Staff Writer
·20 Jun 2023
Legal experts at law firm Webber Wentzel say that the National Health Insurance Bill is an “over-hasty” attempt by the government to completely transform public healthcare – leaving confusion and potential destruction in its wake.
The NHI Bill was rubber-stamped through the portfolio committee on health in May and passed by an ANC majority in the National Assembly in June. The controversial new laws are now on their way through the National Council of Provinces (NCOP) for concurrence and will then likely head to president Cyril Ramaphosa to be signed into law.
The issues with the bill are plentiful and legal experts, industry stakeholders, consumer groups, business groups and even parliament’s own legal advisors have warned of the many pitfalls it faces – on constitutional and other grounds.
According to Webber Wentzel, two of the most significant pitfalls are in how the scheme will be funded, and the destruction of private healthcare that it will likely leave in its wake.
“Many stakeholders and experts have raised concerns that the NHI scheme envisaged in the Bill is simply unaffordable, particularly as it would require an extensive administrative apparatus,” the firm said.
“A related concern is the extent to which the NHI will rely on the public health care system to deliver services, and the capacity of that system to provide an acceptable quality of services.”
Given the dire state of public health care in South Africa, the firm said it is surprising that the government persists with plans to spend vast resources on implementing the NHI.
“Those resources would greatly improve the delivery of quality health care – and universal access to that care – if they were deployed directly in the public health sector,” it said.
The funding problem
Despite being steamrolled through the legislative processes, it is still not clear how the NHI will be funded.
The bill makes provision for the scheme to be funded through taxes, but this is non-specific and contradicts other parts of the proposed laws.
“Clause 49 states that the fund’s chief source of income will be money appropriated annually by Parliament. This must be appropriated from collections of, among others, general tax revenue, a payroll tax and a surcharge on personal income tax,” Webber Wentzel said.
“This taxation regime is, however, difficult to reconcile with clause 2, which states that the Fund will be funded through ‘mandatory prepayment’ – a term that is defined as ‘compulsory payment for health services before they are needed in accordance with income levels’.”
This is also in contrast to clause 55(1)(t), which empowers the Minister to make regulations on “all fees payable … to the Fund”, it said – again, something that is steeped in uncertainty.
The government has been exceptionally cagey on where the money for the NHI will come from, but has made it clear that taxpayers will ultimately foot the bill.
Wake of destruction
Then there’s the impact on private healthcare, medical aid schemes and other connected industries.
While the laws make room for medical aids in the form of coverage for procedures and care not catered to by the NHI – the end goal is apparent: the Fund is intended ultimately to cover a comprehensive range of benefits; the bill envisages that the businesses of medical schemes will shrink dramatically which may threaten their continued existence.
“This regime is likely to face constitutional challenge,” it said.
This is on the basis that it infringes:
- The right to access health care services, by forcing many people who currently access private medical care via medical scheme funding to rely on what is currently a woefully inadequate public health care system;
- The property rights of medical schemes and their administrators; and
- The right to freedom of trade, occupation and profession.
Webber Wentzel highlighted that crucial issues also exist around the regulation of accredited service providers.
On top of onerous requirements for accreditation, the bill does not clarify how reimbursement rates will be determined – with rates vaguely set to be paid annually – and there is zero information about how service providers can best procure products when the fund determines which suppliers to use.
“Given its importance to sustainable access to health care, one would at least have expected the bill to make clear that the payment rates must be set at a level that allows providers to cover their efficient costs and make a reasonable return,” the firm said.
“To the extent that (the bill) requires private service providers to procure from suppliers chosen by the Fund, this blurs the line between public and private procurement, reduces competition, and unduly restricts private service providers in the conduct of their business.”
The legal experts also highlighted another key problem: the minister has too much power.
“The role that the Bill contemplates for the Minister is also potentially problematic. Clauses 4(1) and 7(1) provide that the Fund must purchase health care services “in consultation with the Minister” – which our courts have held means that the Minister’s concurrence is required.
“It is wholly impractical to require the Minister to concur in the purchase of health care services,” the firm said.
“It is unclear to us why the Minister must agree on detailed issues that require the application of clinical judgement, such as the benefits to be determined by the Fund’s Benefits Advisory Committee and the formulary to be employed by the Fund.”
“While seeking to secure universal access to quality health care is generally supported and rightly so, the Bill represents an over-hasty effort to fundamentally restructure the country’s public health service with potentially devastating consequences for healthcare providers and consumers alike.”
By Martin Versfeld, Prelisha Singh, Glenn Penfold, Robert Appelbaum
Read: Why the NHI is impossible
Artmotion S.Africa
