National Health Insurance

Understanding the NHI: What It Means for South Africa’s Healthcare System

The proposed National Health Insurance (NHI) represents one of the most significant shifts in South Africa’s healthcare landscape. As government plans move forward, stakeholders across are engaging with its potential impact and are engaged in legal challenges to the proposed legislation, on the grounds of constitutionality, rationality, and feasibility.

In the video below, from 46:06 you can watch the HASA presentation to the Parliamentary Portfolio Committee on the NHI, and in the Q&A, we set out the aims of the NHI and the grounds on which the private sector and other stakeholders are opposed to it. We encourage you to use both for valuable context on the implications and challenges of the NHI.

Frequently Asked Questions

1. What is the NHI?

The NHI is a public fund that the National Department of Health claims will purchase all healthcare services from accredited healthcare providers and suppliers for all South Africans and specified other groups of people. It is intended to be the single purchaser of the healthcare needs of all South Africans and will purchase these services from public and private practitioners and establishments.

2. Why does the Government claim we need the NHI?

South Africa’s healthcare system comprises both the private and public sectors, with notable access and quality differences between the two sectors. The Government believes that pooling all money for healthcare centrally and also redistributing resources will allow it to address this difference.

3. Briefly, how does the Government see it working?

People who require care will follow a treatment pathway that begins with entering the healthcare system through an accredited primary care practitioner. Depending on the health needs, this practitioner would then refer the patient to accredited clinics or nearby hospitals with no distinction between private and public hospitals. Patients will not be required to pay at the point of care if they follow this pathway and their clinical needs are covered by the NHI benefit package.

It is expected that the NHI Fund will pay for the healthcare received and that this Fund will consist of taxpayer contributions and possibly a special means of raising funds dedicated to healthcare that is paid by those who can afford to pay.

4. What services will the NHI cover?

This is not known. The Government has mentioned some considerations that would factor in to determining this, such as the need for comprehensive health services and also the need to consider budgetary constraints. The exact list of services is still to be finalised by the relevant NHI Fund structures.

5. Will the NHI replace private medical aid?

The NHI Act stipulates that private medical aid will only be allowed to cover services not provided by the NHI.

6. What is HASA’s position regarding the NHI?

HASA strongly supports the goal of providing accessible, high-quality, universal care for all South Africans. The association does not believe the NHI Fund, as currently planned, is affordable, achievable, and constitutional.

Affordability:
- The NHI is currently uncosted.
- Estimates for its implementation suggest that the tax increases required to fund the planned reforms will be unsustainable and unaffordable.
- South Africa also cannot afford to borrow the funds required.
Achievability
- The reform requires skills that the country has in short supply, particularly in scarce specialist nursing and various medical fields.
- Instead, the country faces a critical shortage of nursing skills and a global competition for specialist skills.
The NHI Act, faces a number of Constitutional challenges that will be heard in court challenges from a number of parties.

7. What other concerns have emerged from the private sector about the NHI?

Some of the main concerns raised in court papers relate to:

Uncertainty about NHI funding sources
Lack of clarity on benefits and provider roles
Potential curtailment of choice and autonomy
Concerns about governance and corruption control
Concern about centralisation of influence and power
Lack of necessary infrastructure and human resources

8. How will quality and accreditation be managed?

Only certified providers (facilities certified by the Office of Healthcare Standards Compliance) will be eligible for NHI Fund accreditation. Only a small fraction of existing public facilities would currently be certified by the OHSC and accredited by the NHI Fund.

9. Will private healthcare be destroyed by the NHI?

The Government is on record as saying private healthcare will not be destroyed. Under the NHI as it stands, medical aid schemes will shift to covering only services not covered by the NHI Fund. Service providers not contracted to the NHI or accredited by the fund will be excluded from its payment system. Prices and benefits offered will be determined by the NHI structures, but it is uncertain what factors will be considered in price determination processes.

10. Will medical scheme reserves be taken by the NHI?

No. Reserves belong to members, and the NHI Fund cannot appropriate them.

11. How will corruption be prevented?

The Fund requires annual audits by the Auditor-General. The Fund will be subject to the Public Finance Management Act (PFMA) and to the oversight of the Minister of Health and Parliament. The CEO is tasked with establishing a risk management and fraud prevention investigation unit within the national office of the NHI Fund. However, public concerns remain high given the country’s past failures with large public entities and recent history of corruption within healthcare. These concerns are particularly heightenedsince the proposed NHI fund will be the largest single pool of funds in the country and will potentially be responsible for paying for the healthcare services of the entire population of South Africa. It is unclear how specifically this fund will be protected when other funds, smaller in value, have experienced corruption.

12. When will NHI be fully implemented?

It is impossible to say when exactly, but Government officials are on record saying it will take at least 10-15 years. According to the Government, it will be phased in over several years (current roadmap: 2 phases running from 2023–2028), beginning with strengthening public infrastructure, piloting services for vulnerable groups, and building digital and administrative capacity. It is our view that any subsequent stage in implementing the reforms will occur only when agreed-upon signposts have been reached. We should not attempt to apply a timeline.

13. What alternate reforms could be implemented in place of the NHI to achieve universal healthcare?

Stakeholders have recommended:

Completing stalled private sector reforms (e.g., mandatory membership andrisk equalisation funds) to lower the costs of medical aid cover.
Numerous commissions, committees, and associations have proposed reverting to compulsory medical aid membership for the formally employed and their families to initiate better cross-subsidisation in medical aids, thereby lowering premiums for those who are members, and reducing the population dependent on the public sector. This would allow for the freeing up of funds for investment in the public sector, since a greater portion of the population will assume responsibility for funding their healthcare
Fixing public healthcare infrastructure and initiating a drive to overcome shortages in human resources and skilled medical staff
Building a more robust primary care system, particularly in rural areas
Finding ways for the public and private sectors to collaborate more widely and more often to deliver healthcare services to the entire population.
Strengthening public health sector governance and leadership to begin to eliminate corruption and prioritise the provision of quality healthcare for the most vulnerable populations.