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Statement By The Health Funders Association (HFA) On The NHI Bill

The Health Funders Association (HFA), representing approximately 73% of open medical schemes and 50% of total medical scheme membership in South Africa, rejects the National Health Insurance (NHI) Bill in its current form as it perpetuates several tenets which the HFA believes will undermine the quality of healthcare and the objective of moving towards universal health coverage in South Africa.

While this version of the Bill includes some minor amendments, these amendments fall short of the extensive recommendations made by the private health sector (including the Health Funders Association), opposition parties, various experts and other role-players, as well as the concerns raised by the Parliamentary Legal Advisor.

HFA’s key concerns are as follows:
1. Limitations on the benefits that medical schemes will be permitted to provide:
1.1 According to the Bill, once the NHI Fund has been fully implemented, medical schemes will only be permitted to offer benefits for services not covered by the NHI. HFA believes that adding the nearly nine million lives covered by medical schemes onto an already over-burdened and failing public health system would be detrimental to quality of care.
1.2 The input of the Parliamentary Legal Services to the Portfolio Committee indicates that the limitation on the role of medical schemes would violate the realisation of healthcare access. The constitutional implications of the right to access healthcare and freedom of association have not been addressed.
1.3 HFA believes that limiting the role of medical schemes will have broader implications on the South African economy as it could have a negative impact on investor confidence. Healthcare access is a key consideration for investment in South Africa and for South African employers. Furthermore, it will detract from investment into the healthcare system which would benefit the NHI Fund.

2. A seeming lack of input from Treasury on the financing mechanism:
While the Bill talks to the principles of cross-subsidisation, it is not clear as to whether affordability studies have been conducted. It is also unclear whether a longer-term financial strategy has been developed to sustain the proposed financing system. The Bill erroneously refers to the medical scheme tax credits as being paid to medical schemes rather than being a reduction in tax for individuals. This is a concerning misrepresentation as it suggests that the fiscal impact of the proposed tax increases is not being properly assessed. Before tax credits can be allocated to the NHI, these taxes must first be collected and this amounts to an unacceptably high tax-increase on a narrow base of taxpayers.

3. Flight of skills:
If the Bill is passed in its current form, the HFA is concerned that there could be further loss of already constrained healthcare skills. A strategy to partner with the private sector in increasing training capacity of healthcare skills, must form part of the implementation plan for NHI. This must be accompanied by a comprehensive retention plan to keep these skills in the country and part of the healthcare system.

4. A single NHI Fund:
HFA does not support the single fund model as it will be vulnerable to corruption and theft. As per the current Bill, this Fund will not be autonomous as the Minister of Health will have far reaching powers over the Fund in terms of appointments and regulations. HFA is particularly concerned that the unintended consequences of the changes to other laws included in the NHI Bill have not been properly addressed.

5. Quality of healthcare:
While there are pockets of excellence in the public health sector, most of the health provision and facilities do not meet the standards set by the Office of Health Standards Compliance (OHSC). This raises concerns about the overall quality of healthcare under NHI as well as the time that it will take for there to be sufficient facilities that meet the
necessary accreditation levels to support full implementation.
“We are cognisant that there is still a lengthy process to be undergone before enactment of this Bill.
However, we believe that the Bill in its current form is not fit for purpose if the matters raised are not urgently addressed”,
says HFA Chairperson, Simmi Bassudev.

For more information, please contact Maureen Litchfield on maureenl@hfassociation or 08271277619.
About HFA:
HFA is a representative organisation for medical schemes, administrators, and managed care
organisations. It represents 73% of open medical schemes and 50% of total medical scheme
membership in South Africa.