National Health Insurance will be a disaster unless without clarity

Written by: Jay Mahn

National Healthcare Insurance, or NHI, is a system designed to promote equity amongst all South Africans, regardless of their socio-economic status, with regard to access to quality, effective and efficient healthcare when they need it. It is a way of providing access to healthcare to those South Africans who, at present, can’t afford it due to a variety of factors. Its aim is to allow all South Africans the opportunity to get the healthcare they need, when they need it, including reproductive healthcare, without having to worry about their health needs affecting their other financial obligations. It stipulates that cosmetic and unnecessary, non-healthcare related treatments won’t be covered, and specialists won’t be paid for, unless referred to by a primary healthcare facility and it is deemed necessary. If deemed necessary, it will be provided free of charge.

The NHI is said to be implemented over a 14 year period so as to allow time for the budget to accommodate it and state, with specificity, where the funding will come from. In addition, the effect on South Africa as a whole also needs to be assessed as whether this system is beneficial to the country or not.

The NHI hasn’t done a great job currently, as state hospitals still leave a lot to be desired when compared to their private counterparts. It indicates initial stages of a potential growing problem opening the door to bureaucracy and corruption.

According to the budget speech in February, the next phase of the NHI will be the implementation of a fund to improve ante-natal care and maternal health, improve health services for the mentally ill, provide glasses and hearing aids through its school programmes and improve health services for the disabled.

Funding sources for the NHI aren’t as clear as they should be, but indications and speculation point towards various taxes being imposed and using tax subsidies currently granted to medical schemes to help pay for the system.

All indications and previous examples already implemented in other, more economically developed countries (such as that in the USA, with Obamacare, and the National Health Service in England), indicate that it won’t work out the way it is intended. Government hasn’t clearly indicated where funding for this service will come from. In a country like South Africa, with massive and growing debt, an increasing dependency group and increasing unemployment (not to mention the corruption and fraud) a National Health Insurance does not seem viable.

If it does carry on on the trajectory it is headed, serious compromises, with regard to the quality of the health services received, will probably have to be made. Compromises such as the increasing costs of medical services, which will increase national debt (as seen in the USA with Obamacare) or a decrease in the quality of the healthcare provided (for example, longer waiting periods, which can be fatal, or a ‘brain-drain’ of competent healthcare professionals seeking higher pay and better services as seen in England).

Nothing is ever free. Costs are either hidden or lower quality goods and services are produced as the costs can’t just disappear. As American economist Thomas Sowell said, “It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it.”