No need for private sector to worry about NHI – Ramaphosa

President Cyril Ramaphosa has dismissed claims that the National Health Insurance (NHI) will signal the end of private healthcare.

“To the contrary, the NHI aims to use the respective strengths and capabilities of both the private and public health sectors to build a single, quality health system for all,” Ramaphosa wrote on Monday in his weekly newsletter.

He explained that the NHI fund would procure services from accredited public and private service providers for every person in need of healthcare.

“The NHI will be a lifeline for millions of poor South Africans whose resources will be freed up for other essential needs.

“It will also alleviate the burden on those who are increasingly paying more in medical aid premiums for increasingly fewer services.”

Current system is unsustainable

While there may be different views on how NHI will be progressively implemented, the reality is that the current healthcare system is unsustainable.

Access to quality, decent healthcare should not depend on one’s ability to pay, he said, adding that the “current situation does not serve the poor, does not serve the middle class, and does not serve the country”. 

However, with careful planning, effective oversight and monitoring, and the strategic allocation of resources, the country’s commander-in-chief believes that South Africa can achieve universal health coverage. 

“Working together in partnership, as both the public and private sectors, we can make the dream of quality healthcare for all a reality,” he said.

This is as the country edges closer to affordable, quality healthcare for all after the president signed the NHI Bill into law last week. 

The president said: “For many years, we have had parallel healthcare systems operating in our country.

Misallocation of resources

“The majority of the population, 84%, uses public health facilities, while 16% are covered by medical schemes, enabling them to access private healthcare facilities.

“A small percentage of people use both.” 

According to Ramaphosa, this has exacerbated inequality by making it so that one’s ability to pay determines the calibre of the healthcare they receive.

“This runs contrary to our aspiration to be a society that is just and equal.”

While achieving social justice is a key objective of NHI, he stated that efficiency and better resource allocation are equally important. 

“We have said that the challenge in implementing NHI lies not in the lack of funds but in the misallocation of resources that currently favour the private health sector at the expense of public health needs.

“There is a misconception that the private healthcare sector operates and is funded completely independently of the government.”

Billions paid in subsidies

He did, however, claim that the state funds the training of medical professionals who work in both the public and private sectors.

Secondly, he added, the government pays billions of rands annually in subsidies for employees who are members of various public sector medical aid schemes.

“Thirdly, taxpayers claim tax rebates for medical aid expenses amounting to approximately R37-billion. This is the money the state should earn in taxes, which it foregoes to subsidise private healthcare.

“We therefore have a situation where the state both directly and indirectly helps to fund a private healthcare sector that serves only a minority of society.” 

In addition, he said access to private healthcare through medical aid is also costly for users. 

“It is said that without the tax rebate, private healthcare would not be affordable to the majority of users.

“Medical aid contributions are increasing faster than inflation. At the same time, benefits are being reduced.” 

President praises public sector

The president cited the 2016 Healthcare Market Inquiry, which found that private healthcare services and medical scheme coverage are frequently overused without clear improvements in health outcomes.

He said: “The resources that are spent both by the state and private individuals can, therefore, be more efficiently used to build a single, unitary healthcare system that serves all.”

According to Ramaphosa, the private health sector has world-class expertise and is a major source of domestic and foreign investment.

He also gave praise to the public sector, which also has a lot of centres of excellence and employs skilled and knowledgeable staff.


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