing of certificates of need, the number of both healthcare practitioners and facilities such as hospitals or private medical practices which are permitted by law to operate within a particular area can be limited.

“The scheme criminalises the provision of healthcare services in a particular area or the operation of a facility if a certificate of need has not been issued.”

ConCourt judgment

A challenge in 2014 set aside a proclamation that brought the five CON sections into operation.

At the time, the Constitutional Court wrote in its judgment: “The purpose of the President’s power to bring portions of the National Health Act into operation is to achieve an orderly and expeditious implementation of a national regulatory scheme for health services.

“Clearly, the decision to issue the proclamation before there was any mechanism in place to address applications for certificates of need, thereby rendering the provision of health services a criminal offence, was not rationally connected to this purpose (or any other governmental objective).”

Millar said while the CON scheme did not purport to regulate healthcare workers and practitioners insofar as the rendering of their services was concerned, it did present a barrier to entry as well as being able to continue with the provision of those services.

“The scheme is silent on the extant rights of both the owners of private health establishments, private healthcare service providers and private healthcare workers. Such extant rights include their integration and professional reputations in the communities which they presently serve together with the significant financial investments and commitments made by them to be able to render the services that they do.”

Read more: Why the ConCourt is not the appropriate body to address challenges to the NHI Act

Legal teams for President Cyril Ramaphosa, the minister of health, Dr Aaron Motsoaledi, and the director-general of health, Dr Sandile Buthelezi, argued that the applicants represented the interests of the private healthcare sector, which was accessible by only a small group of South Africans.

“In contrast, the public health system, administered and overseen by the national Department of Health and government, is an overburdened and under-resourced system that provides fundamental healthcare services, at no or minimal cost to more than 80% of the South African population,” they argued.

Millar said if this was the reason for the scheme, it amounted to the indenture of the private medical sector in the service of the state and by all accounts was an expropriation of property and services.

He pointed out that for instance, the law did not provide a mechanism for affected parties to obtain just and equitable compensation for the use of their resources.

“Instead, the DG has the power to impose a condition requiring the sharing of resources, failing which the establishment will not be issued a certificate and cannot operate lawfully.”

He said the law did not provide for a process to appeal against a decision by the director-general except for an internal process that would leave it to the judgement of the minister of health.

“It is self-evident that even this process would be fraught with difficulty inasmuch as from the time that the DG refused or withdrew a certificate, the affected parties would be unable to render any services (and earn income), as doing so renders them liable in terms of section 40 to a criminal conviction and fine and/or imprisonment,” he said.

The Department of Health has not yet commented on the ruling. DM

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