No surprise! NHI cannot be implemented

Health ombud Prof Malegapuru Makgoba’s warnings in the article Most public health facilities would fail NHI test, should really come as no surprise to anyone and he should be commended for speaking the truth to parliament’s health portfolio committee on the poor conditions in state facilities and how detached from reality the NHI proposal is. 

Clearly he was appropriately diplomatic in his commentary, but from the outset of this unworkable proposal the NHI has been long on socialist and populist ideology and woefully short on technical and financial realities! NHI has been primarily promoted on the fallacious notion that the public health sector’s problems can be placed at the door of an insufficiency of resources, both financial and human. Fortunately none of this can be supported by fact – our own research emanating from public sector publications highlights that in absolute terms as well as on a per capita basis, the public sector employs more doctors today than it ever has in the past. The number of public sector doctors and medical personnel employed by the state grew by 43% between 2006 and 2016, resulting in the ratio of medical personnel to population improving by 25% over this period. This was enabled by a doubling of the public health budget from 2000 to 2020 in real per capita terms!

Even in the more recent years of low economic growth, the number of employed public health personal (clinical and non-clinical) went from 300,882 in 2018/19 to 324,763 in 2020/21 – an increase of 4% per annum, which well exceeds the current population growth rate of ±1.5% per annum. Even more so, the collective provincial public sector budget went from R197.3bn in 2018/19 to R234.8bn in 2020/21 – a substantial 9.1% per annum, and more than double the official CPI for that period.

The Office of Health Standards, who are mandated to inspect public health facilities with a view to assisting them in improving their outcomes, has not seen any material change in the low compliance rate of ±15% of public sector facilities since it started undertaking inspection reports in 2016. In their latest available inspection report (2020/21), the provinces of Limpopo and North West did not have a single facility attain accreditation.

But clearly it is not politically expedient to promote such facts to the public, as it would then raise the extremely tough questions as to why the public health sector is in such a mess and getting worse over time.

But the answers to such questions are in fact to be found in the comments Prof Makgoba made to the health portfolio committee – he is quoted in the above article as saying, “The only province that seems to have its act together is the Western Cape ... The other provinces are really in difficulties and need ... to jack up their work.”

The provincial equitable share (PES) ensures that public budgets for provincially governed services, education and healthcare the largest of them, are roughly equalised on a per capita basis across the provinces. The Western Cape’s per capita public health budget in 2020/21 ranked 3rd out of the nine provinces and on a per capita basis it ranked 6th for the number of employed staff. Yet when we examine proxy indicators on outcomes, the Western Cape performs notably better than all the other provinces. On maternal mortality ratios the Western Cape has by far the lowest rate at 84 deaths per 100,000 births, while the average across the remaining eight provinces is 145 (Gauteng is the 2nd best performer at 129). 

A similar pattern emerges with medicolegal liabilities. The latest national figure (2020/21) now stands at an astonishing R120bn – approximately half the national public health budget. Yet the Western Cape’s medicolegal liability is a relatively paltry R80m or 0.07% of the overall national liability. By contrast, the Eastern Cape health department employs 22% more personnel on a per capita basis and has a similar per capita budget to its western neighbour, yet its medicolegal liability is an astonishing R38.6bn – equal to 140% of the provincial health budget. The Eastern Cape health department is technically bankrupt by a long shot!

The Western Cape is the only province in the country governed by the Democratic Alliance, and evidence suggests that they have been able to contain corruption and cadre deployment to a far greater degree than the ANC, and hence maintain governance frameworks and retention of qualified managers within their health facilities. This far more likely explains their substantially better performance on maternal mortality rates and comparatively non-existent medicolegal liabilities and is a strong indicator that the poor performances of the other provinces are caused more by institutional management failures, poor governance and the resultant malfeasance, rather than from an insufficiency of funding or personnel.

This letter was first published on Business day on 16 October 2022

Michael Settas
Health Policy Unit Chairman
Free Market Foundation

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