Less than two years after President Cyril Ramaphosa signed the National Health Insurance Act (NHI) into law in May 2024, South Africa’s most ambitious health reform since the end of apartheid is effectively frozen. It’s caught between a government determined to push it through and a growing chorus of opponents who say it is unworkable, unaffordable and unconstitutional.
The Act proposes a centrally controlled state fund that would buy health services from both public and private providers. It will do away with the current form of private medical aids, which service around 15% of South Africans, while promising better care for the 85% who depend on public health services.
To finance that fund, it would rely on taxes and, essentially, on redirecting medical aid premiums, because the Act makes it illegal for private medical aids to cover the same services as the NHI.
But almost as soon as Ramaphosa put pen to paper, the lawsuits started.
A dozen court cases are underway
At least 12 court cases are challenging the Act’s constitutionality, with claims including procedural flaws and inadequate public participation, an unrealistic financing structure, and blocking access to treatment for asylum seekers and undocumented migrants. A South African case study in Global Health Watch, a Lancet-published analysis of global health reform released in January, raised similar concerns.
At the end of February, Ramaphosa announced that he would not promulgate any part of the Act until the Constitutional Court rules in May on two applications related to the public participation process. This puts a halt to roll-out plans for the NHI. Also sitting before the Concourt is his appeal against an earlier ruling requiring him to show he took public submissions seriously before signing.
Concourt rulings awaited
In an agreement between the president, Health Minister Aaron Motsoaledi and those involved in other major NHI court challenges, those applications have also been temporarily halted until the May rulings.
That includes the South African Medical Association’s (Sama) High Court challenge, along with action by Solidarity, the Hospital Association of South Africa, the Health Funders Association (HFA), the South African Private Practitioners Forum, and Sakeliga.
However, Business Day reported on Thursday that Motsoaledi told MPs in Parliament that at least some NHI planning preparations are continuing.
Motsoaledi defends single-fund model
Motsoaledi has defended the single-fund model, arguing that one central pot is easier to protect from corruption than nine provincial budgets. But critics, including groups like SECTION27 and the HFA, say that is precisely the problem: the Act gives the minister too much power, allowing him to hire and fire board and committee members largely as he sees fit, with too few independent checks in place.
In a recent episode of Health Beat, Bhekisisa’s TV programme, Motsoaledi said he is open to Parliament voting for changes and acknowledged that negotiating with organisations involved in court action would be preferable to waiting for judgments. “But that’s in an ideal world,” he says, “and we don’t live in an ideal world.”
State of the current public health system
University of Cape Town health economist Susan Cleary talked with Mia Malan about what is and isn’t working with the current public health system and whether the NHI is, in fact, a sensible way forward. This is an edited version of the conversation.
Mia Malan (MM): The NHI is stuck in slow motion. What should the government focus on right now?
Susan Cleary (SC): The idea of universal health coverage has been on our agenda since democracy, and that’s a good thing. But we already have the start of a universal health system — our public sector covers around 80% of the population. The obvious thing to do is continue to strengthen that system, which will be the backbone of any future system anyway. There’s plenty to do in the interim.
What will NHI bring?
MM: What’s the difference between our current model and what the NHI proposes?
SC: In the current model, staff providing services in facilities are salaried government employees. Under the NHI, government will be able to contract services from independent entities as well – private GP practices, private hospitals. That private involvement will be much more clearly allowable and encouraged. There are potentially big benefits for private GPs and private hospital groups.
MM: What’s the advantage, or disadvantage, of one large central fund?
SC: The advantage is purchasing power – the ability to negotiate good prices and contracts. Our current public sector already has that, just for about 80% of the population. The NHI would extend it to 100%. The disadvantage is that if that single pot of money isn’t managed well, there will be no alternative. Right now, different provincial departments of health and the private sector all provide options. Under the NHI, those largely disappear.
Preventing corruption
MM: Are there enough protections against corruption in the Act?
SC: There are real concerns. The minister has a lot of authority to appoint the board chair, the CEO of the fund and members of the appeals tribunal. There aren’t sufficient checks and balances. What people would like to see is a greater separation between the political and administrative spheres, and for Parliament to play a bigger role in approving key positions, rather than it resting with the minister and cabinet.
MM: How should South Africans think about what the NHI can actually afford to provide?
SC: If the NHI offers services similar to the current public sector, roughly R5,000 per capita per year, extending that from 80% to 100% of the population is probably broadly affordable.
But if it’s meant to approximate the private sector at around R15’000 per capita, we’re looking at close to 30% of our GDP on healthcare. That’s simply not feasible. The honest answer is we don’t know what it will cost, because we still don’t have a defined benefits package. Until we know exactly which services will be covered, we can’t cost it.
MM: So private sector users would get less, public sector users would get something better – somewhere in the middle?
SC: Yes, with a lot of complexity hiding behind that. But broadly, yes.
What is needed to get the NHI working?
MM: What needs to be fixed before the NHI can work?
SC: Two things stand out. First, electronic patient information systems. We’ve seen quality of care improve significantly in the public healthcare system in the Western Cape since it was introduced. That needs to happen nationally, and it doesn’t require an NHI – it should have been done a decade ago. We need such a system in the private healthcare system, too. Second, priority setting: getting clear and honest about the package of services the public sector can actually afford to deliver equitably. Right now we’re not clear about that, and it’s likely that what’s in our standard treatment guidelines isn’t affordable, otherwise, we wouldn’t be seeing the drug stockouts and patchy quality we do.
MM: Is it realistic to fund the NHI through taxes with a 30% unemployment rate?
SC: Absorbing 100% of the population into a single health system at our current rate of economic growth, and making it better than the current public sector, is very ambitious. Many countries making good progress on universal health coverage have plural systems: public and private sectors or different social health insurance models coexisting.
Is a gradual process preferential?
MM: What’s the most evidence-based pathway – big bang or stages?
SC: Definitely stages. We should be careful about losing the strengths of our current public sector. Our model is actually similar in some ways to the United Kingdom’s National Health Service, and I don’t think we’ve adequately justified replacing it with something more sophisticated and harder to manage, especially given that governance is not our strong point. A unitary system is not required for universal health coverage. We already score relatively well on universal health coverage metrics. We shouldn’t assume everything is terrible.
MM: Where do we perform well and where do we fall short?
SC: Universal health coverage is about having access to the services – services that don’t expose you to financial catastrophe. That means how much you have to pay when you go to get care. Obviously you have to pay, but if you’re paying upfront, as a prepayment, then you have what’s called financial protection. We have very good financial protection in the public sector. For those who have private health insurance, financial protection is provided through that insurance mechanism.
Where we do less well is in terms of quality. We have pockets of excellence, and then areas where quality is quite poor; we also don’t do that well in terms of the overall package provided to our population. What worries us is that we have this inequity between the public and private sector, but that is not part of the definition of universal health coverage.
Future of the private sector
MM: What about the private sector, is it ready for a future NHI?
SC: There’s a real risk that the private sector is being neglected while we debate the NHI. It’s becoming increasingly expensive and offering increasingly poor value. The Healthcare Market Inquiry produced a widely supported package of reforms – reforms that many private sector players actually want. Pushing those forward now would keep the private sector viable and provide a stronger foundation for any future universal system. Instead, the reform agenda has been put on hold, waiting for the NHI. And that, I think, is a serious mistake.
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This story is based on an interview broadcast on Health Beat, Bhekisisa’s TV programme, in March. Additional support from the Health Beat team including Jessica Pitchford, Albert Tibane, Tim Wege and Jeannine Snyman
This story was produced by the Bhekisisa Centre for Health Journalism. Sign up for the newsletter.
