The redistribution lens of the NHI undermines the objective of universal healthcare coverage

26 Jun 2023

The NHI will not achieve universal healthcare despite its strong moral foundation. In its current iteration, it is about finances rather than health services. And for all the talk about health being a public good, the NHI will essentially be a transactional system with buyers and sellers of health services.

In another world, the National Health Insurance (NHI), recently adopted by Parliament, will achieve universal healthcare for all South African citizens. It will ensure equitable access to healthcare regardless of the demographic profile, social status or geographic location of the patient.

Sadly, in this world and with the NHI in its current form, this will remain elusive, despite the moral posturing captured in the preamble to the bill.

The moral imperative for the NHI is compelling and it will be hard to find any sane person in opposition to it. While the objective is unchallenged, the same cannot be said about the tools that the NHI intends to use to achieve this.

Blinded by the overwhelming moral case for the intervention, the drafters neglected to properly account for the accompanying practical and complex implementation implications. The result is a grand scheme full of promise that leaves unanswered questions lingering decades after its initial conceptualisation.

The fact that the NHI has been in the making for this long is a red flag in itself. It speaks to the drafters grappling with the historical rationale for the project.

In a sense, history has overtaken the original intent of the NHI, and the health ecosystem that exists today is very different from the one that existed when the idea was first floated.

When it was conceived, the NHI’s main purpose was to eradicate the apartheid nature of the health system. The public system serviced mainly black patients, with their white counterparts serviced mainly in the private system, perpetuating glaring race-based discrepancies. Reflecting the inequities of apartheid, the private health system was now firmly in the NHI’s crosshairs.

Demographic shift

Post-apartheid South Africa saw a demographic shift, with significant numbers of black South Africans signing up for medical aid schemes. This was not only limited to the new middle class, as even labour unions created in-house medical schemes for their members. The private sector exploded with the establishment of a number of new private healthcare companies and the development of new private facilities at a rate not seen during apartheid.

The flourishing of the private sector during post-apartheid South Africa must be viewed as an indictment of public sector healthcare.

As this was happening, problems were stacking up in the public sector, threatening to crash it. While the original gripe with the health system was its apartheid architecture, proponents of the NHI started to blame the private sector for resource shortages in the public sector.

They often present disparities between private and public sector health spending as a problem which the NHI can resolve. This often gets elucidated by the observation that the private sector, while outspending the public sector, serves a significantly smaller portion of the population.

One would have thought that this disparity might be easily dispatched by the government simply increasing its health spending. Not so, as the government has erroneously critiqued the country’s health spend as if it were a single pot.

It views spending in the private sector as a constraint on that in the public sector – a fundamental flaw on which the NHI is designed. A decrease in spending in the private sector will not miraculously result in an increase in public sector spending. The idea that the public and private sectors are in competition for some finite resource is simply misguided.

Finances before health services

With the NHI Fund as its crown jewel, it should be abundantly clear what the NHI is all about. It’s about finances rather than health services. And for all the talk about health being a public good, the NHI will essentially be a transactional system with buyers and sellers of health services. Despite the intention to have a single purchaser of services, it still represents a perversion of the idea that health is a public good.

Furthermore, it would be foolish to think that simply because it is a government-run fund, it would therefore be free from the workings of a normal insurance company. The Road Accident Fund is a good example of a governmental agency trying to operate like an insurance company, and doing so unsuccessfully.

Given the complexities associated with the NHI and the myriad of unresolved questions, is this really the only vehicle through which universal healthcare can be achieved?

Wouldn’t it be easier to simply fix the public healthcare system rather than to nuke the entire system and deal with the fallout later?

While fixing the existing system must be regarded as the obvious option to choose, it may be a bridge too far for the proponents of the NHI as it will represent a departure from the genesis of the project.

At its core, the NHI remains an attempt to achieve redistribution of resources. This redistribution lens prevents the drafters of the Bill from seeing the opportunities available through growing existing healthcare capacity.

The redistribution objective of the NHI is not concerned with providing more access; instead, its sole focus is to rearrange the resource distribution configuration.

It is for this reason that the NHI will not achieve universal healthcare despite its strong moral foundation. DM

Dr Claire Botha is an independent health economist.

Categories:

Tags:

DM is much better if you are signed in...

South Africa

Demographic shift

Finances before health services