National Health Insurance (NHI) Bill: public hearings day 22; with Deputy Minister

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25 January 2022
Chairperson: Dr K Jacobs (ANC)
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Meeting Summary

Video (Part 1)

Video (Part 2)

NHI: Tracking the bill through Parliament

The Portfolio Committee on Health convened virtually to hear four submissions as part of the public hearing process on the National Health Insurance Bill (NHI Bill). Those four presenters were Bonitas, Discovery Health, Polmed and MedScheme. All presenters had expressed their unanimous support for the Bill and its objective for delivering universal health coverage to all South Africans.

Bonitas advocated for a more flexible role for private medical schemes under the National Health Insurance and raised a concern on whether it was constitutional to limit people's choice of healthcare service. Bonitas emphasised the important role which private sector could play in assisting the government in the rollout of Health Insurance to successfully deliver universal health coverage.

During the discussion, Members enquired about the impact of the introduction of medical health insurance on medical schemes, the growth of Bonitas’s membership, grievance cases lodged against Bonitas at the Council for Medical Schemes (CMS). Members also asked Bonitas about what it believed its role should be under the Health Insurance, how the poor population could be covered by medical schemes, what lessons and experience the National Health Insurance Fund could learn from private medical schemes, particularly its measures to guard the fund against maladministration and abuse of resources. Members also asked Bonitas to provide strategies on how it could improve its system to lower medical scheme premium cost to deliver optimal coverage; the impact of the removal of tax credits under the Health Insurance; Bonitas's understanding of the complementary services in section 33 of the Bill; referral pathways; Bonitas’s effort to standardise its service providers and their remunerations; the Health Insurance's conflicts with other legislation; whether or not private healthcare industry should be included on the Health Insurance Board; to identify the biggest barrier of access to healthcare. Several members asked Bonitas whether or not it supported the Bill and the notion of universal health coverage, whether Bonitas was comfortable with the current two-tiered healthcare system.

Discovery Health, in its presentation, emphasised its support for the National Insurance Bill, as well as the importance of collaborative work between the Health Insurance and private medical schemes to work together to deliver universal health coverage. Discovery highlighted the nuance and sophisticated skills and expertise that the private healthcare market has developed over the years, and also recommended a collaborative working relationship between both sectors.

During the discussion with Discovery, Members enquired about the referral pathway outlined in section 7(2)(d) of the Bill. They asked if preventative healthcare has been included in the NHI Bill; for more details of Discovery’s Vitality programme and the health expenditure saving it accrued as a result of the encouragement for its members to live a healthier lifestyle; the price-setting mechanism in the Bill; the role of management care system in the medical scheme; more details and clarity on Discovery’s administration fee as well as its membership growth rates now compared to that of pre-COVID. Members asked about Discovery’s vision on the role of private healthcare scheme under the NHI, the challenges Discovery foresaw on the quality of healthcare service delivery under the single-payer model; they asked for Discovery’s view on the power given to the Minister under the Health Insurance, as well as the aspects needed to be strengthened for the rollout of the Health Insurance. Members asked Discovery to comment on the uncertainty sections of the Bill; whether Discovery’s hybrid system would result in more equitable access to healthcare services; the robustness of the Health Insurance system against corruption and maladministration; how monopsony power would prevent purchasing from private providers under the Health Insurance. Members questioned whether Discovery did not see the need to change the current two-tiered healthcare system, which disadvantaged the poor. Some Members highlighted the high cost of Discovery premiums, and lamented that Discovery members often had to pay out of their pockets once their benefits are exhausted. The Committee Members expressed concern that members of private medical schemes are not benefitting from the schemes that they contribute towards.

Polmed’s presentation primarily focused on the reasons why the South African Police Services (Police Services) is a unique occupation that should be exempted from the Health Insurance, just like members of the National Defence Force and members working at the State Security Agency.

During the discussion with Polmed, Members questioned the fairness of having Polmed exempted from the Health Insurance; whether Polmed’s request shows its lack of confidence in the Health Insurance and certain programmes currently offered by Polmed would not be offered by the Health Insurance; whether Polmed had benchmarked its performance against similar healthcare coverage in other countries; why the presentation and the request was made by Polmed but not by the Police Services. Some Members enquired about Polmed’s proposal to provide medical health cover for senior members of the Police Services; they asked for Polmed’s view on whether the Bill had adequately addressed mental health coverage; asked about the number of grievance cases directed at Polmed; the extent to which Polmed members have access to PreP; Polmed’s coverage of speech occupational services; they also asked about the Polmed administrator.

The presentation by MedScheme focused primarily on the alternative reimbursement model that it supported to help bring the cost of medical scheme premiums down. MedScheme, just as the previous presenters, emphasised the role that the private healthcare market could play in the rollout of Health Insurance. The entity appealed for the Committee to recognise its role.

During the discussion, Members asked Medscheme whether it was proposing for the National Health Insurance to be implemented in a duplicated environment. They asked the entity to provide a solution to address the current challenges under a two-tiered healthcare system; asked about MedScheme’s relationship with Afrocentric Group and governance ethics; for the entity to provide more details on its proposed alternative reimbursement model. Members also questioned MedScheme’s stance on universal health coverage. They wanted to know more about MedScheme's engagement with the Health Professions Council of South Africa (HPCSA). One Member pointed out that the Constitution does make provision for the national government to intervene where issues such as equity and justice are concerned. 

Meeting report

The Chairperson welcomed everyone to the virtual meeting platform and introduced the guests of the day. The Committee would be receiving four presentations in total, from Bonitas, Discovery Health, Polmed and MedScheme.

The Chairperson informed Committee Members about the promotion of Ms S Gwarube (DA) [as Deputy Chief Whip of the DA]. As a result of that, Ms Gwarube would be leaving this Committee and she would be replaced by Ms Michelle Clarke (DA). The Committee thanked Ms Gwarube for her service for two and a half years on this Committee.

The Committee welcomed Ms Clarke to the Committee.  

The Chairperson also acknowledged the presence of the Deputy Minister of Health, Dr Sibongiseni Dhlomo, on the virtual platform.

This meeting was a continuation of the National Health Insurance (NHI) public hearings. The Chairperson informed Members that the Committee still had 34 oral submissions to listen to, which would hopefully be completed by the second week of February. The Committee would aim to receive six to seven presentations a day.

Submission by Bonitas Medical Fund

Mr Lee Callakoppen, Principal Officer, Bonitas, delivered the presentation to the Committee.

An overview of Bonitas’s profile was provided to Members. This included Bonitas's history, its claims breakdown as well as the core elements of its governance system.

Bonitas’s position was that it supports the concept of Universal Health Coverage, but it believes that the NHI Bill is only one aspect. Mr Callakoppen emphasised that collaboration should be the key to the success of the NHI. There is a role for private medical schemes in the rolling out of NHI and Bonitas appeals to Members to consider adopting a more milestone-based approach instead of using fixed dates as indicators in monitoring the rollout.

The key considerations that Bonitas put forward to the Committee included six key aspects. Those were:

-Pressure on state resources and infrastructure

-Language used in the Bill

-Constitutional issues

-Corporate governance of the NHI Fund

-Flow of funding from the NHI Fund to service providers

-Maintenance of the purchaser/provider split throughout the NHI system


Pressure on state resources and infrastructure 71 percent state 28 percent medical schemes. The inequity between public and private healthcare systems. Emphasise a human resources plan to enable the NHI. Bonitas supported the view that South Africans should be free to choose which funding system to support.

Bonitas emphasises the importance to implement the key findings contained in the Health Market Inquiry to reform the private sector as well as be a lesson for the rollout of the NHI.

Mr Callakoppen pointed out that some of the language used in the NHI was ambiguous.

Mr Callakoppen reminded Members of the rights that were provided by the Constitution. Those rights included:


-Freedom and security of person in section 12 (s12)

-Healthcare, food, water and social security in s27

-Human dignity in s10

-Life in s11

-Freedom of trade, occupation and professions in s22


Based on those constitutional rights, the NHI Bill would restrict people’s access to healthcare services and infringe upon the rights of practitioners to practice in Bonitas’s view. Hence, the NHI Bill may be inconsistent with the Constitution.

Good corporate governance was key to the smooth rollout of the NHI. Bonitas highlighted some issues that could help improve the corporate governance of the NHI Fund. Those details could be found in the attached slides.

Bonitas objected to the concept of a single-funder system. Mr Callakoppen cautioned Members that, should medical-aid tax credit be removed, it would lead to a risk of having more people using the resource of the public sector, adding to the existing overload burden.


Ms N Chirwa (EFF) remarked that it was untrue that the NHI would lead to greater confidence in the public's confidence in public health or government system. What she witnessed from the presentation was that Bonitas, a private medical scheme, managed to have grown even during a pandemic when people were economically suffering and losing jobs. She found that very concerning because the Council for Medical Schemes (CMS) had released a report calling to put an end to medical schemes. Her position to do away with medical schemes was more fervent than ever. In light of that, she asked Bonitas to provide the growth rate figures three to four years before COVID-19.

Ms Chirwa asked what the impact of the introduction of medical health insurance was on medical insurance subscription rates, as she observed that Members were leaving medical schemes over the years. She asked which calendar month of the previous year saw the most growth of new members joining Bonitas.

Ms Chirwa enquired about the number of grievance cases that had been registered at CMS, the number of cases that had been resolved and the number of cases ruled in favour of Bonitas.

Mr M Sokatsha (ANC) informed Bonitas that s8(2) as well as other sections of the NHI Bill make provisions of private medical schemes. But he did sense that Bonitas’ presentation had indicated the concern over the inadequacy of the role of private medical schemes under the NHI. So, he wanted to understand what Bonitas believed their role should be in the NHI Bill.  

Mr Sokatsha noted Bonitas’s position on the multiple fund universal health coverage system. Under this proposal, medical schemes would be allowed to service a new market sector. His question arose how this new market, presumably with consumers who are poor and are currently dependant on the public healthcare sector, would be paying for their medical schemes covers.

Mr Sokatsha highlighted the reforms needed for the private sector included in the presentation, but remarked that Bonitas had left out the corporate governance challenges in the private medical scheme industry. He thus asked Bonitas what lessons the NHI Fund could learn from the private medical scheme industry in addressing issues related to designated service provider contract issues, discrimination, conflict of interest, fraud, as well as waste and abuse of resources.

Ms A Gela (ANC) sought clarity on the presentation, slide four. It seemed to have indicated that the universal healthcare coverage in South Africa was the equivalency of an exercise of choosing a preferred healthcare funding system by consumers.

Ms E Wilson (DA) remarked on the disparate contrast between the ideal universal health coverage and the actual reality on the ground as well as the funding for quality healthcare. Universal health coverage means that anyone who needs emergency should have access to health facilities already in place to receive them, and the service should be free of charge. It is a struggle in reality. First of all, most people do not have access to healthcare facilities. Within those poorly maintained facilities, there are other issues such as understaffing, underfunding, etc. She concurred with Bonitas that, should people start cancelling their medical aids, it would put extra pressure on an existing crumbling health system.

Ms Wilson drew attention to the global struggle in terms of poverty, lack of jobs, concerning the unbearable cost of medical schemes. However, despite the high premiums that medical scheme members pay, those members always complain about running out of day-to-day benefits. This is a major contributory factor behind people who are planning to quit medical aid or move over to the NHI system. Ms Wilson wanted to know how Bonitas planned to deal with issues like that.

Ms Wilson agreed with Bonitas that the role of the Minister in the Bill appeared to be wielding too much power who has the sole authority to hire and fire the NHI board. She thus wanted Bonitas to provide some insights on how it envisaged this should be changed, how the board should be established and who should be responsible for the board and its members. For instance, does Parliament need to oversee the budget?

Ms Wilson wanted to know at what percentage Bonitas’s tax credits accounted for its total revenue income and the impact of its removal under the NHI would have on Bonitas.

Ms M Hlengwa (IFP) asked Bonitas if the company has had any interaction or discussion with the Department of Health (DoH) on what is considered as complementary services.

Ms Hlengwa commented on the referral pathways, and asked whether it is true that a person on medical aid scheme can choose not to go through the referral pathway. She wanted to know if Bonitas has had any discussion with the Department of Health on the matter.

Ms Hlengwa referred to a document submission made by the Professional Council of South Africa dated 18 May 2021 that the NHI should take over from medical schemes. After the statement was made, there was huge backlash in the public around the legality of the proposal. She asked Bonitas to comment on the submission.

Mr T Munyai (ANC) asked Bonitas if the company is aware that the White Paper states that contracting with private health providers would be undertaken to improve access to healthcare services to all South Africans and to reduce burden of disease. He asked if Bonitas was aware of ss37, 39 and 41 of the NHI bill. He believed Bonitas needed to look at those sections as the concern, which Bonitas mentioned in the presentation are being answered in those sections.

Mr Munyai noted that Bonitas claimed that all international concepts of Universal Health Coverage make provisions for consumers’ freedom of choice. He wanted to know if this statement could be backed by scientific evidence.

Mr Munyai highlighted the inequitable and unsustainable healthcare resource distribution between the public and private health sectors. In light of that, he wanted Bonitas to explain why it still was advocating for the private healthcare industry regardless of the high cost of healthcare in the private health sector.

Mr Munyai informed Bonitas that eight percent of the country’s GDP, which amounted to R400 billion, is being spent on the private healthcare sector per annum, whereas the majority does not benefit from that fund. Such inequity between resource distribution is the direct cause behind the poor infrastructure in the public health sector, and the NHI aims to address the gap. He asked Bonitas if they were comfortable continuing with the widening of the gap between public and private health sectors.

Mr E Siwela (ANC) asked Bonitas if the company had concerns about the Bill's impact on the remuneration of service providers as well as its effort in standardising the accreditation of service providers.

Mr Siwela sought clarity on the reference Bonitas had made in the presentation about the concerns that the NHI Bill had ignored other legislations as well as placing restrictions on the rights of health consumers.

Mr Siwela asked Bonitas if the company did not understand that the NHI Bill only sets out a framework, the details of the operation and management of the NHI fund would only be set out in the bill’s regulations.

Ms H Ismail (DA) asked Bonitas for its recommendations to improve the accountability and legitimacy of the NHI Board, and whether the private sector should be included on the board.

Ms Ismail asked Bonitas to describe the balance to find a doable and sustainable solution from the lessons learned during COVID-19.

Ms Ismail asked Bonitas to provide an assessment on how well the Bill is designed to protect the Fund from theft, corruption or maladministration, whether measures have been adequately put in place to detect corruption, and whether Bonitas believed that the Department should do a piloting study to assess its feasibility.

Ms Ismail asked if Bonitas felt that the NHI Bill, in its current form, infringed upon the rights of healthcare.

Ms Ismail asked Bonitas about its view on a single-purchaser model.

Ms Ismail asked how a lack of funding in the first few years of the NHI rollout would impact the rollout process and the economy.  

Ms M Clarke (DA) asked Bonitas what the biggest barrier to access to healthcare in the country was.

Ms Clarke asked Bonitas what impact the NHI would bring to the quality of healthcare services.

Ms Clarke asked Bonitas how strong the NHI Bill was in preventing looting and corruption of the NHI fund.

Ms Clarke asked Bonitas if South Africa could afford the NHI considering the current economic decline.

Ms Clarke noted the lack of accountability, which was highlighted in the presentation. She asked Bonitas what recommendations it would make to improve that regard.  

The Chairperson noted Bonitas’ concern on the exclusion of medical schemes in the NHI Bill. He quoted ss1 & 55 of the NHI bill on the definition of complementary cover. Thus, he asked Bonitas whether it was not aware of that and its view on duplicate cover.

The Chairperson asked Bonitas to explain its milestone approach, what milestone Bonitas identified, how those milestones could be included in the NHI Bill.

The Chairperson asked Bonitas to provide alternative wording to the part of the NHI Bill, which it accused of placing restrictions on healthcare services.

The Chairperson asked Bonitas about its view on the Bill's establishments of the Benefits Pricing Committee as well as Benefits Advisory Committee.

Mr Munyai sought clarity from Bonitas whether it was illegal for the Bill to seek to avail health resources to provide quality healthcare to the citizens of the country, as provided by s27 of the Constitution.  


Mr Callakoppen clarified Bonitas’s position that Bonitas supported universal health coverage. Bonitas did not dispute the legality of the NHI Bill in the presentation, but it rather highlighted certain aspects of the bill that may be construed as illegal in the course of its rollout. He reiterated that Bonitas’s position did not flag the NHI Bill as illegal but rather flagged certain parts of the bill, which could lead to further complications. The purpose of doing that is to assist the Committee in avoiding having such challenges in future.

Mr Callakoppen responded to Members’ question on the company’s members growth over the last two years, the impact of members turnover and which month Bonitas usually see the biggest increase in newly-joined members. He responded that usually the first month of a calendar year January is the month that sees the biggest changes in its membership changes. This is because all the changes in the benefits are in effect from 01 January of a year and when members of a medical scheme are allowed to select an alternative option. During the course of the year, although there would also be changes, the extent of membership changes is usually most significant in January.

Mr Callakoppen said that the number of disputes at Bonita could be provided to the Committee in writing.

A representative from Bonitas informed the Committee that the total number of principal members at Bonitas decreased 2.3 percent in 2017/2018, increased 1.7 percent in 2018/29, decreased one percent in 2019/20 and increased 2.1 percent in 2020/21. He attributed the decrease in 2020/21 to the contraction of the economy as a result of the strict lockdown. Bonitas generally budgeted and forecasted one to two percent of growth from year to year. He also reminded the Committee of the competitive nature of the private medical scheme market against the background of the slow economic growth. This resulted in the total population qualified for private schemes remaining static with no significant increase.

Mr Callakoppen responded to the question on what the baseline medical scheme package should be. He believed that it would be immature to dig into that question without any idea of the funding as well as the basic benefits of a package. He emphasised that ultimately benefits are determined by the NHI fund.

A corporate member from Bonita added that, at Bonitas, the primary healthcare is focused on members’ education. The education is to ensure that members willingly adjust their lifestyles and minimise diseases caused by lifestyle behaviours. Moreover, this education is also about the emphasis on early diagnosis of diseases. This part is to make sure that people who are diagnosed at the pre-disease level and then manage diseases preventing them from progressing to more severe levels. This can effectively reduce the burden on hospitals and health resources.

Mr Callakoppen emphasised the duality element, which should be enforced in the corporate governance of the NHI Fund and Board. In Bonitas’ view, if the Minister appoints the board, then the Minister should not be appointing the CEO because the board needs to function independently to perform its oversight function. He stated that this is the practice currently being practiced in the private sector as provided by the Medical Schemes Act. He believed that these lessons and experiences in the private sector can be learned by the public sector.

Mr Callakoppen supported the view that the public should participate in the various structures because the more transparency, the more credibility it would gain to the process.

Mr Callakoppen noted some technical questions from members. Those questions would be responded to in writing.

Mr Callakoppen confirmed that Bonitas has had engagements with the Department of Health as the company belongs to an association called the Board of Healthcare Funders (BHF). Through this forum, Bonitas continuously engages with the DoH indirectly through those forums.

Similarly, he explained that the referral pathway issue has been discussed through those industry forums but not directly with Bonitas.

Mr Callakoppen responded to Ms Hlengwa’s question on the Health Professionals Council’s suggestion to transfer all the assets into a central fund. Bonitas did not support the proposal made because it would be irresponsible at this point. Mr Callakoppen believed that, until more details of the NHI Bill became clear, such as funding basic benefits package, it would be irresponsible to make such a statement. Such statements could even be challenged in court by civil society, which would add extra burden to the judiciary system.

Mr Callakoppen confirmed to Mr Munyai that Bonitas was aware of the content and the mechanisms contained in the Bill. Bonita’s concern is whether those providers will be willing to be contracted, or such arrangements would lead to any unintended consequences such as providers exiting the system and leaving the country.

Mr Callakoppen commented on the lessons learned as well as whether the NHI should be piloting the system. This question is related to Bonitas's view on the rollout process should be milestone-driven instead of date-driven. The more prudent and responsible approach would be piloting and taking certain aspects of the NHI based on a framework to expand the coverage of the NHI.

Mr Callakoppen clarified that Bonitas was not saying that there must be freedom of choice in choosing medical schemes. Bonitas understood that there were different practices around the world with those different models working differently. Those practices were developed over the years concerning their environments. Bonitas intended to make a humble appeal to the Committee to consider the various systems around the world whilst being cognisant of the uniqueness of the health sector nature in South Africa. The entity appealed to Members to adopt a more responsible and collaborative working model to advance universal health coverage much faster and further. This will also help improve and resolve some of the challenges in the private health system at the same time.

Mr Callakoppen acknowledged the need for reform in the private healthcare sector to bring the cost down for more people to be able to enjoy its services. Health Market Inquiry has made many good recommendations in this regard.

Submission by Discovery Health

Dr Ayanda Ntsaluba, Group Executive Director of Discovery Limited, provided an overview of Discovery's stance on the NHI bill. He emphasised a collaborative approach that leverages extensive expertise in the health sector based on an aligned commitment to the policy principles.

Dr Ryan Noach, CEO, Discovery Health, explained to the Committee how medical schemes are structured. He emphasised the distinction between a medical scheme and a medical scheme administrator of a company that he is CEO of. He acknowledged that the entry price for medical scheme cover was indeed expensive.

As of 2019, 87.3 percent of all members' contribution goes to claims, 9.9 percent goes to administration and managed care expenses, 2.5 percent goes to financial advisors and scheme expertise.

Dr Noach explained to the Committee the relation between Discovery Health Medical Scheme and Discovery Health Administrator.

Vitality is Discovery’s initiative to drive behavioural change through preventative healthcare. Discovery believed that a healthier population leads to less burden to health resources, which thus can then lower the cost of medical schemes.

Dr Noach outlined the activities it undertook in support of universal health coverage and the NHI rollout.

Dr Noach informed the Committee that there were only 401 complaints submitted to the CMS out of the 47 million claims which Discovery had processed. The rate of complaints accounted for 0.000008%, which is marginal. Of the 401 complaints, 58 had been heard in 2020.

COVID-19 is another key event that reveals the need for fundamental changes to strengthen the health system in South Africa.  

Prof. Roseanne Harris, Head of Regulatory and Policy Affairs, Discovery Health, highlighted the key events of happened in recent years of the public-private collaboration to reform South Africa’s health system.

Prof. Harris provided some good examples of global health insurance models. Those included the parallel funding model, dominant public funding model as well as the blended funding model. A deep analysis of those funding models as well as their relevance to the South African context was provided to members. Prof. Harris recommended a blended funding model and pointed out that no country legislatively restricts the scope of services that private healthcare could cover.

Prof. Harris provided a blended funding model proposed by Discovery.

Prof. Harris also outlined many of the risks and unintended consequences should private medical schemes not be given a role under the NHI.


Ms Hlengwa asked Discovery Health about its view on s7(2)(d) of the NHI which reads,

a user--

(i) must first access health care services at a primary health care level as the entry into the health system;

(ii) must adhere to the referral pathways prescribed for health care service providers or health establishments; and 15

(iii) is not entitled to health care services purchased by the Fund if he or she fails to adhere to the prescribed referral pathways.

Ms Clarke asked Discovery Health in their view if there was any provision in the NHI Bill that focuses on preventative health given Discovery's strategy to encourage its members to do that through its vitality programme. Ms Clarke emphasised the importance of encouraging South Africans to live a healthier lifestyle as it would have a positive impact on lowering the healthcare burden.

Ms Clarke asked Discovery Health to quantify how much its members had saved on health resources as a result of their preventative measure to encourage members to live a healthier lifestyle.

Ms Clarke asked Discovery should the role of the private healthcare sector remain, as it is stipulated in the bill, what consequences would be.  

Ms Clarke asked Discovery why no country has implemented a regulation limiting the scope of private healthcare cover as mentioned in the presentation.

Ms Clarke asked Discovery whether it believed that the blended funding model would strengthen the NHI Bill’s achievements and outcomes in terms of its objectives.

Ms Clarke asked Discovery to elaborate on the challenges of the delivery of the quality of healthcare services it foresaw under the single-payer model. The presentation indicated that the lack of competition under a single-payer model would undermine health service delivery.

Ms Clarke wanted to know if Discovery Health has had discussions with its medical service providers on doctors’ migration issues as well as capping their earnings in the private sector.

Ms Clarke asked Discovery about their ideas to simplify the NHI bill in terms of the uncertainties of the NHI service package and s30(b) as well as other sections of the bill.

Ms Clarke asked Discovery its view on the Minister’s power given by the NHI Bill, would Discovery support such powers or would it make recommendations?

Ms Wilson concurred with the presenter on the three pillars, which hold the Universal Health Coverage together. Those three pillars are accessibility, quality of health care and affordability and sustainability. Currently, none of the pillars is existent in the health system. The budget cut exacerbates the already worsen healthcare system. Although the healthcare model of the United Kingdom is often mentioned as the role model for South Africa's NHI, it must be remembered that there is a very small demand for private healthcare facilities because the UK population has easy access to public health facilities. It is not the case in South Africa. Ms Wilson thus asked Discovery whether it agreed that the three pillars need to be strengthened before South Africa could implement the NHI.

Ms Wilson highlighted the maldistribution of human resources, which is a topic that has been discussed in this committee on a number of occasions. Due to the under-resourced nature of public health facilities, health professionals are wary of working in the public health sector. At Livingstone hospital, orthopaedic surgeries were stopped resulting in hundreds of patients who need such treatments being stuck in limbo.

Ms Wilson concurred with Ms Clarke that the Committee should bear note of the lack of competition and its consequence on healthcare service delivery under a single purchaser system.

Ms X Havard (ANC) asked Discovery to explain the basis that has led the medical scheme to conclude that there would be no incentive for innovation under a single-payer NHI model.

Ms Havard asked Discovery to indicate which section of the NHI Bill referred to medical schemes serving a population that is from the predominantly white race, as the presenters had said.

Ms Havard asked Discovery about its understanding of Universal Health Coverage and whether it was right to have a two-tiered system as it does currently.

Ms Ismail asked Discovery Health: to your understanding of the NHI Bill, what are the key features of the Bill that would result in equitable access to healthcare services? She further asked whether the accreditation system would further widen the gap of the existing inequity in the health sector.

Ms Ismail enquired about Discovery’s view on the bill’s pricing setting mechanism and asked whether Discovery thought that the bill should be more explicit in the mechanism.

Ms Ismail noted Discovery’s emphasis on the hybrid system in the presentation. She asked Discovery Health whether a hybrid system would lead to more equitable access to healthcare services and improve health outcomes.

Ms Ismail asked Discovery about its views on how private medical schemes should be specifically included in the NHI Bill.

Ms Ismail asked Discovery: to what extent does the entity think the current bill could stand against corruption? She also enquired about Discovery’s strategies to curb the loopholes of corruption in the bill.

Ms Ismail asked Discovery how it foresaw the NHI would bring to the quality of healthcare. The Bill intends to address the inequity of healthcare access. However, it must also be pointed out of the severe state the health sector is in currently such as the shortage of beds, delay in operation, litigation cost, etc. She asked Discovery whether it believed South Africa was ready for the roll-out of the NHI.

Ms Gela asked Discovery Health whether it was aware of s33 of the NHI Bill, which clearly defined the role of private medical schemes once the NHI has rolled out. She corrected Discovery’s view that the NHI Bill does not intend to eliminate private medical schemes.

Ms Gela noted the possible funding gap amounting to R212 billion in Discovery’s presentation and questioned the company whether or not it was not aware of Ch10 of the NHI Bill, which outlined the sources of the NHI Fund. Ms Gela asked if Discovery disagreed with s49 of the bill. She believed that the majority of the NHI budget is already in the health system, so she expressed confusion on what basis that led Discovery to the biased funding gap of R212 billion.

Ms Gela said that, if people leave medical schemes, they would get the NHI cover under the NHI Bill. Following that, she asked Discovery whether it shared the view that increasing public health funding would boost protection for people’s health.

Mr Siwela asked the presenters to explain how monopsony power would prevent purchasing from private providers.

Mr Siwela asked presenters to explain how it had factored in the current funding of the public health system in its funding model slides.

Mr Siwela questioned Discovery whether had any objections towards getting rid of the two-tiered healthcare system in South Africa that does not benefit the poor. He questioned whether Discovery values profits more than solving inequality in South Africa.

Mr Munyai got a sense that Discovery seemed to be concerned about the scope of private health facilities as indicated in slide 11. He further pointed out that Discovery seemed to indicate that it wished the current situation to continue thus suggesting private medical schemes to be running a duplication role parallel to that of the NHI. He thus questioned what made Discovery hold such a view to retaining such an inefficient, inequitable and highly-fragmented healthcare system.

Mr Munyai noted the unequivocal support that Discovery held towards the private healthcare sector and to maintain the status quo. He drew Members’ attention to the Council for Medical Schemes report on Discovery’s non-healthcare cost such as administrator cost. In 2020, Council for Medical Schemes reported that, for every 100 cents, 81 cents were spent on actual claims whereas eight percent was spent on non-healthcare costs. This cost increased by 3.6 percent from R13.84 billion to R14.35 billion. Thus, he questioned why Discovery would want to kill the goose that lay its golden eggs.

Mr Munyai noted Discovery’s explicit and unequivocal opposition to the NHI White Paper in 2017 and later the NHI Bill. But he believed that Covid-19 was the fundamental reason why the NHI should go ahead NHI. To start with, the overwhelmed health infrastructure in both public and private healthcare systems is the exact reason why the NHI should go ahead. Mr Munyai has had personal experience about benefits exhausted and members had to pay out of their own pockets.

Mr Munyai cautioned against Discovery’s indication that it seems to be proposing to do the NHI by itself. Mr Munyai reminded Discovery of the large share of health expenditure, which the private healthcare system gets whilst only serving a small percentage of the population that is inconsistent with the Constitution.

Mr Sokatsha informed Discovery that many medical scheme members have approached the government over the years requesting government to intervene in the private healthcare system. They requested because despite them being a member of a scheme and are paying the highest premiums, they are still expected to make huge amounts of co-payments or make out-of-pocket payments. Mr Sokatsha thus asked why the current system should still be retained whilst those who are making contributions are not benefitting from the system.

Mr Sokatsha said that the Committee had received reports from patients’ and practitioners’ groups reporting that medical schemes such as Discovery have directed substantial funding towards non-health costs and investment. They have instructed the management care system to deny healthcare to ordinary members. He wanted Discovery to comment on that.

Mr Sokatsha asked Discovery whether it agreed that the NHI Bill, although would not be rolled out in its entirety in its first year, would indeed provide a transitional phase.

Mr Sokatsha corrected Discovery that the Bill makes no mention of any funding being transferred to the NHI fund and asked Discovery to accurately quote the bill. S33 of the Bill talks about the role of private medical schemes under the NHI Bill and s48 and s49 address the sources of the NHI Fund.  

The Chairperson referred to slide four, which contained a pie chart of the breakdown of the 2019 Discovery expenses. To the Chairperson's understanding, 0.3% of members' contribution was spent on surplus, 2.5 percent was on financial matters, 9.9 percent was on administration matters and 25 percent was the threshold for solvency reserve; these added up to 37.3 percent in total. He thus asked: would this percentage be members’ contribution that is being spent on non-benefit claims?  The Chairperson believed that the figure provided by CMS, which was 82 out of 100 cents of medical scheme contribution was being spent on claims is significantly inflated compared to the figure provided for by Discovery.

The Chairperson asked Discovery to give figures on its actual administration fee and its managed care fees. He wanted to know whether the administration fees are the same for all its different options, how those fees would determine Discovery’s tariffs noting the conflict-of-interest issues highlighted by the Health Market Inquiry report and cross-ownerships and directorships between Discovery Medical Scheme and Discovery Company.

The Chairperson wanted to know what the percentage increase of administration fees was for the last two years, and how far those percentages were concerning consumer price inflation rates.

The Chairperson noted Discovery’s concern on the monopsony power, which could put financial pressure on providers. He sought clarity on whether Discovery did not agree with the active purchasing and selective contracting method, as proposed by the NHI Bill. He questioned if Discovery's administrator was not exercising buying power during contracted negotiations with providers. He asked how Discovery managed cross-ownership and directorships during such contracting process.

The Chairperson noted Discovery’s interpretation that medical schemes arose out of the context of social solidarity. He asked Discovery to elaborate on that statement and questioned whether the solidarity Discovery referred to would perpetuate fragmentation.

The Chairperson asked Discovery why medical scheme members still have to make huge out-of-pocket payments despite them paying high premiums. He wondered if the situation would be resolved by the roll-out of the NHI.

The Chairperson reminded Discovery of other countries such as South Korea and Vietnam that have successfully adopted a single-payer system.

The Chairperson read Ms Chirwa's questions as she was disconnected from the platform due to a connectivity issue.

Ms Chirwa wanted to know Discovery’s subscription growth rates before the pandemic.

Ms Chirwa wanted to know how medical insurance impacted the scheme over the years.

With the growth of members to medical schemes, Ms Chirwa wanted to know which month saw the biggest increase in membership.

Ms Chirwa wanted to know how many complaint cases Discovery had at the Council for Medical Schemes, how many had been resolved and how many cases were ruled in Discovery’s favour.


Dr Ayanda Ntsaluba, Executive Director, Discovery, commented on the issue of governance. He expressed his worry over the governance issue among the country's several institutions and emphasised Discovery was pleading with government to consider some of the recommendations made in the Health Market Inquiry. Overall, Discovery pleaded with government to establish a robust governance system that could withstand all seasons.

Dr Ntsaluba clarified that it was not Discovery’s position or view at all to oppose the NHI Bill. He cautioned against some Members' views that aim to describe Discovery's expressions of reservations of certain sections in the Bill as opposing universal health coverage, which is untrue. He stressed Discovery’s support of a mandatory contribution to a fund. Discovery's point is that it wishes government established a system that provides stability with minimum disruption of the original objective, which the NHI Bill aimed to achieve. The private healthcare sector acknowledged the many challenges as pointed out in the Health Market Inquiry and wished to reform its sector to align to the primary objective.

Dr Ntsaluba emphasised the importance of allowing health consumers to have the freedom of choice in choosing medical schemes.

Dr Ntsaluba clarified that R212 billion was addressing a bit of misconception among the public. It was a general belief that members’ contribution to purchase healthcare covers would automatically be transferred to the fund.

Dr Noach, CEO, Discovery Health, informed the Committee of the breakdown of members' contributions to Discovery. Of every R100 in 2019, 87 percent went directly to healthcare provider claims. This is unequivocally clear, as it is an audited number and is published. He corrected the Chairperson that it was not the 37 percent as the Chairperson had calculated.

He explained the origin of the 25 percent solvency reserve, and distinguished the difference between a balance sheet and an income statement. On the income statement of the medical scheme, the surplus from members’ contributions, subtracting paid claims, must contribute towards reserves. Once the medical scheme is built up, a sufficient reserve must sustain those reserves based on the risk profiles of the medical schemes. As of today, those reserves exceed 25 percent of those that meet the statutory requirement on the balance sheet. There is no specific pricing or allocation of cost to sustain those reserves because the scheme is actuarially solvent. He reiterated that 87 percent goes directly goes to claims, while 9.9 percent goes towards the administration fees.

Dr Noach elaborated on Discovery’s non-healthcare expenses. The non-healthcare expenses averaged eight percent of the total contributions received in the industry. The private healthcare system is an outstanding one if this figure is benchmarked against those of other countries, globally.

Dr Noach explained to Members the value of managed care fees. At Discovery, for every R1 rand, the ‘managed care’ function could generate R2.20 in savings, which accrued back to the medical scheme. He described it as a positive return, which is critical for the healthcare system. In the absence of a well-run managed care function, there would be all types of inefficient systems creeping in, which would lead to uncontrolled inflation of the healthcare cost. He emphasised that non-healthcare expenses are audited annually and are published in the report of the Council for Medical Schemes for members and the public.

Dr Noach informed the Committee that, over the last two years, the only cost that has been deflationary was the cost of administration. They were approximately 0.5 to 1 percent below consumer pricing inflation.

Dr Noach confirmed that a short answer to measuring preventative care in specific metrics is ‘Yes’. The Vitality programme leads to saving the medical scheme under administration, through behavioural change and lower healthcare risk of the population. The information is audited and published so that the public could have access to it.

Dr Noach explained contracting and the basis of the contracting process at Discovery. Highly sophisticated analytics, healthcare and data intelligence is required to measure and manage the contracting details with healthcare providers. This capacity has been developed over the years. This process is moving towards a very consumer-oriented, value-based contracting where purchasers of healthcare are buying an output of healthcare instead of a single service for a fee. This has led to a better outcome for patients as well as better efficient and effective purchasing and contracting.

Dr Noach assured the Committee that there is absolutely no such conflict of interest whatsoever in the contracting process. The regulatory environment oversees any potential conflict of interest and ensures so. In addition, the architecture upon which medical schemes are built also contains an independent board of trustees that are responsible for checking whether the contracting agreements are robust. At Discovery, whilst there was an investment in Discovery and some hospital groups 25 years ago by a single shareholder, that shareholder is completely diluted in the Discovery shareholding to such an extent that there are no cross-directorships and absolutely no conflict of interest, whatsoever.

Dr Noach informed the Committee that 12 percent of the population in the UK chooses private medical insurance alongside the coverage of the NHS. Although the NHS provided an extensive range of healthcare services, it does not legislate in any way what the private sector may offer. A demand and supply environment exists, which allows the private sector to provide services where consumers choose to purchase those services privately. He also reminded members that the NHS often chooses to purchase from private providers to supply its causes. The UK model is a blended model of a single purchaser operating alongside a private sector. Although it is not the blended model, which Discovery advocated and proposed to the Committee, Discovery wanted the Committee to understand the collaborative partnership between private and public sectors, which is crucial in the roll-out of the NHI.

Dr Noach reiterated Discovery’s unquestionable position, that it shared the Bill's aspiration to deliver universal health coverage. What Discovery highlighted in the presentation is the need for structural reform in both the public and private health sectors. Discovery believed that it had a lot of valuable experience to offer for the NHI for the roll-out to be managed most sustainably.

Prof. Roseanne Harris, Head of Regulatory and Policy Affairs, Discovery Health, explained that Discovery believed that some of the terms in s33 of the Bill are not clearly defined, which would create uncertainty. She acknowledged that, when reading ss6, 7 and 8 of the Bill, more clarity is given on the role of medical schemes.

She responded to why Discovery disagreed with the restrictions placed on private health insurance under the NHI Bill. The funding gaps created by such limitations placed citizens at risk. She believed that moving forward, a better way to address the gap is to adopt a blended approach. She argued that this approach is not two-tiered but rather operates like the vaccine system, with vaccines free at the point of service, but the funding allocation happens behind the scenes.

Prof. Harris clarified the monopsony purchasing model, referring members to s11 of the bill, which referred to the purchasing at the lowest possible price. This could be considered at odds with value-based purchasing. The real challenge is that, once the dominant purchaser has made a decision on which service provider should be accredited, then there would be no other service providers in the market anymore, under the NHI. If the appointed service providers do not perform, there is no competition for them in terms of the renewal of the contract. Discovery thus flagged this as a point for concern, whereas under a multi-funding model there would be managed competition, as seen in several other healthcare markets. Prof. Harris also emphasised the importance of competition to drive innovation on service offerings.

On s7 of the Bill, Discovery explained the intent of the section is a good one, as it aims to address the uneven distribution of health resources. Under the model provided by s7, every person in the country is connected to a GP, and the level of medical specialists cascaded depending on the need of that patient. The section makes the NHI responsible for sourcing certain medical professionals for patients in areas where such professionals are unavailable. However, Discovery was of the view that this would greatly test the existing health system of South Africa once it is implemented.

Submission by Polmed

Lt. Gen. Sello Kwena led the Polmed presentation. He said that the purpose of the presentation was to appeal to the Committee and demonstrate why members of the South African Police Services (SAPS) should be exempted from the NHI.

Lt. Gen. Kwena provided an overview of Polmed in terms of whom it exclusively covered, its options as well as the number of members it had.

Lt. Gen. Kwena explained why Polmed believed that the SAPS should be exempted from the NHI.

Ms Neo Khauoe, Principal Officer, Polmed, emphasised Polmed’s stance – that it agreed with the purpose of the NHI as set out its preamble.

Mr Jaco Makkink, Chief Operations Officer, Polmed, explained to the Committee why the scheme members' health requirements were different. Its benefits directed a huge portion to mental health disorders as a result of its members' occupation working in severe conditions.

Polmed’s unique package offerings were outlined. Those offers are specifically required for members of the SAPS.

Ms Khauoe also informed Members of how Polmed took action to look after its members during the COVID-19 pandemic.


Ms Ismail questioned the fairness of Polmed being exempted from the NHI. Although Polmed highlighted some of its unique features such as providing wellness days for mental health-related issues, Ms Ismail is aware that other private medical schemes also offer similar services. Hence, she believed that it would be unfair to other workers of the society that Polmed should be exempted from the NHI.

Ms Ismail asked Polmed whether it was of the view that the NHI would not be providing quality health services, which led to its appeal for its exemption from the NHI.

Mr Sokatsha understood that, unlike the South African National Defence Force (SANDF), the SAPS does not have its own hospitals and sick beds, so he wanted to know what Polmed proposed for its service delivery platform.

Mr Sokatsha highlighted that the NHI does not recognise healthcare as an industry but as a service to all people. He wanted to know whether Polmed saw healthcare as an industry.

Mr Sokatsha asked Polmed whether it was concerned that certain benefits such as the weight loss programme would not be covered under the NHI.

Ms Havard wanted to know whether the statistics as indicated in slides 11 to 13 also apply to senior members of the SAPS. She wanted to know what the proposal was to provide medical health cover for senior members of the SAPS.

Ms Havard asked Polmed whether SAPS had tabled its proposal to the Justice Crime Prevention & Security (JCPS) Cluster and the outcome from that engagement.

Ms Clarke recognised that policing duties have major consequences on the mental health of police officers. Hence, she asked Polmed whether they felt the bill had adequately addressed the mental health issue.

Ms Clarke noted Polmed’s appeal to be exempted from the NHI citing that the police force needs access to healthcare services without delays. Conversely, Ms Clarke asked Polmed whether they felt that the NHI would result in a delay in healthcare services.

Ms Hlengwa sought clarity on Polmed’s statement that the close interaction between Polmed and the SAPS would be lost once NHI is implemented.

Ms Gela asked the presenters whether Polmed has benchmarked how police forces in other jurisdictions had received their healthcare services.

Ms Gela asked Polmed to provide more details on its proposal on the coverage for the extended families for SAPS members.

Ms Gela asked Polmed whether it was suggesting amending the current s3(2) of the NHI Bill. If so, she wanted to know what specific amendment Polmed had in mind.

Ms Chirwa wanted Polmed to provide its members' growth rates before and after COVID-19.

Ms Chirwa wanted to understand how the introduction of the NHI had impacted Polmed.

Ms Chirwa wanted to know Polmed’s grievance cases reported to the CMS, the number of resolved cases as well as the number of cases ruled in Polmed’s favour.

Ms Chirwa noted that many members belonging to medical schemes find it difficult to get PreP. She wanted to know how easy it was for Polmed members to get on PreP.

Ms Chirwa wanted Polmed to indicate how it covered speech occupational services, whether this healthcare service falls under the general medical scheme savings or specialist services. Her view is that, if it is charged under savings, it would disadvantage the patient.

Ms Chirwa wanted Polmed to provide more details on why it believed that the NHI would compromise some of the services that Polmed provided. She also wanted Polmed to provide its interpretation on an inclusive healthcare system.

Mr Munyai wanted to know whether there was an increase in Polmed memberships.

Mr Munyai asked Polmed to provide reasons why this proposal was not being forward by the Department of Police rather than by Polmed.

Mr Munyai wanted Polmed to provide more details on how its proposals may benefit metro and other police services.

Mr Munyai said that he was under the impression that Polmed seemed to be suggesting that NHI would be incapable to provide the scope or the level of healthcare services that Polmed is currently providing. He thus asked whether Polmed supported the current status quo and whether it supported the idea of universal health coverage.

Mr Munyai asked whether Polmed was aware of the complementary role that medical schemes would play under the NHI. He also asked Polmed’s view on the matter.

The Chairperson asked whether Polmed’s motivation asking to be exempted from NHI was related to the general societal challenges or specific to the police community. He asked Polmed to make suggestions on how it proposed the SAPS should be treated under the NHI. He asked: if members of SAPS should be treated in this way, should health professionals, educators be treated in the same manner?

The Chairperson sought clarity on whether Polmed was suggesting that SAPS members should be exempted from paying NHI-specific taxes.

The Chairperson observed the whole vaccine roll out for the policing community, which was operated under Polmed. His observation was that Polmed did not provide vaccines but rather it had to buy services from providers. He thus asked whether it would be a duplication of function under the NHI.

The Chairperson noted Polmed’s proposed model and asked whether Polmed had concerns that its members would not receive healthcare under the NHI.

The Chairperson asked whether it would be possible for the SAPS to use the health services provided for by the SANDF as the presenter had emphasised the uniqueness of the policing community and argued that the SAPS should be distinguished from using the healthcare service used by the general population.

Mr Munyai asked who the administrator for Polmed was.


Lt. Gen. Kwena informed the Committee that, as Polmed was a closed medical scheme that is not available to all members of the public, only SAPS members employed by the SAPS are eligible to become members. For the past two to three years, since the SAPC did not make any new recruitment, there is consequently no new increase of membership subscriptions.

Lt. Gen. Kwena told the Committee that the Department had made a presentation to the Committee, appealing for the SAPS not to be included in the NHI. The letter that had been presented in that presentation was signed by both the former and the present national police commissioners Phahlane and Sithole, respectively.

Lt. Gen. Kwena pointed out that, as members of the SANDF and state security agency are excluded from the NHI, he believed that SAPS, as an essential service, should also be exempted from the NHI.

Lt. Gen. Kwena confirmed that there have been ongoing discussions within the JCPS Cluster. SAPS has escalated the issue to the relevant ministry to ask for SAPS to be excluded from the NHI.

Dr Makkink reported to the Committee that there were 105 complaints reported to the CMS in 2019, of which none were overruled, 61 were submitted to the CMS in 2020 with two funding decisions being overruled, and 47 complaints were received at the CMS in 2021 with none being overruled.

Dr Makkink confirmed that SAPS has had no new intakes over the past two years. But Polmed’s members decreased from 176 981 members in December 2019 to 172 849 members in December 2021.

Ms Khauoe clarified that Polmed was, by no means, suggesting in its presentation that the NHI would be sub-standard. Polmed focuses on the issues that Polmed members faced and experienced through its continuous data analytics and assessment on them.

Ms Khauoe mentioned one example in which Polmed had to arrange PCR test for police that had been deployed to perform some functions in the Western Cape when the province had the highest number of COVID cases. Polmed was able to immediately arrange those PCR tests before those police were scheduled to return to their provinces of origin. Whereas under normal circumstances, it would take a much longer time to get tested and wait for results.

Ms Khauoe also mentioned another example in which Polmed could help arrange isolation quarantine sites for Polmed members so that their members would not be returning home and expose their partners with comorbidity to COVID.

Hence, she emphasised that Polmed did not, in any way, suggest that the NHI would not offer quality healthcare services but rather highlighted the unique demands and needs of its members due to their occupation as members of the police force.

Ms Khauoe confirmed to Ms Chirwa that Polmed offers traditional medical scheme options and does not offer savings and that Polmed does cover speech occupational therapy.

Ms Khauoe informed Members that the SAPS had undertaken a benchmark of Polmed against medical schemes for the police force of other developed and developing nations. The finding was that, in developed countries, the police force is usually covered by their universal health coverage system. What Polmed requests from the Committee is what is being implemented in those countries.

Ms Khauoe said that Polmed would be willing to submit a plan on how Polmed planned to take care of its members on a specific platform. The board has already made decisions on what services SAPS members should receive at certain targeted places.

She acknowledged that vaccine rollout has been a tough process because of the stringent roles that Polmed played. Polmed had to ensure that the purchasing of vaccines was up to the DoH's standard as well as make arrangements for other issues such as the transporting of vaccines and vaccine storage.

She pointed out that, because Polmed is working closely with the SAPS the employer of its members, it becomes much easier for Polmed to take care of its members.

Ms Khauoe informed Members that many of the members at Polmed had indicated that they were in the SAPS because of Polmed. If Polmed loses its current status under the NHI, SAPS may face an exodus.

Ms Khauoe highlighted the uniqueness of the police occupation as well as its burden on those that live with members of the SAPS. Being a member of the SAPS meant that the mental health support that Polmed provided to its members was of great importance, although it by no means suggested that the NHI would not offer mental health services. Further, it was precisely because of the sensitivity of the police occupation that the dependants and families of the SAPS should be catered for by Polmed because they are the ones that have to put up with all the pressure at home with members of the SAPS.

Ms Khauoe assured the Committee that Polmed would be happy to make suggestions to the amendment of s3(2) of the NHI Bill.

Ms Khauoe clarified that membership to Polmed is only open for those members of the SAPS. Those belonging to Public Servants Association of South Africa (PSA) are not eligible to join Polmed.

Ms Khauoe commented on the loss of synergy. In previous years, Polmed collected and kept records of its members' data, so did the SAPS. The gap is that the two did not understand their roles and responsibilities. Although both had information to devise programmes to help the SAPS members to deal with some of the health challenges, Polmed could not come up with any detailed programme without the assistance of the SAPS. Programmes such as the weight-loss programme are particular to the police force to assist them in performing their day-to-day job responsibilities.

Ms Khauoe acknowledged that the introduction of medical insurance had hit Polmed in a hard way leading to an increase in medical insurance fraud. Some members affiliated with those programmes would make claims from the insurance despite their health providers have already submitted claims to Polmed. Due to its internal data analytics, Polmed was able to pick some of those irregular incidents.

Ms Khauoe responded that Polmed had no permanent tie with its administrator. Its non-healthcare expense accounted for 3.7 percent of the total contribution, of which 1.9 percent goes to the administrator. Polmed has one of the lowest percentages in the industry.

The Chairperson asked Polmed what the CMS has found on Polmed and whether there were any recommendations made by the CMS on Polmed.

Ms Khauoe responded that Polmed was not aware of any CMS findings except for some of the issues that had been tabled to the CMS. To her understanding, some of the issues had been closed.

Submission by MedScheme

Ms Fezeka Nompumza, Managing Executive: Clinical Risk & Advisory, MedScheme, provided an overview of MedScheme and its clients. She emphasised that the public-private partnership is instrumental to the good of society. Similarly, it applied to the healthcare sector as well.

Dr Samukeliso Dube, Group Functional Professional Specialist: Health Policy Unit, MedScheme, said that there was a need for the NHI to adopt an informed transition. Two key aspects that had been highlighted were the alternative reimbursement model (ARM) and the quality and outcomes reporting system.

Much of the various comments that MedScheme raised to the Committee covered these aspects:

-Singularity of the fund

-Role of provinces

-Role of the private sector

-Funding sources

-Applicability of the bill and complaints and appeals processes

-Governance issue

-Its concern on the duplication of functions



Mr Sokatsha asked whether it was MedScheme’s position for the NHI to be implemented in a duplicated environment. He asked how its proposal would help address the inequity challenge that existed in the public-private split health system.

Ms Havard referred to slide 13, which stated that voluntary health insurance would act as a catalyst to the realisation of universal health coverage. She wanted Medscheme to comment on the statement given South Africa’s challenge to expand quality healthcare services to all its citizens operating under a two-tiered system.

Mr Siwela enquired whether MedScheme believes that healthcare should be a public service that is not dictated by market fundamentalism. He wanted the presenters to elaborate further on why they proposed that the NHI fund must not be exempted from competition laws.

Mr Munyai said that, from MedScheme’s presentation, he got a sense that Medscheme objected to the single-payer system as proposed by the NHI Bill. Since South Africa has been operating on the multiple payer system in the private healthcare sector for years and consumers are not deriving any benefits from it, he wanted MedScheme to explain why it continued to still advocate for such a system.

Mr Munyai asked MedScheme’s presenters whether it supported the notion that the NHI would be a vehicle to deliver universal health coverage in South Africa.

Mr Munyai enquired about the relationship between Afrocentric Group and MedScheme. To his understanding, he referred to the fact that one of the directors at Afrocentric had been appointed the CEO of MedScheme. This question was raised out of the context of MPs’ own medical scheme PARMED, which he described as one of the most expensive medical schemes that had been inherited from the apartheid era. MPs were not given the option to choose which option they could take other than PARMED. Mr Munyai reminded MedScheme that, under the NHI, private medical schemes still had a role to play, but what MPs would not permit is that private medical schemes attempt to provide services that are covered by the NHI, as those services should be publicly administered.

Mr Munyai asked MedScheme to confirm its stance on whether MedScheme would like to see the current two-tiered system continue in which only a small percentage of the population benefitted from a disproportionately large health expenditure. COVID-19 highlighted the necessity to roll out the NHI given that healthcare facilities in both public and private sectors are overwhelmed.

Ms Gela asked MedScheme to comment on its governance issue on the relation between Afrocentric Group and MedScheme, whether that would not constitute a potential conflict interest. She further questioned whether MedScheme would recommend the same corporate governance style to the NHI as that which had been observed and practiced at MedScheme.

Ms Hlengwa asked MedScheme to provide more details on its proposed possible funding model for the NHI Fund.

The Chairperson enquired about MedScheme’s proposed alternative reimbursement model. He wanted to know why their model should be considered under the NHI.

The Chairperson asked MedScheme whether it had engaged with the Health Professions Council of South Africa (HPCSA) on certain ethical rules as well as thinking about how it could change the cost pressure of medical schemes in the current environment. He wanted to know the outcomes of those engagements if they had been taken place.

The Chairperson noted the presenters’ view that the roles of the DHMO and CUPHC should be consolidated to support better use of resources of the NHI fund. He thus asked the presenters why the same solution did not seem to be appropriate to consolidate resources in both public and private sectors to support the phased implementation of the NHI.

The Chairperson referred to the comment on the fiscus federal system provision in the presentation and thus asked the presenters if they were aware of the provision in the Constitution, which provided the national sphere of government to intervene if issues related to equity and justice are not implemented by provincial or municipal spheres of government. The Chairperson also believed that the presenters’ use of the example in the Netherlands neglected South Africa’s legacy issue of injustice.


Ms Nompumza responded to the question around the relationship between Afrocentric Group and MedScheme. She explained that Afrocentric Group is an investment holding company under which there were still many companies that provided support to MedScheme to bring the medical scheme premiums down. In the absence of those companies under Afrocentric, MedScheme would not be able to achieve this mission on its own. From a governance perspective, she assured the Committee that there are robust service-level contractual agreements to ensure that the interests of MedScheme’s clients are protected.

Dr Samukeliso Dube reiterated MedScheme’s vision, that it aims to get equal access to healthcare for all South Africans.

Dr Dube explained to the Committee that MedScheme’s view is that, at least in the beginning stage of the rollout of the NHI, there should be a duplicated environment for multiple flowers to blossom. The NHI has a lot to learn from the private sector, and government should not risk breaking what is already working in the private sector before it gets its own NHI smooth running on track.  

What is related to the issue of a duplicated environment is the competition issue that a member had also raised. Ms Dube said that MedScheme firmly believed that a well-managed competitive environment is instrumental to innovation, increased access, and better quality of healthcare, as well as bringing the healthcare prices down.

Ms Dube commented on Ms Havard’s remark on voluntary health insurance could be a catalyst to achieving Universal Health Coverage. She reminded Committee Members of the number of insured South Africans, which already is a form of Universal Health Coverage.

Ms Dube directly responded to Mr Munyai on his question about MedScheme's stance on the NHI. She believed that the MedScheme's support for the NHI was unequivocal and on the principle of solidarity. MedScheme would like to work with government together to make universal health coverage a reality.  

Mr Mike Marshall, Executive Manager: Research and Product Development, MedScheme, addressed Mr Munyai’s remark on expensive benefits as well as the lack of freedom of choice. In principle, medical schemes are sustained on the surpluses made between members’ contributions on the one end and claims on the other. Members’ contribution is determined by the profile of the member including factors such as health, age, etc. Medical schemes rely on their health risk management to manage the premium cost. The reason why scheme premiums are so high is due to the transactional type of system wherein quantity is being rewarded instead of quality. In addition, there exist a number of regulatory systems that also support that transactional type of system. To rectify this challenge, the Health Market Inquiry has made a number of recommendations that Mr Marshall believed could solve the challenge. Nevertheless, Mr Marshall said that the Committee needed to recognise that there are incredible skills and experience such as technology systems, data analytics, contracting, which the private sector has developed over the years, that can be learned by the NHI.

Mr Marshall elaborated a bit more on the Alternative Reimbursement Model (ARM), which he hailed as an attempt to address the current fee-for-service system that drives up the cost of medical scheme premiums. Under fee for service model, the reward is given by volume rather than the outcome of that service. It also causes fragmentation because there is no collective responsibility contributing to one outcome.

Mr Marshall acknowledged the need for greater transparency in the design of the ARM model. The flow of funds is especially important to be made transparent.

Mr Marshall confirmed with the Committee Members that MedScheme has engaged with HPCSA. There are always challenges around ethical rules in terms of how doctors can practice, which are not always in alignment with the ARMs. He recognised that some work needs to be done on that.

Ms Nompumza clarified to Members that, although there are many other available funding models, ARM is one of them that MedScheme believed to be most effective in driving down medical costs.

That concluded the public submissions of the day.

Consideration and Adoption of Minutes

The meeting minutes dated 08 December 2021 were considered and adopted.

The meeting was adjourned.

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