South Africa’s National Health Insurance (NHI): Is it feasible and at what cost to the struggling economy?

SOUTH AFRICA - Report 14 Aug 2019 by Iraj Abedian

In the National Development Plan (NDP), it is stipulated that by 2030, South Africa’s health system should offer “quality care to all, free at the point of service, or paid for by publicly provided or privately funded insurance”. As such, to ensure provision of universal quality healthcare services to all South Africans, regardless of their socio-economic background, the National Health Insurance (NHI) bill was released last week on August 8, 2019, for parliament consultation. The NHI Bill proposes the establishment of a single NHI Fund as a public entity reporting to the Minister of Health. It will be established as an independent schedule 3A under the Public Finance Management Act, 1999 (Act 1 of 1999). As soon as the bill is passed, the existing draft implementation plan will then be modified accordingly to allow the transitional arrangement of rolling out the NHI in stages before its full operation by 2026.

The development of this policy has been on the horizon for the past twenty-five years since the establishment of the African National Congress (ANC) Health Plan of 1994. However, this was not the first time such a policy idea had been toyed with in South Africa. Back in the 1940s, a National Health Service scheme was introduced but never implemented. As stated by the World Health Organization (WHO), the scheme was similar to the British model and was comprised of free health care, a network of community centers and general practitioners as part of a referral system.

Initially, the outline of the proposed National Health Insurance was provided by a working group within the ANC led by the Human Sciences Research Council Resource (HSRC) Chief Executive Officer. The NHI system would be based on two principles, the right to health and social solidarity. In the former principle, it would mean that health services will be free at the point of use, while the latter would mean that the wealthy would contribute a percentage of their income to fund health services for the poor. Furthermore, the implementation of this NHI plan would require reorganization of health care delivery as well as transformation of the funding model for health, as universal access to health services can only be successful if the public sector is strengthened to the point where it becomes the provider of first choice, and mechanisms for ensuring that scarce and critical health service resources in both the public and private sector are designed.

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