• Policy Watch SA

NATIONAL HEALTH INSURANCE: THE BILL

PLEASE NOTE: In January 2022, the authorship of Legalbrief Policy Watch will change hands. In anticipation of this, POLICY WATCH SA will no longer feature Pam Saxby's reports on the parliamentary process. Anyone wanting Pam to continue keeping them 'IN THE LOOP' should click here to contact us, using the form at the bottom of the page.

Meanwhile, during the final week of Parliament's fourth term for 2021, THE NATIONAL ASSEMBLY'S HEALTH COMMITTEE WAS STILL CONDUCTING PUBLIC HEARINGS. This is noting that,

given ongoing, widespread mainstream media coverage of virtual parliamentary hearings on the Bill, Legalbrief Policy Watch did not report on them. The next step in the parliamentary process will be when the committee is briefed by the Department of Health on input received. The volume of written submissions made and oral evidence heard could require several weeks to collate and summarise.


Against that backdrop, below, in reverse date order, are copies of Legalbrief Policy Watch reports on the Bill from the time an explanatory summary of its contents was gazetted in July 2019. The copyright to these reports is held by Juta Law.


3 September 2020

The mammoth task of scanning, validating and collating more than 64 000 submissions on the 2019 National Health Insurance Bill appears to be beyond available parliamentary committee capacity. This was confirmed during yesterday’s virtual meeting of the National Assembly Committee on Health, when members were asked to consider the appointment of an external service provider. This is noting that, although support staff from other committees are made available whenever possible, ‘they have other work to do’, notes Pam Saxby for Legalbrief Policy Watch.

According to a presentation on progress made to date (Parliamentary Monitoring Group), it could take until the end of the year to complete the collation process. Approximately half the submissions were made by e-mail and these have yet to be tackled – although 226 have apparently been found to be ‘substantive’. To date, while only 3% of submissions delivered by hand have been processed, most support Bill. By contrast, most e-mail submissions do not. It is not clear from the presentation or ensuing discussions how these conclusions were reached given the huge number in each category yet to be collated. Presumably, the input from close to 1 000 provincial public hearings participants also requires processing.

During yesterday’s meeting, several references were made to a general agreement reached last year on the need for help from an external service provider, although there is no official record of this. However, input from the DA’s Siviwe Gwarube tends to point to discussions on the side-lines of public hearings in Mpumalanga. Whatever the case, committee chair Sibongiseni Dhlomo noted that proposed terms of reference were among documents sent to members on Tuesday. These will probably be considered and ‘refined’ when the committee next meets. Should external assistance be made available, all 64 000-odd submissions (many of which include others in support of the argument presented) are expected to have been collated by the end of next month.

The committee may well decide to hold virtual public hearings during October from the 121 stakeholders wishing to make oral representations on the Bill – which would mean that this and the collation process would run concurrently. However, dates and other logistical details will be determined in the context of parliamentary programme priorities for the fourth term, which have yet to be finalised.


26 February 2020

Countrywide public hearings on the 2019 National Health Insurance (NHI) Bill have come to an end, and according to yesterday’s National Assembly Health Committee media statement ‘the majority of participants … pronounced their unwavering support for the Bill’, calling for its ‘immediate implementation’. This, notes Pam Saxby for Legalbrief Policy Watch, is mainly because of the benefits poorer communities expect to receive under the universal healthcare system envisaged. However, ‘in most cases’ support for the Bill was expressed on the understanding that ongoing public sector healthcare ‘challenges’ are addressed. Statements on hearings held in Tshwane and Mogale City refer to the shortage of doctors, nurses and medicines, glaringly inadequate infrastructure and low levels of ‘accountability’.

In a press release on Monday’s public hearings in Soweto and the greater Johannesburg metropolitan area, committee chair Sibongiseni Dhlomo is quoted as having said that ‘the people’ are clearly calling on government to ‘finally eradicate the inhumane practice of profit-making at the expense of human life’ – which is apparently expected to be one outcome of NHI. The perennial problem of corruption was also raised, along with concerns about funding given SA’s shrinking revenue base. However, a reference to the Bill’s silence on the role of traditional healers does tend to suggest that some participants may not have understood that the hearings were about a funding mechanism and not the services envisaged.

A ‘Spotlight’ (‘health journalism in the public interest’) article published on the Daily Maverick site provides some interesting perspectives. Among other things, a ‘glossy’, ‘double-page colour pamphlet’ distributed at the hearings by the Department of Health reportedly promised free quality healthcare (‘through the right referral pathways’) – also alluding to a massive upgrade of existing public healthcare facilities, bringing them on par with those in the private sector. ‘Government may introduce a small tax’ to fund this. Worryingly, two hearings in Gauteng were perceived to have been ‘highly politicised’, ‘pro-NHI T-shirts’ having been ‘handed out over the weekend by ANC members’.

This notwithstanding, Dhlomo is quoted as having cautioned participants against expecting to ‘wake up one day and there will be NHI’. Confirming that ‘implementation will be staggered’, he is confident that ‘by 2026’ South Africans should expect to ‘start seeing things happen’. Meanwhile, back in Parliament, the committee will focus on a review of written submissions on the Bill in anticipation of receiving oral presentations from key stakeholders on dates yet to be scheduled.


29 January 2020

Participants in yesterday’s public hearings on the somewhat contentious National Health Insurance Bill included several concerned about the implications of ‘endemic corruption within state-run institutions’ for NHI. This is according to a National Assembly Health Committee media statement, which also note fears that ‘staff shortages’ may well be ‘exacerbated’ by the ‘emigration’ of skilled healthcare professionals; and ‘uncertainty about where funding for the Bill will come from’ given ‘SA’s high unemployment rate and associated small tax revenue base’. Committee statements on last year’s hearings tended to gloss over these issues, observes Pam Saxby for Legalbrief Policy Watch.

Yesterday’s hearings also drew attention to the need for the country’s healthcare system to be ‘fixed’ and ‘well-functioning’ if NHI is to be successful – especially at primary healthcare level. In this regard, reference was made ‘insufficient’ numbers of doctors, nurses and ambulances; long queues at clinics; and infrastructure development and maintenance backlogs. In view of the ‘critical role’ of primary healthcare clinics in facilitating ‘equity and access’ for historically disadvantaged communities, the committee intends inviting Free State Health Department officials to ‘explain what they have done to address these challenges’.

This notwithstanding, thus far the nationwide programme of public hearings appears to have pointed to widespread in-principle support for the proposed new piece of legislation in the context of government’s commitment to ‘ensuring universal healthcare coverage’. Begun last October, the programme is expected to have been concluded by mid-February after one more hearing in Free State province followed by hearings in North West province, the Western Cape and Gauteng.


18 January 2020

A copy of the August 2019 national health insurance (NHI) district pilot evaluation report was circulated somewhat belatedly last week by Parliament – as an addendum to Health Minister Zweli Mkhize’s written reply to questions from the DA’s Hassina Ismael, notes Pam Saxby for Legalbrief Policy Watch. While concerns about the report’s implications for NHI implementation have been the subject of widespread media speculation since it was released, commentators appear to have overlooked the issue of ‘organisational culture’. Neither has the Minister commented on the matter, despite the report’s numerous references to shortcomings identified in the health care facilities evaluated. At the time, they were found to limit problem-solving and innovation – leaving ordinary staff members feeling disempowered, undervalued and demotivated. During a question and answer session in Parliament last September, Mkhize nevertheless insisted that NHI will be ‘successful’ (BusinessTech).

According to the report, during the evaluation it became apparent that ‘certain stakeholders are fearful of raising issues within current governance structures and of questioning the status quo’. ‘This stifles the generation of useful evidence, limits learning and diminishes the opportunity to benefit from the … experiences and ideas of … people that work within the system’, the report noted. Drawing attention to the importance of creative, responsive staff members licensed to ‘take the initiative’ when ‘embarking on a comprehensive health system strengthening and reorganisation programme’, it recommended that ‘leadership styles’ be assessed and ‘mentorship’ made widely available at management level.

The potential for a stifling organisational culture to compound other problems identified during the evaluation is obvious. A Business Day article published when the report was released refers, among other things, to inadequate staff levels and infrastructure; poor Internet connectivity (affecting the patient registration system and, presumably, the capacity to monitor medicine stock levels); learner health status screening and related interventions; access to health care for pregnant mothers and infants; primary health care community outreach initiatives; and input from private sector general practitioners and specialist doctors. Creating an environment in which staff are encouraged to use their initiative and respond innovatively when challenges arise is fundamental to addressing these issues.

It remains to be seen if the National Assembly’s Health Committee will have the latitude to discuss them this year as it proceeds with processing the NHI Bill, which focuses on establishing the necessary fund and providing for its governance. Meanwhile, as Legalbrief Today has already reported, the Department of Health is confident that – as a Public Finance Management Act section 3(A) entity – the NHI fund will be run with the same levels of efficiency and integrity apparently demonstrated by ‘more than 150’ similarly constituted national public entities and ‘hundreds more in the provincial sphere’. Unfortunately, two of SA’s largest national section 3(A) institutions tend to make nonsense of the department’s claim: the Road Accident Fund and National Student Financial Aid Scheme, each of which is notorious for mismanagement (BizNews).


10 January 2020

As a Public Finance Management Act section 3(A) entity, the funding mechanism proposed in the 2019 National Health Insurance (NHI) Bill is expected to be run with the same levels of efficiency and integrity demonstrated by ‘more than 150 section 3(A) national public entities and hundreds more in the provincial sphere’. This is according to a statement posted yesterday on the Department of Health website, reports Pam Saxby for Legalbrief Policy Watch. Prompted by concerns about ‘media reports in which various stakeholders have made public comments … (on) the … Bill’, among other things the statement notes the ‘high index of confidence’ in existing section 3A entities, which over the years have apparently ‘set a precedent of good governance and accountability’.

Urging ‘interest groups’ to desist from ‘generalising’ the findings of surveys with scientific ‘limitations’, the statement reiterates government’s commitment to ongoing engagement with medical practitioners and other stakeholders. This is noting that, as the Bill’s parliamentary process unfolds, interest groups and members of the public will have the opportunity to raise any concerns they may have about NHI and suggest how the Bill might be improved. So far, public hearings on its proposals have been held in Mpumalanga, the Northern Cape, KwaZulu-Natal, Limpopo and the Eastern Cape. In a recent interview conducted by Radio 702’s Clement Manyathela, National Assembly Health Committee chair Sibongiseni Dhlmo said this year’s public hearings programme will begin in Free State province towards the end of the month, followed by North West province, the Western Cape and Gauteng. He hopes to have concluded the programme by mid-February.

Meanwhile, ‘emanating’ from the 2019 presidential health compact, an anti-corruption forum has ‘already detected and prosecuted’ many ‘instances of fraud’ in both the public and private healthcare sectors; the public health infrastructure refurbishment programme ‘is seeing phenomenal results’; and ‘human resource capital has been boosted by various strategies’. Given that SA is ‘well on the path to controlling ... HIV/AIDS’, has ‘substantially reduced under-five, ... maternal ... and infant mortality rates’ and that protein energy malnutrition and ‘large gastroenteritis wards’ are ‘almost phenomena of the past’, in the department’s view universal health coverage is eminently achievable.


23 October 2019

A seven-week extension to the deadline for written submissions on the National Health Insurance (NHI) Bill was confirmed yesterday by the National Assembly’s Health Committee, having been announced on Tuesday in a DA press release. Pam Saxby, for Legalbrief Policy Watch, notes that according to the committee media statement, the new 29 November deadline allows ‘important’ healthcare delivery stakeholders two weeks more than they requested. Public hearings in all nine provinces are scheduled to begin on 25 October in Mpumalanga, followed by the Northern Cape on 1 November. At the time of writing, no dates had been set for the other provinces or for parliamentary hearings in Cape Town.

The decision to extend the deadline for written submissions on the Bill may have been influenced by recommendations in the Competition Commission’s recently released health market inquiry report. According to its executive summary, they were made with the aim of providing a better-functioning environment for a ‘fully implemented’ NHI system. The five-year inquiry found the private healthcare sector to be ‘neither efficient nor competitive’ – to some extent because the Department of Health has not used its ‘existing legislated powers’. Commenting on the report, National Assembly Health Committee chair Sibongiseni Dhlomo noted the need for government interventions to address private healthcare shortcomings.


25 September 2019

Media reports of plans to hold provincial public hearings this year on the National Health Insurance (NHI) Bill appear to overlook the nuances of the thinking behind this process, writes Pam Saxby for Legalbrief Policy Watch. A Parliamentary Monitoring Group (PMG) sound recording of a meeting last Thursday at which National Assembly Health Committee chair Sibongiseni Dhlomo announced what is envisaged confirms, among other things, that several stakeholders have already approached the committee for more time to prepare detailed written submissions and, subsequently, to present their views during parliamentary hearings. These stakeholders have apparently been informed, in writing, that their requests are being considered. Given the importance of allowing members enough time to study these submissions and others already received, according to Dhlomo it seems likely that parliamentary hearings will only take place next year – possibly also allowing more preparation time for those requiring it.

Meanwhile, members of the public will air their views during provincial hearings scheduled to begin on 25 October in Mpumalanga, as Legalbrief Today has already reported (IoL). This has since been confirmed in a committee media statement also noting that hearings in the Northern Cape province will follow on 1 November. Although dates for the remaining provinces have yet to be announced, four days have been allocated to each province thus far. According to the PMG recording, National Assembly House chair Cedric Frolick was approached in writing with the entire proposal, which Dhlomo then spelled out on Thursday to his committee. He also drew members’ attention to the importance of hearing first-hand the perspectives, concerns and expectations of ordinary South Africans before considering those of stakeholders with the resources to make more detailed written submissions and travel to Parliament to present them in person.


18 September 2019

Concerns raised by National Treasury during the policy development phase of national health insurance (NHI) have all been addressed, along with reservations expressed by the department about certain clauses in earlier drafts of the NHI Bill. Health Minister Zweli Mkhize confirmed this last week in a written response to questions posed by FF Plus representative in the NCOP, Armand Cloete, reports Pam Saxby for Legalbrief Policy Watch. According to the Minister, the Bill now reflects Treasury thinking on both provincial functions under NHI and the fund’s revenue stream. This is noting that an earlier version of the controversial piece of proposed new legislation was amended so that the fund envisaged receives an ‘appropriation from Parliament’ rather than imposing what Mkhize referred to as a ‘direct charge’ to the fiscus. The Office of the State Law Adviser has since confirmed that the Bill is in line with the requirements of both the Public Finance Management Act and the Division of Revenue Act.

At the time of writing, the National Assembly’s Health Committee had yet to decide whether to extend its 11 October deadline for written submissions on the Bill, in anticipation of public hearings. It was approached last week by the Helen Suzman Foundation, which is of the view that ‘certain documents’ understood to have been ‘crucial’ to the drafting process should have been released with the Bill (Politicsweb). One is the Competition Commission’s report on its private healthcare market inquiry, now due to be released at the end of this month. Another is a Treasury document most recently described as a ‘new financing paper for NHI’ (Business Day), which has yet to materialise.


2 September 2019

The National Assembly’s Health Committee has called for written submissions by 11 October on the 2019 National Health Insurance (NHI) Bill. This is in anticipation of a first round of parliamentary hearings, when stakeholders will also have an opportunity to make oral representations, notes Pam Saxby for Legalbrief Policy Watch. As has been widely reported, the Bill seeks to establish an NHI fund for the ‘strategic purchasing of health care services’ on behalf of users; create mechanisms for the ‘equitable, effective and efficient’ utilisation of the fund’s resources in meeting the ‘health needs’ of SA’s citizenry; and to ‘preclude or limit undesirable, unethical and unlawful practices in relation to the fund and its users. To that end, it focuses on the necessary structures, their roles and functions and related governance and administrative issues.

As the first step towards providing ‘access to needed health care that is of sufficient quality to be effective’, as well as ‘financial protection’ from its costs, the Bill was described last week by Health Minister Zweli Mkhize as a ‘vision’ and an opportunity to ‘up the game’. Briefing committee members on its objectives, the Minister conceded that government ‘will need to invest strongly’ in improving the standard of public healthcare services and facilities, which are at ‘such a low level of quality’ that his department ‘will have to fight hard’ to improve them. While the Bill proposes a range of possible revenue sources for the fund, these will be fleshed out in a separate money Bill apparently still very much a work in progress. The role of medical schemes under NHI will be the focus of regulations – presumably under the 1998 Medical Schemes Act, daft amendments to which were released last year for comment.


30 August 2019

An opinion document on the constitutionality of the National Health Insurance (NHI) Bill presented orally yesterday to members of the National Assembly’s Health Committee before a briefing from Health Minister Zweli Mkhize was withheld from journalists – despite reportedly having been made available for copying and public circulation well before the meeting, which began at 10:30. Prepared by the Office of the State Law Adviser and read verbatim to the committee by acting head Ayesha Johaar in the presence of media representatives and health sector stakeholders, the document was distributed to committee members only after lunch, by which time Johaar had left. Her presence at the meeting was apparently requested at surprisingly short notice. When the morning session ended and committee chair Sibongiseni Dhlomo was approached for permission to make copies available to members of the public, he declined – claiming not to have seen or read the document, notes Pam Saxby for Legalbrief Policy Watch.

Why Dhlomo adopted this stance is not clear. Underpinned by provisions in sections 27 and 146(2) of the Constitution, as well as sections 3 and 25 of the 2003 National Health Act, Johaar’s opinion is that the Bill is ‘constitutionally sound’. Section 27(1)(a) of the Constitution makes access to health care services a universal right. Section 146(2) spells out the conditions in which national legislation uniformly applicable ‘to the country as a whole’ prevails over provincial legislation. Section 3 of the Act deals with the responsibilities of the Minister, the national department, provincial departments and local authorities in providing healthcare services. Section 25 sets out the general functions of provincial departments in that context.

A committee media statement issued on Tuesday – refuting allegations that the Bill had been ‘suspended’ because of concerns about its constitutionality – also noted that, having met ‘one of the state law advisers’ to discuss the matter, Dhlomo was ‘comfortable’ with the advice he received. Johaar is the adviser to whom he was referring. However, widely publicised reservations by some stakeholders about government’s capacity to fund NHI, manage it financially and deliver quality services – not to mention speculation about the future role of medical schemes – may explain Dhlomo’s obvious distrust of media representatives. This is especially given the extent to which some journalists tend to sensationalise issues without scrutinising the documents on which they report. The indignant tone of DA Evelyn Wilson’s input during the meeting probably did little to smooth already ruffled feathers. She has much to learn from party colleagues Siviwe Gwarube and Haseena Ismail, whose equally candid approach was noticeably more deferential.

Against that backdrop, the Minister, his deputy Joe Phaahla, Health Department DG Precious Matsoso, deputy DG Anban Pillay, presidential adviser Olive Shisana, NHI office head Nicholas Crisp and other departmental officials fielded an avalanche of questions about the Bill and NHI in general from the DA, FF Plus MP Philippus van Staden and the EFF’s Naledi Chirwa – but did little to assuage their fears. Neither the model to be used in implementing NHI nor the mix of options available to fund it are cast in stone. However, conceding that government ‘will need to invest strongly’ in improving the standard of public healthcare services and facilities, Mkhize said that, where there is evidence of ‘neglect’ it ‘must be corrected’. ‘We are at such a low level of quality that we will have to fight hard to improve it,’ he told the committee, referring to NHI as a ‘vision’ and an opportunity to ‘up the game’. According to Pillay, the need for ‘robust’ monitoring and evaluation was simply confirmed by the pilot phase.

In the Deputy Minister’s view, while NHI promises to be a ‘disruptive intervention’ – especially for the 15% of citizens able to afford private healthcare – ‘fear of the unknown’ cannot be allowed to prevent government from moving forward with plans to honour not only its constitutional obligations but also binding international commitments. While Phaahla did not elaborate on the role of medical schemes under the NHI system and little was said on the issue, Pillay confirmed that it will be spelled out in regulations. References by Shisana to presidential health compact partnerships and by Crisp to the introduction of NHI as ‘a journey, not an event’ were vague – tending to point to a long road ahead, albeit with ample opportunities for public consultation. Funding proposals will be the focus of a separate draft money Bill.


26 August 2019

Finance Minister Tito Mboweni intends discussing the provincial ‘implications’ of the National Health Insurance (NHI) Bill with Health Minister Zweli Mkhize. This was confirmed by National Treasury on Friday in a media statement following last week’s budget council meeting, reports Pam Saxby for Legalbrief Policy Watch. Established in terms of the 1997 Intergovernmental Fiscal Relations Act, the council comprises the Finance Minister and provincial executive committee members responsible for finance. Among other things – ‘while broadly supporting the objective of universal healthcare’ – the meeting noted the potentially ‘substantial impact’ of NHI on intergovernmental fiscal relations, the need for provincial participation in all ‘processes’ related to the Bill, and the importance of introducing NHI ‘in a phased manner’.

Given the constitutionally enshrined role of provincial governments in organising local healthcare services, concerns have been raised in certain quarters about the centralisation of health functions under NHI. Having sought an ‘urgent legal opinion’ on the matter, the DA may well have been behind National Assembly Health Committee chair Sibongiseni Dhlomo’s request for a briefing on the Bill’s constitutionality from representatives of the Office of the State Law Adviser. A committee press release announcing the move tends to suggest that the briefing will precede any formal deliberations on the Bill.


14 August 2019

The controversial National Health Insurance (NHI) Bill may well be subjected to an ‘extensive public consultation process’ during its passage through Parliament, but remarks made last week by National Assembly Health Committee chair Sibongiseni Dhlomo tend to point to a fundamental lack of understanding of the issues on the part of ruling party MPs, notes Pam Saxby for Legalbrief Policy Watch. According to a committee media statement welcoming the Bill’s introduction in Parliament, Dhlomo has yet to be persuaded that ‘fixing clinics, rebuilding hospitals, employing adequate staff and getting ambulances and everything else’ required is necessary. ‘We are not aware of any country in the world that completed everything else before it started with NHI,’ he is reported to have said.

As a section 76 Bill affecting the provinces, the proposed new piece of legislation will be the focus of parliamentary hearings conducted not only by the committee and its NCOP counterpart, but also by each of the provincial legislatures. That said, it seeks only to establish an NHI fund and related governance structures. While the Bill includes clauses painting a picture of the system envisaged and how it might be financed in healthier economic circumstances, these details will need to be teased out in separate legislation. This is likely to include amendments to the 1998 Medical Schemes Act, possibly building on proposals released in June last year for comment. Any additional taxes will need to be the focus of a money Bill and subjected to rigorous public and stakeholder consultations.


10 August 2019

Once in force, the National Health Insurance Bill tabled last week in Parliament is expected to facilitate universal access to ‘needed health care that is of sufficient quality to be effective’ – and ‘financial protection’ from its costs, reports Pam Saxby for Legalbrief Policy Watch. This is according to a memorandum on the Bill’s objects. However, in expanding on this, clauses 4, 5 and 7 of the Bill (respectively dealing with population coverage, user registration and health care services coverage) point to distinct limitations. Together, sub-clauses 4(4), 5(1) and 7(2)(e) make it very clear that only public and private health care facilities accredited over time by the fund will be available to registered fund users. Registration will not be compulsory. In addition, sub-clause 7(2)(e) requires the fund to ‘enter into contracts with accredited health care service providers and health establishments at primary health care and hospital level based on the health needs of users and in accordance with referral pathways’. This tends to suggest that private health care practitioners and facilities will be able to choose whether to contract in or out of the NHI system – at least at this stage of the process.

Regarding the role of medical schemes, clause 33 implies that – in the context of sub-clauses 4(4), 5(1) and 7(2)(e) – ‘once NHI has been fully implemented’ registered fund users who are also members of medical schemes will only be eligible for ‘complementary cover’ for ‘services not reimbursable by the fund’. Furthermore, sub-clause 39(1) clearly states that health care service providers and health establishments accredited by the fund will be required to deliver ‘services at the appropriate level of care to users who are in need and entitled to health care service benefits that have been purchased by the fund on their behalf’. This is noting that, according to sub-clause 57(1)(b), NHI ‘must be gradually phased in using a progressive and programmatic approach based on financial resource availability’. According to the memorandum on the Bill’s objects, ‘in a favourable economic environment’, ‘new taxation options’ for the fund will be considered. Meanwhile, it will depend on ‘some’ conditional grants being shifted from the Department of Health – as well as ‘some or all’ monies for ‘personal health care services’ traditionally factored into the provincial equitable share formula.

The fund’s ‘chief source of income’ (clause 49) will be money appropriated by Parliament from the fiscus in accordance with the principle of ‘social solidarity’. This is defined as ‘financial risk pooling to enable cross-subsidisation between … young and … old, rich and … poor, … healthy and sick’. With that in mind, sub-clause 49(2) should probably be interpreted as listing various options that could eventually be considered as elements of a combined revenue source. The 2015 NHI White Paper suggests as much. Therefore, an assumption on the part of some commentators that all listed options will automatically be factored into the mix could well be misplaced. As Legalbrief Today reported when the White Paper was published (and later, when the draft NHI Bill was released for comment), the elements of the combined revenue source are still up for discussion. Writing for Moneyweb, Bowmans tax partner Aneria Bouwer appears to agree. They are likely to include funds shifted from ‘the provincial equitable share and conditional grants’. However, references in the sub-clause to the ‘reallocation of funding for medical scheme tax credits’, ‘employer and employee’ payroll tax and a ‘surcharge on personal income tax’ suggest possible options at this stage. There may well be more proposed during the parliamentary and provincial legislature public hearings process.


9 August 2019

The National Health Insurance (NHI) Bill tabled in Parliament today seeks to provide South Africans with ‘access to needed health care that is of sufficient quality to be effective’, as well as ‘financial protection’ from its costs. According to a memorandum on the Bill’s objects, this is the aim of universal health coverage – as spelled out in the 2015 NHI White Paper. To that end, the Bill provides for the establishment of an NHI fund, setting out its powers, functions and governance structures, reports Pam Saxby for Legalbrief Policy Watch.

The Bill proposes that – using ‘some’ conditional grants shifted from the Department of Health to the fund as well as ‘some or all’ monies for ‘personal health care services’ traditionally factored into the provincial equitable share formula – the fund will purchase health care services for all registered users. Reference is made specifically to moving the national tertiary services grant and the HIV/AIDS and TB grant from the Department of Health into the fund.

In addition, the fund’s executive authority ‘will bid for funds through the main budget as part of the budget process’. This is noting that, ‘in a favourable economic environment’, ‘new taxation options for the fund’ will be considered and could include either ‘a surcharge on income tax’ or ‘a small payroll tax’. Against that backdrop, it is envisaged that, over time, the fund will ‘expand coverage using certified and accredited public and private sector health facilities’.

In this regard, the memorandum refers to implementing ‘reforms’ in six phases, the first of which is apparently already a work in progress. Its focus is to improve ‘the quality of the health system by … certifying … health facilities to ensure (that) they meet the requirements of the Office of Health Standards Compliance’. The final phase will focus on expanding coverage to accommodate ‘maximum projected utilisation rates’ – and ‘gradually increasing the range of services to which there is a benefit entitlement’.

While the memorandum notes ‘legitimate’ concerns about ‘the affordability and sustainability of NHI’, it offers the assurance that ‘the nature of the proposed system’ and ‘the checks and balances that will be put in place’ will ‘limit unnecessary expenditure increases for supply-side as well as demand-side management’. The success or failure of NHI will be determined largely by the extent to which ‘high quality primary health care services’ ensure that ‘the majority of health problems’ are ‘diagnosed and treated at this level’.


27 July 2019

An explanatory summary of the National Health Insurance (NHI) Bill was gazetted on Friday in anticipation of its being tabled in Parliament, which is in recess until 20 August. Since new Bills tend not to be made available before being formally introduced in the National Assembly, there is no telling when this important piece of legislation will be released, notes Pam Saxby for Legalbrief Policy Watch. However, according to the summary, once in force it will establish a national health insurance fund; prescribe its powers, functions and governance structures; provide ‘a framework for the strategic purchasing of health care services by the fund on behalf of users; and ‘create mechanisms’ for the ‘equitable, effective and efficient’ utilisation of the fund’s resources. The Bill also seeks to ‘preclude or limit undesirable, unethical and unlawful practices in relation to the fund and its users’. These objectives are underpinned by government’s commitment to facilitating ‘universal access to quality health care services’, in line with section 27 of the Constitution.

A media statement on the Cabinet meeting at which the Bill was approved for tabling in Parliament promised that it will be subjected to a ‘rigorous parliamentary process’. This will give NHI critics the opportunity to express their concerns – among other things about government’s capacity to manage an NHI system and fund given the numerous ‘challenges’ associated with financial resources management across the public sector. Deputy President David Mabuza alluded in these in his address to delegates at the presidential health summit last October, when government and its social partners agreed to develop the health compact signed on Thursday. Last week, deputy DG for NHI, Anban Pillay, told Business Day that information on revenue for the funds will be provided in a ‘financing paper’ being prepared by National Treasury, which ‘is likely to be published at about the time’ the National Assembly’s Health Committee schedules public hearings on the Bill.

According to President Cyril Ramaphosa, the health compact ‘binds’ government, organised business, organised labour and other stakeholders ‘as a collective’ to ‘overcoming the challenges’ in SA’s public health care system. Speaking at the signing ceremony, the President made two remarks of considerable significance to the success of NHI’s introduction and implementation. The labour movement is apparently ‘committed to supporting the Department of Health by reviewing policies around remuneration for work outside the public service, to limit its impact on service delivery’. In addition, parties to the compact are committed to executing their responsibilities ‘in an ethical manner’ and to ensuring that ‘self-interest’ does not ‘derail’ the compact or ‘detract’ from the process of achieving its mission – which is to ‘reform healthcare … (and) make it better suited to the needs of an ever-growing population’.

During last week’s conversation with Business Day, Pillay said the Bill ‘will not contain details about the benefits (to be) covered … or those … medical schemes will be permitted to cover’, as Legalbrief Today reported at the time. While medical schemes will remain voluntary, they will be ‘restricted to providing complementary cover, in line with the policy position set out in the NHI White Paper’. Pillay appears not to have mentioned a draft Medical Schemes Amendment Bill released over a year ago for comment. Among other things, it provided for a ‘relationship’ between the NHI fund and the Council for Medical Schemes that included ‘support’ for the fund in fulfilling its objectives by way of sharing ‘available resources, expertise and processes’. In December, a senior official is reported to have said the department is ‘waiting for the Competition Commission’s health market inquiry to be completed’ before finalising the Bill (Business Day). The commission is expected to release its report on 30 September.


17July 2019

While the yet-to-be-tabled National Health Insurance (NHI) Bill is being processed in Parliament, ‘the structure of the national Department of Health will be reorganised’ and a dedicated NHI implementation unit established. The official version of Health Minister Zweli Mkhize’s budget vote speech last week describes the unit as an ‘embryo’ NHI fund and staff capacity-building platform, reports Pam Saxby for Legalbrief Policy Watch. Unfortunately, the speech was only published on the department’s website well after close of business on Monday, which may explain why the mainstream media overlooked so much valuable information provided by the Minister on government plans for preparing public health facilities to implement the long-awaited system. As has been widely reported, Mkhize provided no information on the primary source of revenue for NHI. However, he did refer to a ‘social compact’ on building a health system fit for its implementation. It was one of the outcomes of last October’s presidential health summit.

Mkhize also confirmed that, as the ‘backbone’ of a national electronic health patient record system, a registration system has been developed on which the details of ‘all South Africans’ are expected to have been captured by the end of the 2019/20 financial year. According to the Minister, nearly 43m users have already been registered. With the aim of improving management and governance, within the ‘next six months’ the organograms of all state-run health facilities are expected to have been reviewed and the system of delegating responsibility ‘adjusted to ensure appropriate levels of authority for effective decision making’. In addition, EU funding and bilateral agreements with Japan, the UK and France will be used to ‘build the capacity of managers to implement NHI’. In this regard, Mkhize mentioned ‘twinning arrangements’ also involving ‘academic institutions’.

Conceding that ‘it will be impossible to convince the public about the virtues of NHI unless the health infrastructure is rebuilt as a matter of urgent priority’, the Minister said a ‘team of experts in finance and health … infrastructure’ has been established ‘to seek creative financing mechanisms’ and ‘alternative’ delivery models. According to Mkhize, the team’s ‘clear directive’ is to ‘accelerate the refurbishment of all old hospitals and clinics and deliver new ones within five-to-seven years’. While a ‘significant amount’ has been budgeted for this, in the Minister’s view it is ‘grossly inadequate’. Nevertheless, the ‘entire’ infrastructure build programme has been costed – informed by an audit of all public health facilities. ‘Preliminary indications are that … (it) is feasible,’ the Minister said.

Writing for the Daily Maverick (and drawing from the department’s 2019/20 annual performance plan) the Bhekisisa Centre for Health Journalism’s Laura Gonzalez reported that, initially, it is envisaged that, from 2021, the fund itself will be used to purchase a ‘basic package of services’ from both private and public healthcare providers. Over time, a more ‘comprehensive’ package will be made available from regional and tertiary hospitals ‘in selected districts’. According to Gonzalez, these services could form the building blocks of ‘a basic medical aid option’ along the lines of one apparently being considered by the Competition Commission ‘as part of its four-year investigation into the private healthcare sector’.


12 July 2019

A National Health Insurance (NHI) Bill incorporating input on a draft released in June 2018 for comment is ready to be tabled in the National Assembly and ‘subjected to another rigorous parliamentary process’, reports Pam Saxby for Legalbrief Policy Watch. Approved by Cabinet on Wednesday, the Bill provides for the establishment of an NHI fund reporting to the Minister of Health. According to a media statement on the outcome of Wednesday’s Cabinet meeting, the fund will operate as an autonomous public institution to be administered in keeping with the requirements of the 1999 Public Finance Management Act for Schedule 3A national entities. In this regard, among other things the Act deals with banking, cash management and investment, annual budgets and audited financial statements.

In his most recent State of the Nation Address President Cyril Ramaphosa said the process of revising a ‘detailed plan’ for the Bill’s implementation is ‘far advanced’. It includes ‘accelerating quality-of-care initiatives in public facilities’, ‘building human resource capacity’, establishing an ‘NHI fund structure’ and ‘costing’ its administration. Given the poor state of the public health sector, this could take decades to accomplish; it will require attitude change and vast sums of money. Yet according to yesterday’s post-Cabinet meeting statement, once the parliamentary process is complete the plan will be amended to give effect to the Bill’s transitional arrangements for ‘rolling out the NHI in phases’ – tending to create an expectation of imminent improvements to the quality of healthcare for ordinary South Africans.

Addressing delegates at the presidential health summit last October, Deputy President David Mabuza alluded to the ‘challenges’ associated with financial resources management across the public sector – emphasising the importance of ‘value for money in purchasing health services’. How government deals with this and widespread concerns about the fund’s primary source of revenue (Business Day) will determine whether NHI succeeds or becomes yet another unfulfilled promise and costly mistake.