NHI – What is the Union Mandate?

19 July 2018
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Cosatu has been vocal in their support for NHI, even calling for the head of Aaron Motsoaledi as Minister of Health for his implementation delays. The unions seem to be suffering from a bipolar disorder of some kind in their latest Policy responses. 

When it comes to the support of National Minimum wage, Cosatu are ardent supporters of the Policy, even though all indications are that it is going to be making it more difficult for the poor and unemployed to get access to employment with its initiation. It is therefore effectively a pro-worker, anti-poor policy. When it comes to NHI, Cosatu indicates it is concerned about the healthcare access of the poor and unemployed and want NHI initiated post haste. The negative effects on the members of unions affiliated with Cosatu seems to go unconsidered. So NHI would be pro-poor and anti-worker. This duality is typical of the ideological quagmire that is NHI.

Member employment benefits and job security are two of the more important issues for which Cosatu and its member unions are advocating on an ongoing basis. Both these are going to be under fire in the proposed NHI system. There has been ongoing commentary by the Minister of health that subsidies for Medical schemes of Government employees will be scrapped under NHI. Certain Union members, as government employees, are receiving up to R60,000 annually in medical scheme subsidies and tax credits under the current healthcare system. These subsidies will be falling away under NHI. It is especially interesting, as the 2018 public service wage deal includes that government employees on the GEMS sapphire plan will be upgraded to the more expensive Emerald plan, at the Government’s expense. The result of being enrolled on NHI would be that union members, who access the private sector under their current scheme membership, will be denied additional employer contributions towards medical scheme membership to cover whichever services are lacking under NHI. All indications are that a limited budget for NHI will lead to a limited basket of services, leaving union members without comprehensive health cover.

As far as job security is concerned, Cosatu and its affiliates have clearly not read the NHI Draft Bill with any amount of intense scrutiny. The Bill states that Provincial health departments “shall be to provide health services which the Fund would purchase”. The Bill also states that “At provincial level the Fund must transfer funds directly to certified, accredited and contracted provincial, regional, specialised and district hospitals.” One also has to consider that Primary Healthcare services will be contracted at District level via the Contracting Unit for Primary Healthcare (CUP). With all these province-administered hospitals as well as primary healthcare all falling directly under payment arrangements with the NHI, the question is, what function would the provincial health administration be performing? The Bill states that the remaining functions are co-ordinating health and medical services during provincial disasters; co-ordinating emergency medical services and forensic pathology; providing and maintaining equipment, vehicles and health care facilities in the public sector and protecting and promoting environmental health. The Human resource requirements for fulfilling these functions are, no doubt, far less than is currently the requirements in Provincial Health Departments. The end result will be job losses at every Provincial Health Department.

Any provincial-, regional-, specialised hospital which fails to attain the necessary norms and standards according to the Office of Health Standards compliance, will not be able to contract with the NHI. This will preclude service delivery of any kind at such a facility. In the absence of a funding stream in the Provincial Health Budget for such a facility, besides the maintenance of the equipment and the facility itself, the staff will become redundant, leading to further job losses amongst union members at the level of these hospitals. The third place where there will be large scale job losses will be in the private healthcare funding environment. One would reasonably expect 5 medical schemes in total to remain viable in a complementary capacity under NHI and perhaps one administrator. This will therefore lead to another 30,000 to 40,000 job losses in this sector. One would assume some of these unemployed will be union members as well. With the destruction of employment benefits and large scale job losses under NHI, what exactly are the unions doing to their members’ benefit by demanding the implementation thereof?

Dr Johann Serfontein is a member of the Free Market Foundation Healthcare Policy Unit


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