National Health Insurance (NHI) Bill: public hearings day 19, with Deputy Minister

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10 September 2021
Chairperson: Dr K Jacobs (ANC)
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Meeting Summary

NHI: Tracking the bill through Parliament


In this virtual meeting, the Committee continued with public hearings on the National Health Insurance Bill. Three organisations presented oral submissions.

All the organisations welcomed initiatives to improve access to quality healthcare services and proposed a number of amendments to improve the Bill.

The Black Business Council said clarity was requested about the pricing of medicines, particularly how the setting of prices by the Office of Health Products Procurement would work, given the negotiation of prices by the Fund. It was suggested that the Bill did not delineate the relationship between the single exit price system, created by the Medicines and Related Substances Act 101 of 1965, and the procurement of medicines at the lowest possible price. Further clarity was needed in the Bill about the formulary and contracting. The Council suggested that a clearer framework was needed about the establishment and composition of the advisory committees, and various suggestions were made to this end.

In response to the suggestion that the Bill was silent about Broad Based Black Economic Empowerment, Members asked if the Council had read clause 28(7) of the Bill that made reference to other legislation to that end. Clarity was requested about the Council’s preferred/proposed pricing mechanism. A Member asked for clarity about what was meant by the need for ‘interdependence’ between the public and private sectors.

The Active Citizens Movement recommended that the Bill must amend the provisions defining a “user”, remove insensitive language such as “illegal foreigners”, and adopt a clear principle of non-discrimination in the application of NHI. In addition, it advised that if the capacity of the Department of Home Affairs is not likely to meet the demand for registration of all persons who might be served by the NHI, appropriate provisions should be inserted in the transitional arrangements to cater for this incapacity. A number of governance issues were highlighted. It was noted that the Fund was intended as an autonomous Schedule 3A public entity, but the Board was appointed by, and accountable to, the Minister. It was suggested that good governance required independence and accountability. Clarity was needed about the role of medical schemes, particularly around only providing complementary cover. Issues around the financing of the Fund were outlined; it was suggested that greater transparency was needed.

In response to the concerns raised about governance, Members indicated that the Fund was required to submit an annual report to Parliament on the activities of the Fund. They asked who the Fund should be accountable to, and independent from, to be considered ‘good governance.’

Lawyers for Human Rights’ presentation broadly emphasised the rights, legal framework and concerns around the provision of healthcare services to refugees and asylum seekers specifically. The presentation suggested that there was no rationale for the exclusion of migrants and asylum seekers and was simply unfairly discriminatory. Issues of xenophobia and the dehumanisation of refugees generally were emphasised. A number of recommendations were made, including the need to analyse evidence of migration, and what drove migration, as well as disaggregated data. The need for continuity of care was highlighted, specifically in reference to Tuberculosis and Human Immunodeficiency Virus. It was suggested that policy formulation and budgeting should be done on verifiable data and different departments and ministries should work collaboratively to resolve issues.

Members asked Lawyers for Human Rights to provide international precedents where migrants were sufficiently covered under a universal healthcare system. Concern was raised about people coming from neighbouring countries and ‘flooding’ the healthcare system.

Meeting report

Opening remarks & Programme Update
The Chairperson gave brief opening remarks. He stated that to date the Committee had heard from various organisations on the National Health Insurance (NHI) Bill. Three organisations would be presenting oral presentations during the meeting; the Committee would then adopt four sets of minutes from past meetings.

The Committee had wanted to continue with the NHI oral presentations during the term. Due to the pronouncement of the local government elections on 1 November 2021, Parliament would rise that day so that members of Parliament (MPs) could attend to their duties according to the elections programme. The Committee would continue with NHI oral presentations from mid-November 2021, as there were other obligations according to the Parliamentary programme.

The Members in attendance were noted as well as the apologies of Mr P van Staden (FF Plus), Ms M Sukers (ACDP) and Mr A Shaik Emam (NFP).

Black Business Council (BBC) presentation
Dr Tshegofatso Gopane, Healthcare Portfolio Chair, BBC, presented to the Committee.

-The members of the BBC welcome the release of the Bill and express their support for a universal healthcare system which provides for a more equitable distribution of healthcare resources to achieve the constitutional mandates that underpin this. 
-The BBC, however, noted that 25 years into our constitutional democracy, the healthcare sector has remained untransformed and our members who traverse in this sector throughout the eco system continue to be constrained by apartheid policies which do not promote Black owned enterprises.
-The regulator SAHPRA is the only institution in our beloved country that doesn’t comply to BEE Act and doesn’t recognise the need to transform the sector and reverse what the MCC (the Medicine Control Council) perpetuated to ensure that Black owned entities are denied entry into the sector.
-It is our proposition that SAHPRA should prioritise Dossiers submitted by majority Black owned and managed companies and be on immediate “Fast Track” for registration of medicines and supplementary products.
-The BBC notes the intention to introduce NHI in a measured, progressive and financially sustainable way, which is important for improved access to healthcare for all patients. This needs to be achieved while ensuring the continuation of existing and viable healthcare businesses, that can help solve public healthcare challenges in both the short and long term and contribute to much needed economic growth and job creation in South Africa.
-The BBC looks forward to partnering with Government to create sustainable business models that can appropriately support and assist efforts to ensure a secure, affordable and accessible medicines supply as part of a viable and workable National Health Insurance (“NHI”) system is introduced.
-In order to be successful, it is essential that the universal healthcare coverage system contemplated in the Bill is backed by a sustainable healthcare sector, i.e. the businesses involved in the provision of medical and related goods and services. As such, many of the queries and recommendations raised in this submission seek to address the common goals of improved universal access to healthcare while allowing a robust and sustainable transformed supply chain.

Business Case
-South Africa has seen closure of in excess of 37 manufacturing, primary and secondary packaging plants and facilities in the past 20 years, in the process the pharmaceutical sector has shed in excess of 10 500 jobs. We therefore propose a deliberate plan which seeks to re-dress the latter if we are to re-industrialise the sector and create sustainable job opportunities, whilst improving security of supply of medicines
-From a business perspective, there is a need for recognition of the level of inter-dependence of the public and private sectors to deliver a sustainable and secure supply of affordable medicines, inclusive of innovative, generic as well as the “core” Essential Medicines List (“EML”) medicines.
-We further wish to propose that manufacturing of pharmaceuticals could be used to stimulate economic growth and create sustainable jobs locally by ensuring that “core” (“EML”) are produced locally and through the Bill create a “Restricted List” of products which cannot be imported into the country. Most of developing economies have successfully developed the latter and in the process established security of supply of their (“EML”)
-The success introduction and implementation of UHC through NHI requires an unwavering security of supply of medicines especially (“EML”) and chronic medicines which has eluded the public sector since the advent of our democracy. SA currently imports in excess of 85% (“EML”) thereby creating jobs in India which is our main trading partner on medicines.

Medicines Pricing
-Of fundamental import to the Bill, and the sustainability of the NHI scheme and the healthcare sector, is the mechanism that will be used to determine prices for medicines. As the Bill stands, there appears to be:
-a conflict between the contemplated mechanisms for pricing of medicines;
-unforeseen knock-on effects to medicines pricing for those medicines not covered by the Fund;
-no clear indication of how the ‘setting of prices’ by the Office of Health Products Procurement will work in relation to the ’negotiation of prices’ by the Fund and the SEP which will apply to the purchases by the Fund.
-No clarity on whether a procurement process will be followed by the Fund to procure medicines and scheduled substances as required by the legislation applicable to public sector procurement.

As such, our submissions in relation to pricing predominantly pertain to these gaps/potential contradictions in the Bill. 
For clarity, we have set out our submissions regarding pricing under the following headings:
-negotiated SEPs;
-procurement of medicines, health goods and health-related products;
-review of pricing;
-the role and powers of the Office of Health Products Procurement, and the relationship between the pricing committee and other entities/committees;
-pricing of schedule 0 (category A and D) medicines; and
-donations of medicines to the State.

Negotiated SEPs
-We respectfully submit that the Bill requires clarity on how prices of medicines and Scheduled substances will be determined for purchase by the Fund. To this end, we point out that the Bill does not adequately delineate the relationship between the SEP system created by the Medicines and Related Substances Act 101 of 1965 (“Medicines Act”) and the procurement of medicines at the “lowest possible price” as contemplated in section 11(2)(e) of the NHI Bill.
-In terms of section 11(2)(e) of the Bill, the Fund may enter into a contract for the procurement and supply of specific healthcare services, medicines, health goods and health related products with an accredited health care service provider, health establishment or supplier, and must (i.e. is under an obligation), to inter alia “negotiate the lowest possible price for goods and health care services without compromising the interests of users or violating the provisions of this Act or other applicable law.”

Formulary and contracting
-It is our understanding of the Bill that, the Fund (or its Office of Health Products Procurement) will procure medicines. However, it is not clear how this procurement process relates to the Formulary and the relationship between the Fund, suppliers of medicines and the accredited health establishment or health care service provider that shall take receipt of the medicines, and how this process will work.
-In terms of section 38(2) it is stated that “An accredited health care service provider and health establishment must procure according to the Formulary, and suppliers listed in the Formulary must deliver directly to the accredited and contracted health service provider and health establishment”.
-The Formulary is defined in section 1 of the Bill as “the Formulary and its composition referred to in section 38(4)”. At section 38(4), it is stated that the “The Office of Health Products Procurement must support the Benefits Advisory Committee in the development and maintenance of the Formulary, comprised of the Essential Medicine List and Essential Equipment List as well as a list of health related products used in the delivery of health care services as approved by the Minister in consultation with the National Health Council and the Fund.” Notably, section 38(4) does not refer to a list of suppliers as being on the Formulary.
-In terms of section 11(2), the Fund may contract for the procurement and supply of medicines which must be aligned to BEE Act and PPPFA prescripts of sub contracting and empowering BEE suppliers
-Consequently, it is not immediately clear if suppliers of medicines will contract with the Fund directly for the supply of medicines, or if they will, after a procurement process be added to the list of suppliers in the Formulary, from whence health care service providers and health establishments can procure medicines.  We respectfully submit that greater clarity must be provided on how the Formulary fits into the procurement and contracting process. Further, the following will need to be clarified: will the health establishment and the supplier of medicines be required to enter into a separate agreement to the one concluded between the health establishment/health care service provider and the Fund, when will suppliers be added to the Formulary, once every year, or continuously, how will payment be effected between the Fund and the supplier of medicines and when?

Doctors rights to prescribe medicines not on formulary
-We therefore submit that it be made express in the Bill that nothing in the Bill will limit the rights/abilities of doctors to prescribe medicines that are not listed on the Formulary in circumstances where the user:
-Fails to use the referral pathways prescribed by a healthcare service provider or health establishment;
-Seeks services that are not deemed medically necessary by the Benefits Advisory Committee; or
-Seeks treatment that is not included in the Formulary.

Ministerial power and governance of the Fund
The advisory committees will be critical to the functioning of the Fund, and as such, the Bill contemplates their establishment as mandatory. Given their significance, we submit that the Bill should set out a clearer framework for the establishment and composition of each of these committees, and that at minimum, the following issues should be addressed in respect of each committee in the Bill:
-number of persons to comprise the committee;
-procedure for appointing members;
-term of appointment;
-fitness of persons that may be appointed;
-compliance to Employment Equity Policies
-procedure for removal of members of the committee;
-procedure to fill vacancies on the committee;
-remuneration/how remuneration of members will be determined; and
-minimum number of annual meetings.


(See Presentation)

The Chairperson welcomed the Deputy Minister Sibongiseni Dhlomo and his team to the meeting, and apologised for not recognising him earlier in the meeting, when he had joined.

Mr T Munyai (ANC) noted that BBC had spoken about continuity of the healthcare system. It was well-known that it was a two-tier healthcare system that benefitted the rich and excluded the poor. Was that what BBC was proposing – the continuance of the two-tier system?

He noted the concern about the uncertainty of the setting of prices by the Office of Health Products Procurement (OHPP). Clause 26 of the Bill spoke about the Healthcare Benefits Pricing Committee as one of the advisory committees of the Fund. It would consist of 16 to 24 members. Various industries would be represented on the Committee so that all issues could be raised and addressed. Did BBC need more clarity about this?

He responded to the suggestion that the Bill was silent on the issues of transformation and Broad Based Black Economic Empowerment (BBBEE); he asked if BBC had considered clause 28 of the Bill. It was important that the presenters had a comprehensive understanding of the Bill. He suggested that BBC should have read the Bill in its entirety. Had BBC read clause 28(7) of the Bill? It stated that it would be subject to the public procurement laws of the country as well as the policies of South Africa that gave effect to the provision of Section 217 of the Constitution, including the Preferential Procurement Policy Framework Act 5 of 2000 and the BBBEE Act 53 of 2003. These were out there. Why did BBC then state that the Bill was silent on BBBEE? He advised that when presenters came to present on the Bill ‘they should have read the Bill in its entirety.’

He asked that BBC provide clarity on their understanding of the content of regulation 19 of the Medicines and Related Substances Act. It was his understanding that there was international benchmarking when the Single Exit Prices (SEPs) were set. The presentation did not acknowledge that the reference of pricing was incorporated in the determination of the SEP. He requested clarity about what BBC proposed the replacement of the existing benchmarking system should be. It seemed that the interest of the BBC was about access to finance and procurement of medicines – he assumed some of BBC’s members were business people in ‘big pharma’ etc. He thought the interests of the people were much more important, specifically the quality of care of the people, than the ‘big profit.’

Ms A Gela (ANC) appreciated that BBC supported NHI in the country. She noted that BBC had pointed out that the drafters of the Bill did not appear to have taken account of the Constitutional implications of the NHI scheme, specifically the procurement of medicine. She suggested that clause 28(7) be considered. Clause 28(7) stated that the provisions of the clause would be subject to public procurement laws and policies of South Africa that gave effect to the provision of Section 217 of the Constitution, including the Preferential Procurement Policy Framework Act 5 of 2000. She asked for clarity about what BBC thought had been left out of that. Did BBC think that the preferential procurement principle should be specified in the Bill or could be included in the regulations? Did BBC prefer price control mechanisms per molecule type E, whether it was generic or an originator product for medicine pricing, or a negotiated lowest price per product being sold by manufacturers? Price control was currently not enforced in South Africa; manufacturers set their own prices per SEP for the tender process.

BBC was requesting that a lot of additional information be included in the Act, including process issues. Was it BBC’s view that the Bill as enabling legislation should contain all of those, or would BBC support the inclusion of these issues in regulations? Was BBC aware that ministers drafted regulations that then went through public participation processes? Parliament was not the normal arm of governance nor the drafters of regulations. Was BBC comfortable with the progressive introduction of NHI in line with Section 27 of the Constitution? Could BBC provide clarity about the statement that NHI would leave certain sectors worse off than they were currently? The majority of the population were currently left worse off, NHI was meant to redress this. BBC appeared to be of the view that legislation was designed to exclude certain stakeholders from operating in the pharmaceutical supply chain. Could BBC identify the clauses in the Bill that did this?

Ms H Ismail (DA) asked in what ways BBC viewed the NHI benefitting and supporting Black private and public healthcare professionals. In slide 7, it was mentioned that there was a need for interdependence between the public and private sectors. She asked that BBC clarify what was meant by ‘interdependence’ in this context. Would BBC prefer a parallel system, if so, why? What were the flaws of the current proposed structures of the NHI? What methods should be put in place to prevent corruption and irregularities in procurement processes? Massive corruption had been seen with COVID-19 and Personal Protective Equipment (PPE) procurement. What solutions could BBC propose to balance prioritization of Black owned companies and prevent and mitigate the potential for such a policy to take advantage of the system? BBC sought to promote and address injustices of the past by advocating for transformation and the promotion of BBBEE within the Act, at the same time BBC highlighted the need to ensure tender processes following the principles of fairness, competition, cost-effectiveness and value for money. As much as this was a noble cause, it was known that government abused BBBEE policies giving tenders to the politically connected Black elite, excluding price competition involved in tender deliveries. What solutions could BBC propose to ensure good transformation policies in the procurement processes of the NHI that would benefit small Black owned businesses.

Dr X Havard (ANC) stated that BBC appeared to be of the view that a negotiated price under NHI could not be considered as a single exit price (SEP), she asked for clarity about what informed this view. Could the BBC clarify where in the Bill it suggested that users would be worse off when NHI was implemented? Was this BBC’s own interpretation? Could BBC highlight the clauses in the Bill that implied that NHI would introduce retrogressive health for the population?

Mr E Siwela (ANC) asked a question about the pricing of the originator and generic medicines. He asked for clarity about what BBC was proposing that was not already happening in South Africa. He asked what BBC was suggesting the pricing system should be, in relation to the mention of Thailand’s system and its applicability to the South African context. The current SEP pricing regime accommodated unit pricing. BBC seemed to believe that the Bill would allow manufacturers to sell units at SEP; he asked if he had heard this correctly.

The Chairperson asked a question about the BBBEE points and the challenge to the legislative framework, raised in the presentation. Was it appropriate for BBC to challenge a legislative framework that embraced transformation and intended to redress the injustices of the past, as reflected very clearly in the preamble to the Bill? Was BBBEE not implied in the preamble and clause 38(7) of the Bill? He noted the question raised about the SEP. His understanding was that currently the SEP was applicable to a limited private sector population. Was it not correct that if it was applied nationally that economies of scale were expected to take effect on the final price of any pharmaceutical. BBC seemed to have reservations with this approach, as proposed in the Bill. He requested clarity about the reservations.

Dr Gopane stated that the majority of the questions seemed to be about pricing and procurement, which Mr Matabane and Mr Mofokeng could answer. The BBC did not propose the continuation of the current two-tier system. The BBC by and large supported the NHI and under no circumstances thought that the current system was sustainable. BBC was in support of equitable access to healthcare and social justice. The BBC did not support the two-tier system, if it was implied in the presentation, it was a mis-interpretation. The issue of users being left worse off under NHI was simply a caution made by BBC to state that there was access to healthcare currently in the public and private healthcare sector – and BBC would not want healthcare users to be left worse off than they were at present. Constitutional challenges might be posed if the benefits packages were lower than what users of healthcare had access to currently in the system.

Mr Gregory Mofokeng, Secretary General, BBC, addressed the issue of BBBEE and Preferential Procurement Policy Framework Act 5 of 2000 broadly. The BBC welcomed the fact that there was a link between the Bill and BBBEE and Section 217 of the Constitution on the procurement processes. The BBC wanted to emphasise that it saw an opportunity to re-industrialise the economy – this needed to take place hand-in-hand with government to build a viable pharmaceutical sector in the country. This would mean that one would need to be specific about which products would be manufactured locally to ensure the security of supply of medicines. If one approached it from a crude business perspective and did not become nuanced on ensuring that there was meaningful Black participation in that process, one would miss the boat. In the presentation, the BBC was specific about the issues of set aside contracts to ensure that Black manufacturers were already there and those that were intending to enter the sector could be supported through legislation, such as this Bill. There were a couple of things that could be achieved by doing this. The unfortunate reality was that there was not a sector charter council that dealt with the health pharmaceutical sector at this stage. Across some sectors, such as construction and property, there were specific sector charter councils that dealt with targets that needed to be reached for transformation. The BBC was hoping that through this process they would be able to lay a foundation for the sector to have targets to ensure meaningful secure Black participation.

On the issue of BBBEE, the BBC welcomed the link made between the Bill and BBBEE. One needed to be mindful of the fact that even under that broad legislation, government had introduced programmes, such as the Black Industrialist Programme which needed to be supported. There were three aspects under the Black Industrialist programme that were important. The first was access to markets, the Bill should lay a foundation for this; the second was access to finance, and the third was generic support to companies that would be benefitting under the Black Industrialist Programme and be assisted to be manufacturers. When one considered the Bill, it was an opportunity to lay a foundation for Black Industries in the pharmaceutical sector to be supported to be able to play a meaningful role in the supply of medicines to the NHI. That was the angle that BBC was coming from. BBC acknowledged that there was the Preferential Procurement Policy Framework Act 5 of 2000 and were mindful of the fact that the Public Procurement Bill was being processed. BBC had made extensive inputs on that.

He addressed the question about how to prioritise Black companies and have a transparent process. There was a well-documented process of how panels were put together in doing business with government. It was a transparent process where one was able to see which companies that were tendering and which would be included in the panels, the pricing that they would be utilising in the procurement process etc. If one looked at National Treasury’s provision of transversal contracts, it was a very transparent process; everyone knew who the players were and the pricing structures. A similar process could be followed in this case to ensure that there was transparency on all fronts.

Mr Kganki Matabane, Chief Executive Officer (CEO), BBC, requested that questions on the SEPs be responded to in writing.

The Chairperson stated that the Committee would look forward to receiving written responses about the SEPs, and other matters which may not have been fully answered.

Active Citizens Movement presentation
Mr Bonginkosi Shozi, a lawyer presenting on behalf of Active Citizens Movement, presented to the Committee.

Statement of belief
-Fundamental human right for all people to have access to healthcare (UDHR, ICESCR, ACHPR, Freedom Charter, Constitution of SA).
-Health is a public good, cannot be left to market; redistributive policies to address market failures.
-NHI based on: equity; cross-subsidisation; social solidarity.
-Structural barriers & social determinants of health must be addressed.
-Our support based on:
-Principles outlined above;
-Transparency & accountability in all processes;
-Addressing structural barriers and social determinants; and
-Fixing the (especially) public healthcare system; PHC; hospitals.

Constitutional Implications
-Limitations on asylum seekers & exclusion of “illegal foreigners” problematic
-Recommendation 1: The Bill must amend the provisions defining a “user”, remove insensitive language such as “illegal foreigners”, and adopt a clear principle of non-discrimination in the application of NHI.
-Recommendation 2: If the capacity of the Department of Home Affairs is not likely to meet the demand for registration of all persons who might be served by the NHI, appropriate provisions should be inserted in the transitional arrangements to cater for this incapacity.
-Does transfer of functions from province to central violate the Constitution? This is unclear in the Bill and must be addressed.
-Recommendation 3: Instead of the ambiguity that permeates this relationship, the Bill must clearly delineate the relationship between these two spheres of government, clarifying , for example, the extent to which Parliament is competent to legislate in matters listed under Schedule 5 of the Constitution in order maintain national standards.
-No clear requirement for the Fund’s Board to account to Parliament. This is the case despite the PFMA’s insistence that an entity is responsible for the submission of its annual report, including financial reports, to Parliament.
-Recommendation 4: The Bill must state clearly that, in addition to any other reporting to the relevant executive authority, the Fund Chairperson and its CEO must report annually to Parliament, in the respects already identified in the relevant sections, for the proper exercise of Parliament’s oversight role.
-Gap in the coverage of children between 0-12 whose parents do not register them; excluded; not in their best interests; denial of basic right.
-Recommendation 5: All children should be able to benefit from universal healthcare, regardless of age and, where the assistance of a parent or guardian is required, children should be able to register as users in an alternative way, in instances where a parent or guardian unreasonably refuses to assist them.

Governance Issues
-Fund intended as an autonomous Schedule 3A public entity, but Board, CEO appointed by and accountable to Minister. This is bad governance
-Recommendation 6: Good governance requires both independence and accountability. The Fund must be accountable to both Parliament and the Executive for the execution of its mandate and the expenditure of its budget, but must retain the independence to function without undue interference from the Executive.
-This means that the overbearing role of the Minister in making appointments to the board and the CEO must be replaced with greater autonomy to the board with regard to all operational matters.
-Some successful examples of how the balance between independence and accountability can be achieved are the South African Health Products Regulatory Authority and Legal Aid South Africa.
-PFMA gives government power to hire & fire Board, CEO; and cast all or most of votes at board meetings. This hamstrings the Fund’s independence.
-Recommendation 7: The provisions giving the Minister unfettered control over appointments, and the voting provisions should be removed. The panel established through a public participation process to interview candidates for the board should be credible, independent, and respected individuals from all sectors of society, who make recommendations to the Minister. In the event a recommendation is rejected it needs to go back to the Panel, with proper reasons, for review and resubmission.
-CEO to meet with MoH, DG & OHSC, min 4 times p/a to exchange information. The CEO is essentially directly accountable to them.
-Recommendation 8: This must be deleted and replaced with a provision that the CEO is appointed by, and accounts to, the board; and that she or he may interact with the Minister and other officers through the board.
-Ministerial Advisory Committees appointed by and report to Minister
-Recommendation 9: The provisions regarding the appointment of the advisory committees should be amended to give the board a co-equal role, with the advisory committees reporting to the board in the first instance, and then to the Minister; the issuing of regulations should remain with the Minister; and the issuing of guidelines should be allocated to the board.

Role of medical schemes
-Many unanswered questions; schemes to provide only complementary cover, but anomalies.
-Recommendation 11: The way in which private medical schemes will be impacted by the NHI needs to be addressed in the Bill, including the phasing out of the present medical schemes regime.

-Many questions about: the cost of administration of the NHI; cost of administration at provider level; fraud and corruption; accreditation of facilities and providers; impact on existing healthcare programmes etc.
-Recommendation 12: Government should take the public into its confidence by fostering transparency – and disclose details of financing and implementation plans in a responsible and responsive manner; institute proper checks and balances and monitoring of progress; and devise a clear programme of incremental implementation based on affordability, with realistic caps on the costs of Fund administration.
-Recommendation 13: Annual Tariff increases need to reviewed by National Treasury with final approval by the Minister of Health.
-Fundamental imbalances in public/private healthcare financing arrangements (government subsidising private sector @ 29% of total private healthcare expenditure (eg tax breaks on medical aid contributions).
-Recommendation 14: In the immediate short-term, the NHI Fund should be enabled in the legislation to achieve savings from the private sector expenditure through negotiating revised fee structures to make medical aid more affordable in the run-up to the full implementation of the NHI.


(See Presentation)

Mr Munyai stated that Active Citizens Movement’s concern about the lack of alignment between the National Health Act and the Bill was noted. Was ACM aware that the National Health Act was mentioned 34 times in the NHI Bill? Clause 54(4)(h) stated that in order to enable the introduction of NHI, the following legislative reforms or amendments would be initiated to the Medicines and Regulated Substances Act, Health Professions Act, Medical Schemes Act, Mental Healthcare Act, National Health Act and other relevant legislation. Was there any indication in the Bill that the Public Finance Management Act (PFMA) was excluded or the role of Parliament was limited? How did ACM interpret Chapter 5 of the Constitution, of the powers of the Minister? Was ACM proposing that Chapter 5 of the Constitution be amended? Active Citizens Movement had wanted to know how medical aid would be protected; was ACM aware of the current two tier system? Did ACM want the status quo to be retained? The NHI intended to help all people regardless of their socio-economic status.

Ms Gela stated that ACM’s recommendation that the Fund and its CEO must report annually to Parliament was well-received and was something that would happen. She asked if ACM had noted clause 51(1) of the Bill that dealt with annual reports submitted to Parliament. This clause stated that as the accounting authority of the Fund, the Board needed to submit a report to Parliament and the Minister on the activities of the Fund. Did ACM need further clarity about this? ACM seemed to be of the view that the Bill had excluded certain categories of children from benefitting from the South African health system, where was this done in the Bill? What did ACM propose as an alternative to the use of the term ‘illegal foreigners’ – what would be a non-discriminatory phrase? Would alignment with the term used in the Refugees Act of 1998 be acceptable? Was ACM aware that the Minister of Health was currently empowered to appoint the boards and CEOs of a number of entities and statutory regulatory bodies that fell under the National Department of Health? Why did it seem that ACM was opposed to the same approach being applied to the NHI Fund and its structure?

Dr Havard stated that ACM had highlighted areas in the Bill which were referred to as constituting bad governance. To whom should the NHI Fund be accountable to be considered ‘good governance?’

Mr Siwela stated that ACM had spoken about good versus bad governance and seemed to suggest that if the Minister was involved it would represent ‘bad governance.’ ACM had stated that good governance required independence and accountability. Independence from whom? Was ACM suggesting that if the Minister was involved there would be no accountability? He noted the concern about the role of the medical schemes. Some stakeholders had informed the Committee that over the years, medical aid scheme members were not protected despite increasing fees. There were also complaints about serious governance challenges in the industry. These observations were made by the Health Market Inquiry. Did this situation not threaten achievement of universal health coverage? What was ACM’s view on people insuring against the same healthcare costs twice – duplicate cover? Did this not lead to inequitable healthcare financing? Would it not perpetuate the current inequities thereby threatening achievement of universal healthcare coverage?

The Chairperson noted the question about the cost of administration under the NHI Fund. Clause 2 of the Bill stated that the NHI Fund would use a single purchaser / single payer system in order to ensure equitable and fair distribution of healthcare. The White Paper outlined the huge economies of scale along with efficiency gains due to reductions in non-healthcare costs because of strategic monopsony purchasing; the NHI admin costs would not be above five percent. What was perceived as an undesirable impact of the provisions of the Bill on medical schemes? Active Citizens Movement was proposing that government should develop legislation that was addressing the interests of medical schemes. How would fragmentation amongst private medical schemes reduce fragmentation in the financing of healthcare services? The concluding slide seemed to insinuate that there was not enough consultation on the NHI Bill. Was ACM aware of the numerous opportunities that government provided for public participation and commenting on various versions of the NHI policy as well as the Bill? Did ACM participate in any of these processes?

Mr Shozi responded to the question if ACM was aware of the numerous references to the National Health Act – it was aware of them. ACM was specifically concerned about certain aspects which may lead to overlap and duplication of functions. This was something that could be addressed in the form of amendments to the National Health Act. ACM simply wanted to bring attention to it because it could potentially be an area of concern and/or conflict.

He responded to the questions about the role of the Minister from a Constitutional perspective and if ACM was proposing the amendment of the Minister’s powers. ACM was not suggesting that the Minister should be stripped of any of his existing powers, as outlined in the Constitution. ACM suggested that the various functions that were provided to the Minister in the Bill required a greater level of transparency, a greater level of accountability and a lesser emphasis on one individual making so many decisions. ACM thought that a functionally independent NHI Fund would be in the best interests of all South Africans. The exercise of the Minister’s powers should be modified in order to secure the independence of the NHI and its various structures.

He addressed the question about maintaining the status quo of the two-tier healthcare system. This was touched on in the opening slides. ACM was in favour of a universal healthcare coverage system. South Africa was coming from a system where private healthcare coverage existed, the transition from private to universal health healthcare coverage needed to be addressed in a more explicit and nuanced way, because many South Africans were very concerned about it. This was important not just from the perspective of providing clarity and security to a specific group of people but rather to ensure greater public buy-in with NHI and its structures.

He was aware that the Bill provided for reporting to the Minister and Parliament. The current wording created the impression that most functions and processes needed to go through the Minister and this needed to be addressed in more detail, such that it was clear that the Fund was directly accountable to Parliament – such as in the case of financial reporting.

ACM’s written submission went into quite a bit of detail on the provision of healthcare to children, as covered by the Bill. Essentially, according to the structure of clause 5 of the Bill, children over the age of 12 years were capable of being registered in the NHI structure as users. However, children under the age of 12 years could only be registered with the assistance of adults if they were deemed to be part of a child-headed household. It created a situation where children who were under 12 years and were not in child-headed households could not, without the consent of their parents, become a user according to the NHI Bill. This created circumstances where if a parent unreasonably refused to register their child as a user, and the child was under 12 years, that they could not become a user, as implied by the wording of the Bill as it stood.

ACM was in support of adopting the language used in the Refugee Act. He responded to the question about the Minister’s current powers to appoint boards in various entities; he recognised that this was the status quo. As outlined in its written submission, there was a level of independence in the State Owned Entities (SOEs) that functioned well. Given the importance of NHI, it needed to be ensured that the Fund and its Board and CEO were able to be in an environment that allowed them to focus on promoting the best interests of South Africans and not be put in a position where they were subservient to a specific member of the executive. ACM was not suggesting that the Minister should be eliminated but rather that various mechanisms be put in place in order to allow the NHI structure to function independently and effectively.

He responded to the question about the potential for duplicative coverage. This was something that could be adequately addressed in the Bill or regulations. Duplication of services was not necessarily in the best interest of South Africans. That was something that should be avoided as far as possible except where individuals would be seeking to acquire insurance for services not covered by NHI – that was something ACM did not think should be taken away from people. He realised that the purchasing arrangements had been addressed somewhat, but more clarity was needed as outlined in their written submission.

ACM was not a defender of the private healthcare system or individuals who were currently benefitting from that system. The future of public healthcare coverage needed to be addressed so that South Africans could understand what would happen to them and how the future of universal health coverage would be chartered in the South African context.

He had simply emphasised the importance of public participation in the last slide of the presentation. He was very impressed with the lengths that the Committee and government had gone to involve members of the public in public participation. It was not intended to suggest failings on the part of the Committee. 

Ms Yaschica Padia, Acting Chairperson , ACM, stated that she was covered by Mr Shozi.

Lawyers for Human Rights presentation
Ms Hlengiwe Mtshatsha, Attorney, Lawyers for Human Rights, presented to the Committee.

-Mid-year stats for 2021 estimate the total population of SA is 60,4 million
-There are around 180 00 asylum seekers registered with the DHA and the number of applications for asylum has steadily declined over the years.

Legal framework: refugee rights
The legal framework protecting the rights of asylum seekers and refugees includes:
-African Charter on the rights and welfare of the child (ACRWC)
-UN Convention on the rights of the child (CRC)
-South African Constitution, 1996
-Immigration Act, 2002
-Refugees Amendment Act, 2020

Inclusion of asylum seekers and migrants: redress of past discriminatory law and policy
South Africa is a constitutional democracy where all who reside within its borders are entitled to the guarantee and protection of their human rights. The law remains a powerful instrument to achieve this objective. It follows that asylum seekers and migrants must be included as beneficiaries in terms of section 4 (1) of the Bill.
This argument is supported by the following:
-Preamble to the NHI Bill
-Constitution of South Africa Act 108, 1996
-The White Paper on International Migration, 2017

No rationale for exclusion
-There is no scientific based research that supports the exclusion of migrants and asylum seekers from access to the NHI and basic health services in general as an argument to save costs.
-Our past discriminatory policies seem to have persisted in current legislation, providing no rational basis. The unfair discrimination of asylum seekers and migrants is no different.
-A 2009 article written by Coovadia et al titled: ‘The health and health system of South Africa: historical roots of current public health challenges’ states that
-“The roots of a dysfunctional health system …in South Africa can be found in policies from …. colonial subjugation, apartheid dispossession, to the post-apartheid period.”

Climate refugees, environmental migrants and environmentally displaced persons
The global climate crisis has, among other issues, created climate refugees and environmental migrants. 
-Climate change leads to three types of migration-related effects on health primary or direct effects such as injuries and death resulting from extreme weather events;
-secondary or indirect effects from the increased geographical range of and populations exposed to new diseases; and
-tertiary or delayed effects from disrupted health services for individuals in need.

Host countries for both categories of migrants must include these groups in their health services.There needs to be inclusion and addition of resources to support migrant health as opposed to exclusion.
Unfortunately, there is a global law and policy gap in this regard.

The changing environment: movement of people and the implications for South Africa
-Globally the dehumanisation of refugees has increased, and long-term displacement appears to be the norm.
-In the lead up to the elections in May 2019 there was rhetoric of scapegoating migrants. This is in the broader context of xenophobic utterances and attacks.
-Public figures have made unsubstantiated claims that foreign nationals are burdening the public health system.
-With official StatsSA data estimating the population of foreign people in South Africa at 3,6 million persons, it is irrational to allege that the group is placing a serious strain on public health in a country with around 58 million residents. [2018 data]

-An analysis of the evidence of migration: What drives migration and how it affects South Africa.
-Urgently obtaining disaggregated data.
-That the Department of Health work closely with StatsSA. StatsSA is prepared to collaborate.
-Policy formulation and budgeting must be done against verifiable data
-The Ministries of Health and Home Affairs must work closely. For example, we propose the creation of a “health passport” or regionally recognised patient held health records to ease cross border access to health services.
-Ensure that the response to COVID19 does not present barriers to non-citizens e.g documentation for testing and / or vaccine registration
-Ensure continuity of care is not affected including the response to TB & HIV regarding the response to COVID19

-Ensure that migrant and mobile communities, including children on the move, LGBTQI+ persons, migrant sex workers and migrant workers in labour intensive industries such as mining, and agriculture are proactively included in care strategies.


(See Presentation)

Ms Ismail asked why government had excluded refugees and asylum seekers in the Bill. In slide 18, there was mention that extending access to migrants resulted in savings of indirect and direct costs. She asked that LHR provide examples of this and how it would lead to savings.

Mr Munyai noted that most of the presentation highlighted broad, and not specific, issues. Could LHR propose how government could mobilise additional financial resources to cover asylum seekers and the migrant population, both documented or undocumented? Were there any other good international benchmarks that could be put forward as concrete recommendations for government to consider? What did LHR think of the multi-lateral structures or forums, such as the Southern African Development Community (SADC), African Union (AU), United Nations and International Organisation for Migration to support government if this category of users were not accommodated under NHI? He had not heard Lawyers for Human Rights speak about economic refugees. Many of the refugees, from Zimbabwe for example, were not necessarily ‘political’ refugees. During December those ‘refugees’ would go back to their homes in Zimbabwe after working in South Africa. What status was considered for such a category of refugees?

Dr Havard asked how LHR proposed the Bill should address issues of scarcity of health resources and health professionals, specifically in cases where an influx of users was allowed into health facilities and facilities reached maximum capacity.

Ms Gela asked that LHR provide the actual numbers of asylum seekers and refugees in South Africa – how should one plan for this category of people residing in South Africa if their numbers were not known? Lawyers for Human Rights mentioned that refugees did not have equal access to healthcare in South Africa. In the Bill clause 5 referred to user registration and clause 6, the rights of users, did this not cover this concern?

Mr Munyai stated that one saw a lot of people from neighbouring countries coming to South African hospitals and flooding them. What were the concrete recommendations of the LHR on this?

The Chairperson asked that the LHR give an example of a system providing universal health coverage and providing the cover proposed to refugees and asylum seekers. The borders of South Africa were currently very porous. A porous healthcare system, without any form of rationing or restrictions for refugees and asylum seekers could prove detrimental to South African citizens. It would create serious sustainability issues for the Fund and impact service delivery for all citizens. He asked that the presenter propose how the NHI Fund could maintain its sustainability.

Clarity was requested about the health passport. He asked that LHR provide an example of a health system in either a developed or developing country that provided refugees and asylum seekers with free healthcare services at all levels of care without any form of restriction, registration or eligibility. Did LHR support the proposition that the NHI be used to identify documentation supported by the Department of Home Affairs and Security Cluster so that their presence in the country became known and documented?

Ms Mtshatsha responded to the question about the exclusion of refugees. In the Home Affairs policies, the exclusion or regression of refugee rights was due to the fact that refugees were not meant to be refugees indefinitely. Asylum seekers should only hold a temporary asylum permit for a maximum of six months and then their status determination process was supposed to be concluded so that person had the option or legal pathway to apply for permanent residency and then apply for citizenship.

She would go back to LHR’s written submission and provide more detail, in writing to the Committee, about the international study. She responded to the question about how government could mobilise additional resources. The rights of asylum seekers and refugees were meant to put them on the same level as South African citizens, such as rights to access and healthcare. She was aware that this access was subject to the availability of resources from the State. She noted that even citizens struggled to get access to healthcare services. Asylum seekers and refugees should be included under NHI to the extent that they were in the current system. There should not be irrational exclusion simply because a person held a different document. Asylum seekers had the right to work and study in South Africa. The children of asylum seekers had the right to access schools. Quite recently, the Scalabrini Centre in Cape Town went to the High Court to compel the Minister of Social Development to include asylum seekers within the social relief of distress grant during the lockdown. It was a balance of ensuring socio-economic rights to the extent that the State could mobilise those resources.

She responded to the question about other benchmarks; she would have to respond in writing when looking at examples of the SADC region, AU etc in terms of how multi-lateral forums could support the government. The United Nations High Commissioner of Refugees (UNHCR) supported universal healthcare that included migrants. There were guidelines on how universal healthcare could be done by States. Those guidelines could be provided to the Committee.

She responded to the question about economic refugees. Legally what happened was that they had limited options because economic refugees did not exist under the law, they either applied for asylum or regular refugee status. If they stated to Home Affairs that they were escaping economic crisis – those applications were unfortunately rejected because they did not qualify. The Minister of Home Affairs did issue a special dispensation permit for Zimbabwean nationals to recognise the economic crisis that happened in 2008 and 2011 in Zimbabwe. This was issued free of charge to Zimbabwean nationals that allowed them to work in South Africa and their children to get study permits.

She responded to the question about the use of the healthcare system by foreign nationals. This was testament to the fact that the South African healthcare system was better than that of countries where the migrants came from. It would be beneficial to have a health passport so that the Department of Health and Home Affairs were aware of the dynamics of why people would migrate temporarily just to access health services. There needed to be a discussion within the SADC about why foreign nationals were coming to South Africa and how it could be regulated. There were discrepancies about healthcare service payments to some foreign nationals – when that policy was applied, it was applied inconsistently.

She agreed that there were limited healthcare resources. Refugees were eligible for South African Social Security Agency (SASSA) grants. It made sense that they were included in clause 3 as users. Asylum seekers were victims of a system that was slow to determine their status – the Committee should be mindful of the fact that it was not in their control that they were being subjected to holding temporary documents for an extended period. There was a way for different government departments to work together, especially looking at the impact that exclusion could have on children. There were around 180 000 asylum seekers but they were not sure with the new online renewal system how many people still held refugee status. This would need to be ascertained via the Department of Home Affairs. There were problems with the statistics in that asylum status should lead to refugee status. Within the status determination process, people could be rejected or become illegal foreigners – which would effect their status as well. She agreed that it was difficult for government to assist if the numbers were not known. Disaggregated data was very important. StatsSA could possibly assist. In the past couple of months the Department of Social Development and StatsSA held a migration conference trying to ascertain the real statistics. The outcomes thereof could be communicated in Lawyers for Human Right’s written response to the Committee.

There was not an example of a sustainable system that accommodated refugees. She could substantiate the example of including migrants in the written response. In 2015 what came out of the Sustainable Development Goals (SDGs) was that member states did not really support or include migrants in their healthcare systems in a generous way. There was no perfect example.

The health passport, like a hospital card or clinic card, was really proposing a record from the health user/patient to state that they were receiving healthcare for a particular condition in their home country, and they were in South Africa to continue that treatment. If it was possible for South Africa to continue that treatment, especially if it was a public health concern, it should be done. The South African government could state that they would acknowledge such documents. LHR advocated for the recognition of different migrant documents, for example asylum seeker and refugee permits, so that service providers could recognise those documents and know what services a person who held a certain type of document was entitled to.

Mr Munyai asked if LHR would be happy if the Committee invoked the Security Cluster to deal with the issues of immigrants, so at least issues of national security were addressed.

Ms Mtshatsha stated that LHR had been making inputs on the Refugees Act and commenting on the amendments of the Immigration Act. LHR was engaging with the Department of Home Affairs on a regular basis. LHR advocated for the rights of migrants and refugees, who were entitled to those socio-economic rights and proper administration of status of refugees and asylum seekers. As soon as one was described as an ‘illegal foreigner,’ the idea was then to arrest and detain and deport. There needed to be an awareness that sometimes people became illegal foreigners through no fault of their own.

Consideration and Adoption of Previous Meeting Minutes
The Committee adopted four sets of meeting minutes from the months of August and September 2021

18 August 2021: Election of an Acting Chairperson; Consideration and Adoption of Minutes
The Chairperson took the Members briefly through the minutes of 18 August 2021.

Ms Gela moved to adopt the minutes.

Dr Havard seconded the adoption of the minutes.

The minutes of 18 August 2021 were adopted.

24 August 2021: briefing by the Acting Minister of Health on an Update on vaccines procurement and progress on the vaccination roll-out programme
The Chairperson took the Members briefly through the minutes of 24 August 2021.

Ms Gela moved to adopt the minutes.

Dr Havard seconded the adoption of the minutes.

The minutes of 24 August 2021 were adopted.

31 August 2021: Election of the Chairperson and NHI Public Hearings
The Chairperson took the Members briefly through the minutes of 31 August 2021.

Mr Munyai noted that Mr Chris Klopper, of the South African Teachers Union (SAOU), had lost connection while providing responses to questions about his presentation on the NHI. If he did not reply to the request for a written response, the Committee might need to invite him to a meeting again to ensure all due processes were followed so that it could not be reviewed at a later stage.

The Chairperson asked that the Committee Secretary capture what was said by Mr Munyai for the minutes of the meeting underway and the Committee could follow-up with Mr Klopper.

The Committee Secretary stated that she had forwarded the recording of the meeting to Mr Klopper so that he could respond to all the questions asked. 

Mr Munyai moved to adopt the minutes.

Ms Gela seconded the adoption.

The minutes of 31 August 2021 were adopted.

1 September 2021: Briefing by SAHPRA on COVID-19 vaccine licensing, vaccine efficacy rates and on the latest vaccine research International and in South Africa; Consideration and adoption of the Committee’s oversight report in KwaZulu Natal and Gauteng provinces; Consideration and adoption of minutes.
The Chairperson took the Members briefly through the minutes of 1 September 2021.

Mr Munyai noted that the spelling of Prof Rees’ name needed to be corrected. He moved to adopt the minutes with the amendment.

Ms Gela seconded the adoption with the amendment.

The minutes of 1 September 2021 were adopted with the amendment.

Closing Remarks
The Chairperson noted that Parliament was rising that day and would resume on 2 November 2021. There was already a tentative programme, which was informed by the programme of Parliament, as instructed by the Programming Committee. He wished all Members well during the constituency period.

The meeting was adjourned.

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