Newspaper headlines that scream of horrors at state hospitals strike fear in the hearts of South Africa’s poor and validate decisions made by those middle-class folk who have decided to forego luxuries in order to afford a medical aid.

The less than 18% of citizens fortunate enough to belong to a private medical scheme pay a huge portion of their income for this privilege, while those who rely on the state for their health are at the mercy of under-resourced and understaffed hospitals and clinics.

With World AIDS Day on 1 December, the nation has again had to acknowledge the shameful fact that our HIV/Aids statistics are among the highest in the world, and take stock of the huge burden this places not only on public health but on business as well.

Access to healthcare is a constitutionally recognised right under Section 27 of the South African Constitution and, in theory, this right is upheld with free primary healthcare available to citizens.

However, a report released by the South African Human Rights Commission early in 2009 found that the public healthcare system was in a “lamentable state” because of poor policy implementation and staff shortages, among other factors.

Clearly, the government is right to focus its urgent attention on our country’s ailing healthcare, but is National Health Insurance (NHI) – as unveiled in a discussion document at the ANC’s national general council recently – the way to go?

Fidel Hadebe, director: Media Liaison and Public Information for the Department of Health, describes the proposal as a health-financing system in which resources are put into a common pot for equitable use by all.

“It promotes equal access to healthcare, regardless of socio-economic standing,” he says, adding that policy development around NHI is currently being done by the Ministerial Advisory Committee (MAC).

“As soon as Cabinet approves the policy document, it will be released for public consultation and comments by all sectors of society.”

Sceptics have slammed the proposal as unworkable and unrealistic, while the more cautionary have adopted a wait-and-see approach, saying it contains too few details to make an informed evaluation.

Others say the problems in the existing public health offerings should first be addressed.

“We desperately need to resolve our public healthcare crisis. However, if we do not address the systematic failures, no amount of money will save our public health system,” says the Democratic Alliance’s Shadow Minister of Health, Mike Waters.

“Addressing these failures, though, does not necessarily require the implementation of a proposal like NHI. Many of them stem from the shortage of adequate staff in our hospitals, which is partly because we have inexplicable constraints on the training of medical professionals, including a prohibition on training doctors in the private sector and the closure of nursing colleges by the ANC government.

“There are major problems at ground level with the capacity and efficiency of hospitals, and their managers in particular. The problem is not necessarily related to funding; if every hospital was staffed with a well-trained, experienced and committed [chief executive officer], then we could make enormous inroads into resolving our major public healthcare problems,” he says.

“All too often, as was the case in the Frere Hospital scandal, it is the appointment of hospital managers based on patronage rather than fitness for purpose that is holding back the provision of quality healthcare services in public institutions.”

Waters adds that bureaucratic and outdated hospital management systems need to be changed to give hospital management the authority to do their jobs. Basic functions such as making staff appointments need to involve far less red tape.

Commenting on the proposal, he states that until it is tabled as legislation before Parliament, it should be viewed only as a plan.

”Having said that, it is necessary to point out that the ANC has placed the cart before the horse. Any major overhaul of the public health system, especially of the magnitude mooted by the NHI, should at the very least be tested for its feasibility – especially in terms of overall costs – before anything can be agreed to,” Waters adds.

All the challenges facing the public health sector are being addressed, counters Hadebe.

“We have a 10-Point Programme, which is basically a road map toward improving healthcare in our country. Over and above this, a process is under way to establish an independent office of standards compliance, which will enforce a set of core standards in all our public health facilities.”

Waters believes this is long overdue, saying that a standards compliance office should have been established in 2004.

“Currently, there is no annual inspection of public hospitals,” he says, adding that national minimum standards for infection control are sorely lacking.

Thabo Koole, communications manager for the Ecumenical Service for Socio-Economic Transformation, says the NHI ideals are noble, particularly the proposed plan to distribute financial and human resources equitably between the public and private health sectors.

He is adamant that the current public healthcare system is largely ineffective and does not cater for the poorest of the poor communities.

“It is without dedicated and qualified health practitioners to ensure that every citizen has access to optimal healthcare, as is enshrined in our Constitution. The free health services offered at public primary healthcare clinics and community healthcare centres have always been under-resourced,” Koole expands.

“HIV/Aids and the indecision over its treatment has been a major hindrance to Government realising its public healthcare aims. Higher earners and the middle class who happen to be members of medical aids enjoy the highly specialised health services available in the private sector, to the exclusion of the poor.

“NHI is a step in the right direction and would go a long way in making quality healthcare more accessible to the poor. However, it is difficult to comment further on NHI, since it is still a discussion paper. It is incumbent on Government to publicise a Green Paper to allow further engagement and input from all stakeholders,” he says.

South African Medical Association (Sama) chairperson Dr Norman Mabasa says the NHI proposal is good in principle, but there is currently not enough information available to make informed opinions.

Although Sama is in favour of universal access to healthcare, he is concerned that people who currently enjoy free basic healthcare or pay only a small uniform administration fee may resent that they now have to contribute toward NHI in one form or another and, in effect, end up paying for what they previously enjoyed for free.

Dr Mabasa further questions what currently makes healthcare inaccessible to the majority of South Africans: “Is it an inability to pay, or the inability to get what you need from the existing public facilities?

“The current model, already run on NHI principles, should be improved to make it more attractive to both the private and public sectors so that people want to make use of the services offered and are willing to pay for them.”

With it being an acknowledged fact that the public health sector requires urgent improvement, Dr Mabasa says Sama would enter into “robust engagement” with the government about NHI.

Not only are there concerns around what is being proposed, but the cost implications thereof as well.

Economist Mike Schüssler agrees that countries with successful NHI systems generally have high net incomes, low unemployment and large and stable tax bases, which are not features of South Africa.

“Only 41% of adults are employed in one form or another – the lowest number for any country outside of a war zone. And remember that the guy who does a ‘piece job’ is included in that 41%.

“Added to that, we have only 5.9 million registered taxpayers, yet around 50 million people in the country. So we have a very small tax base.

“Simply put, we cannot afford NHI,” he says, adding that even rich countries such as Japan, which has a universal health system, expects patients to pay 30% of their medical costs.

“What we want is a position whereby we have more people employed before we focus on NHI

“Right now, a lot of it is wishful thinking.”

Schüssler is concerned that the impact of increased tax to fund NHI could be a severe blow to the emerging black middle class, and warns that more members of the medical industry and other professionals could decide to leave South Africa. He explains that their skills are in high demand worldwide and they may choose not to live in a country that places a huge tax burden on them.

“We need to first get the ratios correct. One taxpayer for every three people would be workable. We need to aggressively grow the number of taxpayers, which means we need to grow jobs or get our population to come down.

“I would suggest that we spend the next two decades not looking at NHI and similar issues, but at growing employment opportunities,” Schüssler says.

Waters is worried that should NHI become a reality, it would affect poorer South Africans.

“The ANC has mooted raising VAT to fund NHI – a move that would disproportionately impact upon the poorest of South Africans because of the regressive nature of that tax.

“The ANC also says it is considering raising funds through payroll taxes, which could push up unemployment. Thus, the real cost here is on job creation and societal welfare,” he says.

All tax-paying South Africans will fund NHI, confirms Hadebe. “As it is, the majority of South Africans are paying some form of tax in one way or the other. NHI is not aimed at punishing the rich!”

While Hadebe says the MAC, dealing with implementing NHI, is studying various funding options internationally, Schüssler is of the opinion that whatever the outcome, another revenue collection service should not be introduced, as this would increase the cost of collection. “If this goes ahead, I would like to see SARS [South African Revenue Service] as the responsible agency.”

Dr Zweli Mkhize, premier of KwaZulu-Natal and chairperson of the ANC sub-committee on Health, says NHI will not impact upon private medical aid schemes and their members, who can retain their individual plans.

Healthcare providers will be given the choice of whether or not to participate in the system, and public and private providers will probably be contracted by the NHI agency at uniform reimbursement levels to service NHI patients.

“However,” says Waters, “given that the proposal indicates that individuals who currently have medical aid cover will have to contribute to NHI through higher VAT and payroll taxes, it will obviously have an impact on people’s ability to afford private medical cover.”

University of Cape Town Health Economics Professor Di McIntyre agrees that NHI would affect the medical schemes. “How it impacts our medical schemes depends on the changes. If really good services are provided under a universal system, it’s quite likely that some of the current medical scheme members will decide to opt out.”

Dr Mabasa agrees that NHI could place strain on current medical aid schemes, particularly if members lose their current tax rebate. He believes, however, that NHI should be able to cater for those who want private health insurance as well, allowing them to insure themselves for more if they want to.

Medical aids may have to adapt to meet the changing medical landscape.

Although Hadebe says it is not known at this stage how much NHI will cost to implement, given the preparatory work being done and consideration of various funding models, previous statements indicate it is expected to cost R128 billion in its first year, escalating to R376bn in 2025.

Despite its misgivings, the DA supports mandatory contributions toward medical cover for people who are employed because “everybody has a responsibility to take charge of their own health, and because this would help to alleviate the pressure on the public sector.”

The ANC plans to implement NHI from 2012, over a 14-year period, promising a consultative and phased-in approach.

This has been welcomed by hospital groups and medical aid schemes, most of which say they wish to contribute positively to the development of a model that will change healthcare in South Africa for the better.

Cathy Grosvenor