Letter: NHI a bonzanza for bureaucrats, a gift for looters - Sunday Times

1 September 2019 - Di McIntyre’s comments in support of the National Health Insurance (NHI) system (‘We can build NHI, and we should’, Sunday Times, 25 August) are a mix of snide insults to the ‘privileged’, false claims about NHI benefits and costs, and blithe assumptions about how ‘vigilance’ can safeguard the new system from corruption. Her assertions are also misguided.

Di McIntyre’s comments in support of the National Health Insurance (NHI) system (‘We can build NHI, and we should’, Sunday Times, 25 August) are a mix of snide insults to the ‘privileged’, false claims about NHI benefits and costs, and blithe assumptions about how ‘vigilance’ can safeguard the new system from corruption. Her assertions are also misguided. On the contrary:

The NHI is not needed to achieve universal health coverage (UHC). Instead, this requires much more efficiency and accountability in public healthcare. It also needs increased access to private care, to be achieved by allowing low-cost medical schemes and empowering poor households to access these via tax-funded health vouchers.

Major additional taxes (at least a 3% payroll tax, a 3% surcharge on income tax, and a 20% VAT rate) will be required at the start, and are likely to increase as the population expands. Medical scheme members may pay just as much in increased taxes as they do now for their monthly contributions, while the benefits they receive are likely to be less. In addition, high contributions could instead be reduced by allowing low-cost medical schemes and introducing compulsory enrolment for all formal employees, which would spread risks and further bring down contributions.

There will be no major cost savings from ‘strategic’ NHI purchasing. Instead, comprehensive state controls will rule out competition and innovation, while the purchase of every item needed for 59 million (and more) South Africans will be subject to escalating BEE requirements. Yet already these rules taint some 40% of state procurement with fraud and inflated prices. Increasingly, they also spawn violence and intimidation by those demanding ‘their’ 30% ‘share’ of sub-contracts.

Tens of thousands of deployed cadres will be needed to implement all the NHI’s controls, even with a simplified payment structure for health professionals (lump sums instead of the fee-for-service system). Many bureaucrats will be needed to certify and accredit all health facilities and professionals every five years. Many more cadres will be required for the annual setting, evaluation, and resetting of NHI controls over medicines, products, and technologies and their recommended prices. More still will be needed to staff NHI sub-units, advisory committees, and governance structures, along with health management offices in all municipal districts and primary contracting units in all sub-districts.

The NHI is likely to fuel an exodus of health professionals and others with scarce skills. This will lengthen treatment waiting times, while crippling growth, reducing tax revenues, and constraining state spending in every sphere. Instead of benefiting from the NHI, the poor will suffer the most from the resulting malaise.

In addition, the ‘vigilance’ for which McIntyre calls has not prevented a massive waste and/or looting of tax revenues through cadre deployment, BEE procurement, and a narrower ‘Zupta’ type of state capture. ‘Collapsing’ all medical schemes into ‘a single state-run medical aid’ (as former health  minister Dr Aaron Motsoaledi recommends) – and then giving the state the power to control every aspect of healthcare – will simply expand the opportunities for capturing and looting all the NHI’s new entities.

To endorse the NHI proposal, thus, is to confirm that the key lessons of ‘how the state was allowed to be captured’ (to cite McIntyre’s words) have yet to be learnt.

Dr Anthea Jeffery

Head of Policy Research, IRR

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