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What would it take to turn National Health Insurance into universal healthcare?

What would it take to turn National Health Insurance into universal healthcare?
Women in the Xhora Mouth area of the Eastern Cape often have to make their way through forests to get to a clinic. (Photo: Lulama Zenzile / Spotlight)
Tracey Naledi, Krish Vallabhjee, Atiya Mosam and Mark Heywood
By Tracey Naledi, Krish Vallabhjee, Atiya Mosam and Mark Heywood
30 Jul 2024
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The 2019 report of Health Market Inquiry shows that South Africa’s private healthcare overservices its clients, offers variable patient experiences, and varying quality of care. This inquiry goes on to call for regulatory reforms to enhance efficiency, competitiveness, affordability and service quality.

South Africa is a country in which fewer than 16% of South Africans have private medical insurance, and where, 30 years after the end of apartheid, nearly three quarters who do are white. Approximately 50% of the country’s entire health spend serves this tiny margin of private sector users.

Despite this, the public health sector with the other 50% of health expenditure has been able to ensure that 70% of the population has access to Universal Health Care services that include reproductive, maternal, newborn and child health, and prevention/care around infectious diseases and noncommunicable diseases. Has this care been as quick and as excellent as we’d all like? No. But neither has care in the private sector. The 2019 report of Health Market Inquiry shows that South Africa’s private healthcare overservices its clients, offers variable patient experiences, and varying quality of care. This inquiry goes on to call for regulatory reforms to enhance efficiency, competitiveness, affordability and service quality. 

It is with this context in mind that just before the recent elections, the then-majority ANC government passed the National Health Insurance (NHI) Act. Judging by the media this caused fear and outrage in sections of the population. Yet for the authors of this article as public health practitioners and social justice activists, we recognised the opportunity the NHI poses to be the most transformative health policy since our democracy – if implemented ethically, with the right priorities and the requisite organisational and health system capability. 

The ongoing debate around the NHI in this period has facilitated public discussion about its financing, governance, administration, and resourcing. These debates should be considered alongside the evidence shown by the World Health Organization’s data that increased healthcare investments promote social protection, cohesion and economic growth; offering 9:1 returns; and increasing per capita GDP by 4% for every extra year of added life expectancy. 

Very limited lens


The focus on the NHI debates are too often made through a very limited lens on the impact of hospitals and private care in particular. This lens often neglects an understanding of providing and adequately funding the essential components of primary healthcare such as preventive, promotive, rehabilitative, and palliative care; advancing agency, economic development and democracy. 

Even though the National Health Act (available here in an annotated form) has its foundation in primary healthcare, the reality is that investments in the South African health system are largely hospicentric and focus on curative care. The government spends less than a third of its total health budget on limited primary healthcare; seven times less than its hospital expenditure. And there is no real impetus for change. Private sector health users fund their primary healthcare out of pocket or through limited health insurance benefits, or through the public service. 

The World Health Organization defines universal health coverage as existing “when all people have access to the full range of quality health services they need, when and where they need them, without financial hardship”. If our goal is universal health coverage, which many that denounce the NHI still insist they support, then the focus needs to shift to ensuring that health system reforms prioritise primary healthcare that is proven to deliver universal health coverage cost effectively.  The World Health Organization asserts that primary healthcare that is impactful is that which includes primary care available to people closest to their communities embedded in a strengthened health system; empowerment of people and communities; and multisectoral action to address social determinants of health.

But how could NHI advance universal health coverage? By implementing five key elements:

  • Prioritise neglected and under-served areas.

  • Orient the health system towards primary healthcare.

  • Explore a blended funding model for primary healthcare.

  • Implement the Contracting Units of Primary Care system within a District Health Services model.

  • Strengthen social accountability and community involvement to improve governance and oversight.


We expand on each of these below.

Prioritise neglected and under-served areas


Addressing health inequities means allocating resources based on greatest need and where we can have the biggest impact on population outcomes. In other words, prioritising primary healthcare and rural health. Approximately 80% to 90% of patient contacts happen in primary healthcare services; and a large footprint of primary healthcare facilities and community-based services reach into households, schools and other sites.

Madwaleni Hospital near Elliotdale is one of the hospitals servicing the people of the Xhora Mouth area in the Eastern Cape. (Photo: Alicestine October / Spotlight)



However, as it stands right now,  in the early stages of implementation the NHI is unlikely to reach significantly into rural and underserved areas. This is because NHI funding is dependent on compliance with a set of standards within the current health infrastructure. Due to historically better funding secondary and tertiary hospitals are more likely to meet these standards than district hospitals, primary healthcare facilities and rural facilities. Until more targeted interventions are put into place to support primary healthcare facilities to comply with these necessary standards, the NHI will merely entrench the current inequalities that marginalise rural and chronically poor communities and continue to slant health service delivery towards hospicentric and urban healthcare. 

Orient the health system towards primary healthcare


A recent article in The Lancet shows the benefits of orienting health towards primary healthcare systems. A focus on disease prevention, early detection and treatment, treatment adherence support, rehabilitation and appropriate palliation, improves access to quality services, reduces the use of specialists and hospital services, and improves population health in the long term. Both user satisfaction and self-reported health improved. Primary healthcare-based systems are better prepared for, and more resilient in, health emergencies like pandemics. 

mediclinic cleared billing ensafrica Vergelegen Mediclinic in Somerset West. (Photo: Gallo Images / Misha Jordaan)



The Lancet further asserts that the long-term benefits of reorienting health towards primary healthcare far outweigh the costs. However, specialised hospitals are important to ensure a balanced health system to address more complex health conditions. But with a strong primary healthcare system they can be more cost effective and efficient. 

Many commentators in the NHI debate focus on whether the economy of South Africa can “afford” and sustain the NHI. We believe that a focus on primary healthcare offers the most important starting place to ensure that more South Africans can be healthier, able to work and thus contribute to the economy. Innovation and technology provides opportunities to develop newer service delivery models that can improve access and quality efficiently and equitably. Paradoxically, greater expenditure on primary healthcare is a cost containment and cost-saving strategy. 

Explore a blended funding model for primary healthcare


Within the NHI framework, medical practitioners at primary healthcare level will be paid a fixed amount per patient in their care for a specified period, regardless of how often the patient visits them, or for what service (this is known as capitation). It aims to incentivise healthcare providers to offer cost-effective care by rewarding them for maintaining the health of their patients, rather than for the volume of services rendered. This will only work if healthcare providers reorient their services to collaboratively work within a cost efficient and effective team-based approach.  

Steve Biko hospital - Health care workers and patients in the temporary outside area at Steve Biko Academic hospital Health care workers and patients in the temporary outside area at Steve Biko Academic hospital, created to screen and treat suspected Covid-19 cases. (Photo: Gallo Images/Alet Pretorius)



On the other hand, inefficient service delivery models could result in providers under-servicing or “cherry-picking” healthier patients with less costly care while avoiding those who are sicker and likely to incur higher costs. 

But another danger exists. For service providers in rural and peri-urban areas this model poses more flaws. Fewer medical practitioners in underserved populations mean that the fixed-fee arrangement might not adequately cover the overheads and investment needed to register with and operate within the  NHI.  A blended model of financing may be the most feasible, especially in the early stages of implementation. This may include a mix of capitation, some subsidisation for overheads or infrastructure or human resources as well as performance-based payments. As time proceeds and providers are more adept at managing their services, the financing model can be adjusted in the face of the lessons learnt as the system evolves. 

We don’t pretend that blended funding for the strategic purchasing mechanism necessary to allocate resources without corruption and in a way that maximises health outcomes, efficiency and equity will be easy. Nor that ensuring providers are well versed in these mechanisms will be straightforward either. But both are imperative.

Implement the Contracting Units of Primary Healthcare system


The concept of a Contracting Units of Primary Care system represents not only an administrative mechanism to facilitate strategic purchasing of primary healthcare services, but a real opportunity to develop a multi-stakeholder and community based approach to primary healthcare. A Contracting Units of Primary Care system network consists of a district hospital, clinics or community health centres and ward-based outreach teams including private providers such as local private GPs and pharmacies in horizontal organised networks within a specified geographical sub-district.  

Xhora Mouth area of the Eastern Cape Women in the Xhora Mouth area of the Eastern Cape often have to make their way through forests to get to a clinic. (Photo: Lulama Zenzile / Spotlight)



It is at this level that service delivery and population based interventions can best respond to local needs. We need ward-based outreach teams with well trained and fairly compensated community health workers and other mid-level workers supported by district clinical specialist teams that include family physicians;  to be effective these teams need to be strengthened and supported  by efficient referral mechanisms to specialised care and outreach. Done properly, support by these specialised services to the Contracting Units of Primary Care system network could be a game changer in health care access, equity and quality. 

Read more: Motsoaledi slams response to medical certificates of need high court ruling as ‘propaganda’ against NHI

Within the Contracting Units of Primary Care system network there could be stronger focus on prevention, promotion, early detection of disease and adherence to medicines, rehabilitation and palliation closest to people’s homes. The employment and creation of career paths for community health workers who are largely black women, could promote equity and bring dignity to them and their families. These benefits of well run community health worker programmes are well evidenced and documented with Brazil, India and Ethiopia as examples.

Currently, the way the act addresses the organisation of the Contracting Units of Primary Care system is opaque. Some of the issues that need clarification are the primary healthcare benefit package, mechanisms to distribute patients between private and public sector, the relationship with the District Health Management Office,  systems for  governance and intersectoral action needed to address social determinants of health. The nine provinces have been asked to identify learning sites for these networks and together with the imminent publishing of regulations, greater conceptual clarity will emerge.

We believe that in addition to training in hospitals, Contracting Units of Primary Care systems provide an opportunity for  interprofessional education of health workers who would be fit for purpose for the South African health system to provide a comprehensive package of preventive, promotive, curative, rehabilitative and palliative services in a collaborative manner. Health sciences students could be “learning while serving and serving while learning” closest to communities while improving access to healthcare and health outcomes. Investing and creating a learning environment for all health workers is an important imperative for continuous improvement in service delivery. 

Strengthen social accountability and community involvement to improve governance and oversight


The implementation of the NHI requires ongoing strengthening of  the health system as a whole. Critical to this is ethical and values-based leadership/management, stronger governance, better operational processes, and more flexible, adaptable implementation mechanisms based on emerging evidence and learnings. 

We can hypothesise and model for a very long time, but there is no better teacher than real life experience in a complex adaptive system. South Africa has some of the best health academics in Africa and globally and we need to harness their expertise to support the creation of learnings and knowledge for  successful implementation of the NHI. 

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

South Africa’s public health physicians, data scientists, health economists, and health system researchers together, in partnership with health system practitioners,  offer strong knowledge generation muscle to try out models of implementation, and to adapt and pivot if required;  keeping clear the goal of transforming the health system towards equitable access to cost effective, quality health care that ensures stronger health outcomes.

South Africans are demanding accountability in all spheres of public life including in health care. It is essential to properly resource and strengthen the authority of community governance structures envisaged by the National Health Act. This includes getting District Health Councils, hospital boards and clinic committees to listen to their communities and ensure accountability of health services to those they serve. The consultative process for drawing up annual district health plans, for example, needs the same recognition and support as that given to Integrated Development Plans in local government – but with learnings from the Integrated Development Plans experience and without the corruption.  Strengthening trust, social accountability and community involvement is an important dimension to deepening democracy in our country.  

In the interests of health, stop bickering, start doing


It is well recognised that the implementation of the NHI will take many years. This is not unique to South Africa; experiences all over the world have shown that these kinds of health reforms take time to fully implement. In that time we must continue public dialogue, improve the governance mechanisms to prevent corruption and over-centralisation of power and resources, provide regulatory details of how the NHI Act will be implemented, and explain some of the opaque issues to provide citizens with comfort and trust in the process. 

Health is a cornerstone of societal well-being, particularly in a most unequal country like South Africa. Improved quality of life can break the cycle of poverty and empower citizens to contribute meaningfully to society. This is not just a moral imperative but a constitutional one. It is a foundation for a just and prosperous nation. We believe that if we take this constructive approach the NHI gives us an opportunity for transforming health outcomes that we can’t miss out on. The road ahead will probably be convoluted given the nature of complex adaptive systems, but we believe South Africans have the determination to embark on this journey. DM

All authors write in their personal capacity. Tracey Naledi is a Public Health Medicine Specialist, an Associate Professor of Public Health Medicine and Deputy Dean: Social Accountability and Health Systems, Faculty of Health Sciences, UCT. Krish  Vallabhjee is a Public Health Medicine Specialist, an Adjunct Associate Professor at the Health Systems and Policy Division,  School of Public Health, University of the Cape Town and Technical advisor to Clinton Health Access Initiative ( CHAI). Atiya Mosam is a Public Health Medicine Specialist and an independent consultant and founder of Mayibuye Health which specialises in health systems strengthening, PHC and health financing. Mark Heywood is an adjunct professor at the Nelson Mandela School of Public Governance at UCT, and an independent health and human rights activist.

The authors acknowledge and regret two important errors in our article and would like to clarify the following :  

Errata 1 :

South Africa is a country where less than 16% of South Africans have private medical insurance. Approximately 50% of the country’s entire health spend serves this small fraction of private sector users. Approximately 77% of the white population and less than 10% of the black African population have medical aid coverage. This reflects the historical and current inequality in our society.

Errata 2 :

The seven-fold difference between primary healthcare (PHC) and hospital spending was an overestimation as PHC spending remains spread across various programmes and levels of the health system. However, while government spending on PHC and district health services has been increasing over the years, investment in PHC needs to be further increased to improve access and health outcomes equitably.

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