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More practical solutions for SA’s health future

Health funding options towards Universal Health Coverage

Tuesday, 20 February 2024, The funding required to initiate and sustain the National Health Insurance (NHI) project, aimed at achieving Universal Health Coverage for South Africa, has healthcare industry experts and some of the country’s leading economists raising fundamental questions about its financial viability as outlined in the NHI Bill.

“South Africa needs actionable solutions now to broaden healthcare access and improve affordability however, with the current debt to GDP ratio and many demands on the public purse, it is difficult to see how the State could afford to finance the NHI alone, as outlined in the NHI Bill,” said Craig Comrie, chairperson of the Health Funders Association (HFA).

“The existing regulatory framework could offer a more viable springboard to achieve the aims of Universal Health Coverage sooner through collaborative healthcare initiatives that improve healthcare access for all South Africans.”

He points out the substantial financial commitment demanded by the NHI, noting that an initial allocation of more than R20 billion has already been disbursed. “This allocation, which is merely the tip of the iceberg, accentuates the magnitude of the financial hurdle that lies ahead for the country and its people if the NHI Bill is enacted in its current form,” Comrie says.

“In the current economic climate marked by reduced GDP and tax collections, financing the NHI presents an impossible task for National Treasury, particularly with the exclusion of private health funding collaboration.

“We are therefore urging the Presidency to prioritise the exploration of alternative pathways towards realising Universal Health Coverage in South Africa. There is a critical, urgent need to reassess and redirect vital resources towards more pressing national priorities than the NHI's potentially unsustainable framework.

“This is a heavy financial burden for the South African taxpayer to shoulder, particularly at this time, with cost projections ranging from R200 billion to a staggering R500 to R800 billion annually if fully implemented. This exorbitant sum, dwarfing recent and future government bailouts, presents an insurmountable challenge given our economic downturn and diminished tax revenue,” asserts Comrie.

The HFA, a professional body representing the majority of medical schemes in South Africa, proposes leveraging the existing regulatory framework to expedite Universal Health Coverage through collaborative healthcare initiatives, emphasising the urgency of exploring viable alternatives.

Comrie also addresses the limitations of tax increases as a revenue solution, emphasising the strain it not only places on families but on the broader economy.

"While NHI implementation may be decades away, we recognise that immediate action is imperative to enhance affordability and access to quality healthcare. We, therefore, must prioritise exploring sustainable solutions rooted in economic viability," he urges.

“At this stage, realistic timelines for NHI implementation will be decades away, and in the meantime, there is much we could be doing to improve affordability and access to quality healthcare for more South Africans. A good starting place would be to finalise the Low Cost Benefit Options framework and ensure regular reviews of Prescribed Minimum Benefits [PMBs].

Highlighting the current ambiguity surrounding NHI services and the staggering cost projections, Comrie stresses the critical need for clarity from the Minister of Finance.

He emphasises that the HFA's stance is firmly rooted in a deep commitment to quality healthcare and the implementation of sustainable solutions that can definitively grow accessibility. This mission necessitates prudent financial planning and a steadfast commitment to transparency in healthcare financing.

"With Treasury facing an impossible task to finance the NHI in its current proposed form, all alternatives must be considered. As a country, we cannot afford to gamble on a project lacking clear direction and financial viability.

“We advocate for a recalibration of priorities, urging policymakers to explore collaborative healthcare initiatives to deliver healthcare funding solutions within well-researched reforms including those indicated in the Health Market Inquiry.

“Now almost five years later, the reforms suggested by the Competition Commission have yet to be actioned. South Africans cannot wait decades for NHI implementation, and the real question is, can we afford to embark on this unproven and unrealistic model," he asks.

"NHI is not the sole path to Universal Health Coverage, nor is it the most expedient. We must pursue reforms rooted in economic viability to safeguard healthcare assets and extend access. As the HFA continues to champion sustainable healthcare solutions, we affirm our commitment to preserve South Africa's healthcare landscape for the benefit of all citizens,” he concludes.