Media release: Free Market Foundation Supports the National Planning Commission on NHI

21 February 2022

Gail Day
076 836 5661

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Free Market Foundation Supports the National Planning Commission on NHI

The Health Policy Unit of the Free Market Foundation fully supports the views recently presented by the National Planning Commission (NPC) to Parliament’s Health Committee hearings on the NHI Bill.
The NPC has correctly warned that the National Health Insurance (NHI) would create a single source of potential failure for both the private and public systems in the country, which could result in a collapse of all health services nationally. It also warned that the Bill was drafted on the assumption of a ‘perfectly efficient, ethical and capable state’ and ignored the ‘inadequacy of quality in the delivery of public healthcare services’.
Michael Settas, Chairman of the Health Policy Unit, says, “It has been an unfortunate danger throughout the policy process that objections to the NHI have often been dismissed by government officials as the private sector being ‘selfish’ for not wanting to provide better healthcare services for poorer citizens. This has meant that any alternative solutions to providing better healthcare that have emanated from the private sector have simply been pushed aside without consideration.”
The NHI Bill is proposing to nationalise the private healthcare sector by collapsing it, simultaneously with the public sector, into a state-run NHI system in the belief that this will somehow magically improve quality in the public sector. It has been a feature of the policy process that government has distorted facts around the private healthcare sector to make it a scapegoat for public sector failings, providing government with a shield to avoid having to account for poor public healthcare services.
Nowhere in the policy process has government provided evidence that the private sector’s existence is the cause of public sector woes, yet this accusation of causation has been a dominant feature of the policy process and a common reaction from mostly ANC-aligned members of the parliamentary health committee. This belief of causality from some committee members has also been keenly observed and analysed by
Alicestine October of Spotlight, showing how the arguments for NHI are so ideologically narrow and often removed from reality.
The NPC also criticised the weak governance framework proposed in the NHI Bill, stating that “laws should be crafted to withstand the worst inclinations of any public official”.
Settas adds further, “We have for years been highlighting the danger of the weak governance framework in the NHI Bill, which will almost certainly lead to grand scale corruption. Under this proposal, the NHI Fund will become the country’s largest state-owned entity under the virtually exclusive control of the Minister of Health, with a centrally controlled budget around three times that of Eskom’s.
We reiterate that the NHI Bill has been a poorly drafted policy, which has predicated success on the narrow attribute that centralisation of all the country’s healthcare assets under the state’s control will automatically bring about improvements. There has been woefully inadequate technical and feasibility analysis of many areas of this proposal, and it has not addressed mechanisms to rectify poor quality public health services - other than the assumption that more money will somehow automatically result in better outcomes. The policy process has also disregarded the serious fiscal implications of the NHI policy, which proposes to eradicate the private health sector, which currently makes significant tax contributions to the fiscus, and then to raise new dedicated NHI taxes equivalent to 3% of GDP or around R160bn pa (2021 prices).
It is our considered view that government should withdraw the NHI Bill and commence with a reformed policy process that will be inclusive of all affected stakeholders and that can adequately address the substantive shortcomings in the NHI proposal. This will also allow a focus on addressing the poor quality of public sector outcomes, regulations to improve affordability and hence expansion of the private sector, and to create a national strategy to increase the number of medical graduates the country produces each year. An overarching assessment of the fiscal implications of this renewed policy can then be made, especially in light of the country’s current precarious finances and limited prospects for future economic growth.


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