National Health Insurance (NHI) Bill: public hearings day 27, with Deputy Minister

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15 February 2022
Chairperson: Dr K Jacobs (ANC)
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Meeting Summary


NHI: Tracking the bill through Parliament

In this virtual meeting, the Committee received oral submissions on the National Health Insurance (NHI) Bill from three organisations: AfriForum, Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP)

AfriForum emphasised that it did not support the Bill as a financing model for universal health coverage, but highlighted its support of universal health coverage more broadly. It pointed out the Government’s track record, which inspired zero confidence, such as in the case of Eskom, South African Airways and Transnet. AfriForum highlighted the state of public hospitals and emphasised the need for infrastructure investment. Concerns were raised about the potential for corruption and the lack of decisive action against existing corruption. It was emphasised that National Health Insurance was unaffordable, based on there being no realistic estimate of the cost of National Health Insurance. The reliance and overburdening of taxpayers was highlighted with concern, particularly the feasibility of the Bill and National Health Insurance.

Committee Members o asked if the private sector should be included on the National Health Insurance Board, given AfriForum's concern about the potential for corruption and the need for oversight and transparency. Given that the Office of Health Standards Compliance was unable to manage 20 percent of the existing healthcare facilities, it was asked how this would impact the provision and compliance of facilities under National Health Insurance. A Member highlighted the work done by the African National Congress government since the end of Apartheid within the health sector, focusing on the provision of 24 -hour clinics and the introduction of new facilities. It was asked why AfriForum did not support the use of models, such as the National Health Services in the United Kingdom. A Member suggested that only a few had opposed the Bill, it was suggested that AfriForum wanted to advance 'racially-based capitalism.' It was asked if the Bill would meet constitutional muster, given its lack of sufficient coverage of refugees, foreign nationals and undocumented migrants. It was asked what alternative proposal AfriForum would put forward to meet the needs of the poor in South Africa.

COSATU supported the purpose and application of the Bill which sought to ensure equitable and fair distribution and use of health care services. It suggested that the purpose of the Bill be strengthened to include Primary Health Care which was the foundation of National Health Insurance and at the centre of its financial sustainability and success of health outcomes. COSATU supported the proposed referral pathways. The establishment of the Board was supported, and the union put forward that there should be representation from organised labour and other key stakeholders on the Board.

Clarity was requested about the union’s suggestion about co-payments. It was asked how the Fund would be protected from African National Congress members, ‘who sought to fill their own pockets,’ such as in the case of the Digital Vibes scandal. It was asked if the Bill was xenophobic, given its lack of sufficient coverage for undocumented migrants, refugees and foreign nationals. The positive role of the private sector was highlighted, particularly in dealing with the pandemic. Concern was raised about the ability of South Africa's small tax base to ensure the sustainability of the Fund. It was suggested that the presentation was progressive and spoke to the needs of the poor.

The SACP welcomed the Bill and its marked break form the unequal two-tiered health system. The SACP emphasised its support against 'corporate state capture/corruption' and 'neo-liberal austerity.' It suggested that the Bill needed to clarify the interpretation of ‘private sector,’ which was too vague. Actors in the broader health sector involved in socially-oriented activities needed to be distinguished from those profiteering in the private sector. The Party emphasised the need for in-built measures to prevent corruption. The SACP emphasised the need for comprehensive coverage to be rooted in the primary healthcare approach.

Committee Members sought clarity about the differentiation between the private and social sectors, if the SACP thought that National Health Insurance would pose an additional tax burden on taxpayers and its view on the constitutionality of the bill. It was asked if the Bill limited freedom of choice, and how this right compared to the right to life. A Member asked what the Party's view was on the socio-economic study that was carried out on the Bill.

Meeting report

Opening Remarks
The Chairperson made brief opening remarks. He welcomed those in attendance, including the Deputy Minister Dr Sibongiseni Dhlomo. Apologies were noted.

AfriForum Presentation
Mr Reiner Duvenage, Campaigns Officer for Strategy and Content, AfriForum, presented the organisation’s submission. He emphasised that AfriForum did not support the NHI Bill; however it did support the principles of universal health coverage.

The presentation highlighted the Government’s track record, which inspired zero confidence, such as in the case of Eskom, South African Airways (SAA) and Transnet. The 2020/2021 Auditor-General’s report was noted as well as the findings of the Zondo Commission which highlighted the failure of State Owned Enterprises (SOEs). Concern was raised about how NHI would be handled given this situation. It was suggested that there was a lack of will to end corruption and this would impact negatively on the NHI Fund – which would be ‘bled dry.’ The looting of the COVID-19 relief funds was highlighted as well as the former Minister being implicated in corruption scandals.

AfriForum emphasised that NHI was unaffordable, based on there being no realistic estimate of the cost of NHI. The Medium-Term Budget Policy Statement estimated an additional R40 billion over five years. An independent report from Discovery found that 44 percent (R212 billion) of total healthcare funding was spent in the private sector. The shortfall would need to be absorbed by the State if private medical aids were eliminated. The raising of taxes on already overburdened taxpayers was highlighted as being both unaffordable. Due to Government’s failure, South African citizens paid ”double taxes” for privatised essential services such as schools, security and healthcare. South Africa had a higher tax rate than countries in its Gross Domestic Product (GDP) bracket. The economy contracted by 7 percent in 2020, while the tax base declined by 7,8 percent. It was estimated that 25 percent of taxpayers paid 80 percent of income tax. NHI would break the taxpayer’s back.

The state of the current healthcare system was highlighted. Government had failed to maintain healthcare infrastructure, including major hospitals. Only the Western Cape reached a clean audit from the Auditor-General in the 2019/2020 audit. The Government was incapable of managing current healthcare services – a much larger scale health system would be a bigger disaster.

(See AfriForum’s Presentation).

Ms H Ismail (DA) noted that under the Bill’s current governance and organisational structure, AfriForum had highlighted corruption and the implications it had on the implementation of policy and how health systems and departments were run. Given that, would AfriForum recommend that the private sector be included on the Board to improve the accountability and legitimacy of the Board? Would AfriForum recommend that parliamentary oversight take place to mitigate against the threat of corruption? She asked if AfriForum thought the Bill was unconstitutional and on what grounds this was. Considering that the Office of Health Standards Compliance (OHSC) had not been able to manage 20 percent of the health facilities, and health facilities needed to reach certain compliance requirements, would it stifle or impact health service provision to communities, especially the poorest of the poorest communities?

Ms A Gela (ANC) stated that it was clear that AfriForum did not want people to have an equal health system in South Africa. During the Apartheid era, African people were treated unfairly – the standard of health was not equal. The NHI system would ensure that everyone had equal access to health services in South Africa. Black people were treated unfairly under the previous health system and the African National Congress (ANC) had tried to ensure that there was a better health system in place. There were 24-hour clinics in the provinces, which did not exist before. People were treated very badly in South Africa due to the Apartheid government. She appreciated what the ANC government had done so far. She did not have a doubt that the ANC would continue to fight for the poor. The previous government, under Apartheid, did not care for the poor; the ANC was trying to correct all the mistakes of the Apartheid government.

She noted that AfriForum had argued against using a system, such as the National Health System (NHS) in the United Kingdom (UK), as a model for South Africa, as the NHS was going through some challenges. She asked if AfriForum had considered the improvement of the health outcomes since the implementation of the NHS in the UK. She asked if AfriForum was familiar with the reduction in the mortality rate since the introduction of the NHS in the UK. She asked if AfriForum had considered the overall achievement of the UK system in its efficiency, equity and access indicators. Did AfriForum think that the current public and private health sectors in South Africa did not have challenges? Should the status quo continue? The British Medical Journal published its analysis on the performance of the NHS in 2018 and found that the health outcomes had improved substantially since the NHS was introduced in 1948. For example, an average life expectancy had increased from 68 years to 80 years. She highlighted the improvement in the infancy mortality rate since the introduction of NHS. Did AfriForum not want the same for South Africa? The government would ensure that the health system in South Africa was balanced, everyone needed to be treated equally. Currently, the government had done a lot to ensure that there was a better health system in South Africa. The President of South Africa, and the Minister for Health, were fighting to ensure that people got equal services in the Country, despite one’s circumstances.

Mr T Munyai (ANC) stated that more than 11 500 people had attended the public hearings in-person on the NHI Bill. Many people were calling for the NHI Bill to be passed. Many indicated that the country had wasted enough time already and should implement the Bill as a matter of urgency. Only a few opposed the Bill. What would be AfriForum’s answer to the poor, who could not afford healthcare? Was it AfriForum s view that access to equitable healthcare for all South Africans should not be considered because of reservations about the experience of government? Did AfriForum believe in the principle of social solidarity or ‘ubuntu’? Who would be the custodian of the voiceless as well as the needs of the people? He highlighted the disparity between those covered by medical aids and the costs associated with this expenditure versus that of the public sector which provided to the majority of the population. Most of the money in private hospitals was not used on core health services but on non-core activities, such as administration. Did AfriForum want to see South Africa divided, with limited access to healthcare. AfriForum seemed to want to ‘advance racially-based capitalism,’ where the few had access to healthcare and the majority were denied.

Ms M Clarke (DA) notted that AfriForum had highlighted that the NHI Bill was politically motivated. What was the true intention of the Bill? Given the current context COVID-19 had presented, surely NHI was needed more than ever or was it unaffordable? R3.8 billion was allocated in order to ensure that pilot projects were conducted on the NHI – she highlighted that no feedback had been provided about the outcomes of those pilot projects. She asked what AfriForum’s view was on the billions of Rands spent on medico-legal claims every year, given that the costing and feasibility of NHI was not clear. She highlighted the NHI grant underspending. In the 2020 budget, Treasury shifted R1.4 billion out of the NHI Indirect Grant, which funded the majority of NHI projects at the time. Treasury stated that the cut was due to slow spending on contracting general practitioners, mental health services and oncology services. Similar cuts were imposed in 2019, where R28 billion was underspent. The Medium Term Budget Policy Statement (MTBPS) saw Treasury cutting R308.4 million from the NHI Indirect Grant, trimming its allocation for 2021/22. What was AfriForum’s view on the fact that the NHI grants were not spent on what it was meant for and were returned to National Treasury? Did this provide an indication of how NHI would be managed going forward?

Mr M Sokatsha (ANC) stated that AfriForum had highlighted that the NHI was politically motivated, without any basis of the need for health financing for reform. It was acceptable to disagree on the universal health coverage model, if one did not trivialise or dismiss the unjust and inherent inequities in the current national health system. Was AfriForum not concerned about the skewed distribution of financial and non-financial resources within the national health system in South Africa? Did it concern AfriForum that most people did not have sufficient financial protection from catastrophic healthcare costs compared to those who could afford it?

He asked if AfriForum had followed the Health Market Inquiry proceedings; some patients sold their homes and other assets as medical schemes refused to fund their Prescribed Minimum Benefit (PMB) conditions in contravention of the Medical Schemes Act. Over and above the exorbitant private healthcare costs – beneficiaries were still faced with shrinking benefits. This included high out-of-pocket expenditure and the use of State facilities, due to running out of cover. Was the per capita expenditure on public and private healthcare services equitable? If so, he asked that AfriForum explain how. He asked if AfriForum had compared the disease burden in the public sector with the private sector, as well as access to healthcare providers within the two sectors. He asked who had to wait longer to see a specialist or die while waiting to see the specialist. Where was the greatest need and better access? Was there no need to equalise financial risk protection between the two sectors to enhance benefit incidents for all, whilst improving health outcomes, which was important for economic growth and the nation’s productivity.

Mr A Shaik Emam (NFP) asked if AfriForum believed that every human being in the country, irrespective of their socio-economic situation, was valuable and have access to equal healthcare. He asked if AfriForum knew what it was like to stand in a hospital and be told one was too old to be taken care of and that resources should rather be used for younger people. Many people, over 60 years, who needed dialysis and similar, were rejected by government hospitals. What was AfriForum’s view on that? AfriForum was correct in saying there had been a lot of shortcomings in government institutions, such as State Owned Enterprises (SOEs). Every person in South Africa needed to be protected and needed good quality healthcare – which was what the population was not getting.

He noted one of the solutions put forward by AfriForum about mandatory medical aids – he did not understand this. The majority of the people in South Africa went hungry to bed, he was not sure how everyone would contribute, even if it was a small amount to such a scheme. It was the responsibility of a government and a country to take care of its citizens. How would mandatory medical aids be implemented given the inequalities? Who benefitted the most from medical aids currently? There was a massive problem of recruiting General Practitioners (GPs) and similar. Would AfriForum agree that a large percentage of vulnerable people lived in rural areas? What was AfriForum’s view of big business and industry coming together with government to address the problem. Many people did not want to work in rural areas due to the lack of security, benefits etc – he agreed that there were limited resources available. Business depended on the people of its country, thus what should be its role?

Ms E Wilson (DA) stated that some aspects of the Bill, such as denying foreign nationals healthcare, went against the World Health Organisation’s (WHO) regulations. Given this, would the Bill meet constitutional muster if it went to a Constitutional Court.

AfriForum spoke about the collapse of the health system – this was known. There was no health system to talk about – specifically in the public health system. Anybody in South Africa, regardless of who or where they came from, had access to the public healthcare system. The public health system might be hard to access as well as there being inadequate quality and staffing. Given the fact that the government, or ruling party, had been in place for over 20 years, and the health system had gone progressively backward – would AfriForum agree that no budgeting and consideration had been given to the poor by government?

What percentage of people on medical aids currently were people of colour and what percentage were White? Her understanding was that 65 percent of those on medical aid were Black. The two tier system was obviously not protecting one section of the population. In fact, the two tier system was ‘working for both.’ She highlighted the role of the Minister in the Bill. In the news the day before it was stated that the former Minister for Health was implicated in yet another corruption report – it was well-known what the Zondo Commission had said. The Minister’s responsibility was substantial under NHI, such as the hiring and firing of Boards etc. What was the alternative solution? What would happen under a single buyer, single supplier, system? It had been suggested that this would stop innovation.

Dr S Thembekwayo (EFF) asked if AfriForum thought that there was not a single positive aspect in the Bill as it stood. How and where would AfriForum accommodate the majority of poor Black people, who could not afford any medical expense nor provision? Many could not afford Aspirin for a headache, but were well accommodated in the Bill. She asked that AfriForum provide more information about the elements of intellectual dishonesty as derived from the flaws as findings from the government impact analysis on the NHI Bill.

The Chairperson asked a number of questions, on behalf of Ms M Hlengwa (IFP). AfriForum had mentioned the government’s impact analysis study on the NHI Bill and the flaws it contained. It was asked that these flaws be explained. Presentations from other stakeholders had raised concerns about the constitutionality of the Fund - this was not addressed in AfriForum’s presentation. What was AfriForum’s views on the constitutionality of the Bill?

The Chairperson posed his own questions. He was quite surprised at the manner in which AfriForum had presented. The Committee had made a decision previously that Members would not refer to political parties when speaking about the NHI Bill. Throughout the presentation, reference was made to the ANC and the flaws of the ANC. This was an important issue, looking at access to quality healthcare for all South Africans, and was taken as an opportunity to separate the Committee. The separation was so clear, in AfriForum’s lack of support for the Bill. He also did not appreciate the presenter asking a Member to mute their microphone during the presentation, when it was not known if it was a Member of the Committee or not. South Africans needed to get together around policies that sought to provide for all South Africans. He ‘did not like the presenter’s tone.’ He suggested that the presentation had not focused on the Bill. Not once was a clause referred to in the presentation.

When one spoke to the object of the Bill, which were based on Section 27(2) of the Bill of Rights, which stated that the State needed to take reasonable legislative and other measures, within its available resources to achieve progressive realisation of the right to access healthcare services. Who should be responsible for doing that? He asked if AfriForum was familiar with Chapter 10, clauses 48 and 49 of the Bill as well as the Memorandum on the Objects of the Bill. It stated that the Fund would be financed in various interrelated phases in consultation with National Treasury. Was AfriForum familiar with the cost estimate on the Bill, that was included in the Memorandum on the Objects of the Bill. This costing exercise included actuarial costing models by National Treasury. He asked that the costing exercise undertaken by AfriForum be shared with the Committee, as well as the costing methodology used. He asked that AfriForum consider the findings of the Health Market Inquiry, that showed unexplained increases in PMB expenditure. He asked that AfriForum focus on demand-side factors in its response. He noted the need for all countries to move toward universal health coverage, in line with WHO and the United Nations (UN) Sustainable Development Goals (SDGs) 2030. Why did AfriForum believe that universal health coverage was being forced on South Africans?

Mr Duvenage responded to the Chairperson’s question about his tone and taking over the Chairperson’s role in the proceedings. He explained that this had been his first time presenting in front of such a committee and apologised for speaking out of turn, when the Chairperson may have handled the situation.

AfriForum supported the representation of private medical aids and the need for more cooperation. He was not a legal expert however; he had spoken to some legal experts about the constitutionality of the Bill. AfriForum was ready to challenge the Bill in court, as it was not thought to pass constitutional muster. He responded to the questions asked about the impact on the poorest communities. He highlighted the government’s track record of managing the healthcare sector and the systemic corruption, including the looting of the COVID-19 Fund, where the poorest of the poor people were affected most severely. The government had failed to provide to the poor, specifically quality healthcare. Unfortunately, the crux of the matter was that the NHI Bill was unaffordable and it could not be forced on the already overburdened taxpayer. 25 Percent of the Country’s taxpayers paid 80 percent of all income tax. He suggested that the NHI was unaffordable and would impact the poor worse than what was currently experienced – which was largely due to poor governance.

He noted that Ms Gela had suggested that NHI would ensure equal access to healthcare. Of course AfriForum wanted there to be access to quality healthcare for all South Africans, however the NHI was the wrong way of going about achieving it. NHI would be equal in that it would ensure poor quality healthcare for all South Africans. It would eliminate the private medical sector. He suggested that the UK could not be compared to South Africa – South Africa was spending much more on healthcare than comparable countries in its GDP bracket. The country had significantly worse health outcomes than other countries. He suggested that the NHI would be mismanaged and corruption would take place. The current system was already failing. NHI was unaffordable and would lead to mass emigration and the collapse of private medical sector. All of those factors would be detrimental to all South Africans.

He noted that Mr Munyai had suggested that not many people opposed the Bill. He did not agree, there were a significant number of people who opposed the Bill. AfriForum agreed that all South Africans should have access to quality healthcare – in terms of social solidarity. To achieve this, private medical schemes needed to be expanded allowing for competition in the private medical sector and thereby driving prices down. The governance issues which were causing the severe problems in the healthcare system needed to be resolved. Once those issues were addressed, one could consider compulsory medical aid to improve universal access to quality healthcare.

He responded to the question about a racially divided system. It was not a racial situation. AfriForum argued that the Bill was politically motivated. It was a way of garnering votes from poor South Africans who were desperate for quality healthcare. The reason the poor did not have access to quality healthcare was because of government’s failure. The consequences of implementing the Bill would be detrimental to all South Africans. The presentation had highlighted the mismanagement of the current healthcare system and the fact that the NHI Bill was not costed properly. The response to the COVID-19 pandemic had been managed terribly by the government, especially the public healthcare. The COVID-19 Relief Fund was looted – which was terrible and had impacted the poorest of South Africans the most.

He noted that there were reforms needed in the private sector – it was terrible that people had to sell their homes to fund healthcare expenses. The best way of improving the situation was not by completely destroying the current system and eliminating private medical aids, but rather by having private medical aids compete in an open market. The burden of disease was higher in the public sector than the private sector, this was due to government failure. This needed to be addressed first, by getting the corrupt individuals out of government. Then one could start expanding private medical aid. Once one had sorted out the problems, the Country could move toward compulsory private medical aid. A centralised State Fund, which was open to looting, was not the way to go.

AfriForum believed that every human being was valuable in South Africa – it was a given. Medical aids ran at a profit, but it was part of the free market, and it was something that could be improved further and reformed. AfriForum impact analysis study and findings were available on their website.

He responded to the Chairperson’s statements about the presentation being political. AfriForum had referred to ‘the government,’ which was being lead by a particular political party – he asked if the protocol was to not mention the name of the party.

AfriForum had not commented on certain clauses of the Bill, AfriForum rejected the Bill in its entirety, due to the reasons listed comprehensively in the presentation. AfriForum had commented on the costing of the Bill. AfriForum had been involved in commenting from the beginning and found it to be unaffordable. Once clean audits were received from all facilities, one could expand the private sector further and allow private medical aids access to the market to improve competition and bring costs down for users. That would be the best way of ensuring quality healthcare for South Africans. In the long-term the Country could move toward implementing a system of mandatory private medical aid.

Ms Ismail followed-up about a question asked in another forum, about what might have been lost due to the fire in parliament, particularly relating to the NHI Bill and submissions.

The Chairperson stated that he did not have the answer as yet, but would make every effort to get that information for the Committee.

Presentation by the Congress of South African Trade Unions (COSATU)
Mr Matthew Parks, Parliamentary Coordinator, COSATU, presented the organisation’s submission on the NHI Bill.

COSATU supported the purpose and application of the Bill which sought to ensure equitable and fair distribution and use of health care services. The purpose of the Bill should be strengthened to include Primary Health Care which is the foundation of the NHI and at the heart of its financial sustainability and success in relation to health outcomes. Bringing healthcare as close as possible to where people live & work constitutes the foundation for an inclusive health care system. COSATU supported the Bill’s scope in providing for universal population coverage e.g. all persons legally resident in South Africa and emergency care for undocumented migrants. The correct balance needed to be achieved between the values of the Constitution, South African laws, international commitments and financial sustainability.

COSATU supported provisions for health care service coverage which required a user to first access health care services at a primary health care level as the entry into the health system. COSATU supported the adherence to referral pathways prescribed for health care service providers or health establishments. One should not be entitled to healthcare services purchased by the Fund if he or she fails to adhere to prescribed referral pathways.

COSATU supported the establishment of the NHI Board to protect NHI from unethical and unlawful practices. The Bill provided for the Board to have “appropriate technical expertise, skills, knowledge or experience in health care service financing, health economics, public health planning, monitoring and  evaluation, law, actuarial  sciences, information  technology and communication”. The White Paper called for Board to “include expertise in health care financing, health economics, public health, health policy and planning, monitoring and evaluation, epidemiology, statistics, health law, labour, actuarial  sciences, taxation, social security, information technology and communication”. The major contentious issue on the NHI was the capability of state to manage the NHI Fund and its protection from unethical and unlawful practices. COSATU supported inclusion of organised labour in the advisory committees established by the Minister for Health e.g. Health Care Benefits Pricing Committee as well as Stakeholder Advisory Committee. COSATU called for representation of labour and key stakeholders on the Board as provided for in the NHI White Paper.

COSATU supported provisions for the role of Provinces in the NHI Bill. This inclusion ensured job security in Provincial Departments of Health, with the implementation of the NHI. COSATU believed in centrality of patients and health workers as a key foundation for the NHI. Centralisation of the NHI Fund and the procurement of health products should not cause job losses for workers currently performing such functions in Provinces. Workers displaced by centralisation should be absorbed in other areas of the NHI Fund.

(See COSATU presentation)

Ms Gela noted that COSATU had suggested that there should be broader representation by key stakeholders on the NHI Fund Board. Was this request over and above the participation of unions in civil society, as outlined in clause 27 of the Bill. She asked for clarity about COSATU’s recommendation about co-payments. The NHI White paper stated that NHI cardholders would not be expected to make out-of-pocket payments, such as co-payments. Was COSATU recommending that the co-payments not be abolished if there were members who by-passed the treatment care pathway?

Ms Ismail stated that the presentation had mentioned that a single purchaser, single buyer, model ensured that the Fund was not vulnerable to exorbitant prices and above inflation cost-increases. According to the Public Finance Management Act (PFMA) and National Treasury instruction to date, departments were meant to advertise stating details such as price, company names, award dates etc. In addition, the PFMA highlighted that price was the first indicator that should be considered when awarding tenders. Tenders were awarded to companies that over-charged for products or services, as seen in the SIU reports. Considering the flaws in implementing procurement rules and regulations, how did COSATU see this as lowering prices? How would the Fund be protected from ANC members seeking to fill their own pockets, as was seen in the Digital Vibes scandal? What would suggestions could COSATU make to protect the Fund from political interference? Did COSATU consider the Bill to be constitutionally aligned? Would COSATU consider the Bill as being xenophobic, in its exclusion of asylum seekers and refugees? Did COSATU not feel that the freedom of choice had been infringed by the Bill?

The OHSC presently could not manage to monitor 20 percent of public healthcare facilities. It was known that there would be some healthcare facilities that would not meet certain healthcare compliance requirements and not be able to operate under NHI. This would impact service delivery to the Country. Would this not impact negatively on the healthcare workers’ jobs. Did COSATU think that the Bill would stifle innovation in the healthcare system? Would most professional healthcare workers leave the Country under NHI? Did COSATU think that the private sector played a complementary role to the public sector, especially given the failing infrastructure and shortage of staff in the public sector. If it was not for the private sector during the COVID-19 pandemic, many more lives would have been lost. Would COSATU not agree that infrastructure be fixed before the implementation of the NHI.

Ms Clarke asked if COSATU’s members in the healthcare industry generally supported the Bill. What were their major concerns? What challenges and risks did COSATU anticipate with the management of the Fund, especially given the R13.3 billion that had been mismanaged by a variety of departments across the Country, as highlighted by the SIU’s COVID-19 corruption Report? COSATU mentioned various recommendations to increase taxes to support the NHI and compared South Africa to France. The success of France’s NHI Fund financing through taxes could not be compared to South Africa. She highlighted that the proportion of tax payers in each Country was disproportionate, and thus the two countries could not be compared on a tax financing basis. How could South Africa’s small tax base support such a large population? She asked if COSATU considered the possible negative effects on currency transactions for international investments.

Ms Wilson stated that there had been a systematic collapse of the public healthcare system in South Africa. Anyone in the Country, regardless of where they came from, were able to go to any public health facility, be it a clinic or hospital, to get healthcare at no cost. However, there were too few facilities and the quality of healthcare and supply of resources was lacking. What was the cause of the decline in healthcare? It should not have happened; it had impacted the poorest of the poor. Who was to blame for the state of the healthcare system? In light of the unemployment in South Africa, which was increasing instead of decreasing, how did COSATU anticipate it impacting the tax base, who would fund NHI, as well as the sustainability of the Fund?

Dr X Havard (ANC) asked if COSATU could elaborate why it would not support Value Added Tax (VAT) as a source of revenue for the NHI Fund.

Mr Sokatsha stated that the presentation was progressive and spoke to the poor of the country. The Committee had heard from those who did not support the NHI principle in general, that they would take government to the Constitutional court. What was COSATU’s response to these threats? COSATU’s support of NHI was noted, particularly the benefits of economies of scale, such as strategic purchasing. The Committee had been told that monopsony power would crowd out innovation – what was COSATU’s view on this? The NHI should not be subject to above inflationary costs from providers. The Bill outlined the role of the Healthcare Pricing Advisory Committee, supported by the Benefits Advisory Committee and the Office of Health Products Procurement (OHPP) in healthcare pricing issues. Did this not fully address COSATU’s concerns about tariff determination? He asked if COSATU had read clause 41. How had COSATU prepared its membership for the migration from the two tier system to NHI?

Mr Munyai welcomed the statement, that by failing to implement NHI, the workers were being ‘condemned to death’ through the burden of communicable and uncommunicable diseases. How would COSATU address the need for nationalisation and advancing universal healthcare coverage without NHI? During NHI, both the public and private sectors were overwhelmed - some people called for the urgent implementation of the NHI. What was COSATU’s view on this? Some people were calling for federalism in a unitary government state, which would require a constitutional amendment. What was COSATU’s view on the belief that the status quo should remain, that the R400 billion must remain in the private sector amongst private medical aids? He appreciated that COSATU wanted NHI implemented immediately.

The Chairperson asked a question about the primary healthcare approach. He would have assumed that COSATU was emphasising the importance of primary healthcare within the context of the NHI Bill and NHI. There was a particular clause in the Bill, clause 25(5)(b) of the Bill that stated that the Benefits Advisory Committee must determine and review the healthcare service benefits and types of services to be reimbursed at each level of care, from primary healthcare to tertiary care. There were preventative measures, to prevent corruption, and fraud as well as investigative measures. Did COSATU think that one team could do both the prevention and investigative work required?

Mr Parks stated that COSATU appreciated that space had been made for organised labour on the Pricing Committee and Stakeholders Advisory Committee. There was a need for labour and stakeholders to also be included on the NHI Board, which played a greater oversight and governance role. This would build inclusivity, transparency and accountability. It would allow stakeholders to take ownership of the NHI. COSATU wanted to see co-payments becoming a thing of the past. Co-payments were based on excessive charges, charged by providers. It ‘pick-pocketed’ workers for the benefit of an elite industry. There should not be a need for co-payments, this spoke to the need to manage NHI and prevent profiteering and excessive pricing etc.

COSATU agreed with the referral system, and the need to follow the required referral pathways. Economies of scale were important. Many hospital charges were unaffordable – which got dumped upon medical aid members. NHI would play a role in managing those excessive prices. This was an opportunity to build local manufacturing capacity. There was an opportunity to create jobs, there was no need to import what could be built locally. He emphasised the need for a procurement system that covered the entire State and was transparent. There was a need for the National Prosecuting Authority (NPA) and South African Police Services (SAPS) to do their jobs.

The Bill passed constitutional muster. The right to life and access to quality were not subject to limitations. Healthcare was fundamental to that. At the moment, 84 percent of society was being denied access to quality healthcare. Under NHI anyone who was legally in South Africa was entitled to universal healthcare coverage. For undocumented migrants, it spoke to emergency healthcare. One needed to strike the right balance, if one stated ‘healthcare for anybody in the Country’ one would open up a flood gate for people from neighbouring countries. It covered refugees, it spoke to undocumented migrants.

Universal health coverage had been implemented in various countries to great success without limiting a sense of choice. The issue around healthcare workers, spoke to the skewed distribution of resources. The overly-resourced private sector and the public sector, which provided for 84 percent of the Country, where there was a shortage of staff. South Africa spent about 85 percent of GDP on healthcare. 9.3 Percent of government’s budget was spent on healthcare. About three times more was spent on healthcare in South Africa than China. South Africa’s expenditure was similar to Brazil – but their life expectancy was better than South Africa’s. A disproportionate amount of expenditure was spent on the minority versus the majority of the population. There needed to be quality distribution of healthcare and resources across the Country. There were enough resources; the resources were not being distributed equally nor in a sustainable manner. Many healthcare workers were working in strained positions in the public healthcare system, where facilities were under-resourced, which encouraged workers to move to other countries to work. One also need to look at what healthcare workers were paid and how to attract and sustain positions. One could not expect healthcare workers to perform optimally when they were overwhelmed, working 48 hour shifts.

The status quo was not sustainable. One needed to be creative about how to sustain the NHI Fund. The public healthcare system was not in a good state. Before 1994 it did not exist for 90 percent of society. Government was not going to catch up, especially with the unequal distribution of resources. It was not sustainable. Both sectors needed to address issues.

Many workers spent huge amounts of money on out-of-pocket expenditure which put them into debt or inhibited them from getting the treatment they needed. How could a worker be productive if suffering from Tuberculosis (TB), when it was a preventable disease? How could Cape Town be the TB capital of the world, when it had top quality health institutions? It was not just a quality issues – the healthcare system was dominated by monopolies. There was excessive profiteering, especially amongst private medical aids. Many could not keep up with the medical aid tariff hikes.

COSATU had engaged with its members – healthcare was a sensitive issue. Workers had many questions and did not share a single view. Members were in very different positions, some on medical aids, some struggling with co-payment issues, some who could not afford medical aid. Many diseases were preventable or manageable – but people were being denied access to the treatment they needed.

He appreciated the work done by Parliament over the past two years. He hoped the process would be concluded by June the following year. Public hearings needed to be held at the National Council of Provinces (NCOP) level. He noted that there would be other bills that needed to come into effect following the implementation of the NHI Bill.

Primary healthcare was central to the NHI and its objectives. He suggested there should be two units, the fraud and corruption prevention unit and investigative unit – as these had distinctive roles which would need to be further clarified.

Presentation by the South African Communist Party (SACP)
Mr Tebogo Phadu, Executive Member, SACP, presented the organisation’s submission.

The SACP welcomed the NHI Bill, particularly as it was a direct response to and marked a decisive break from the present unequal two-tiered health system. By focusing the country on a major re-distribution of existing health care resources, the NHI Bill sought to ensure only access to good healthcare for all but also the general redistribution programme of existing resources of the Country. A system-wide, structural transformation approach was needed – one could not transform the public sector without transforming the private sector. SACP noted its support against ‘corporate state capture/corruption’ and ‘neo-liberal austerity.’

The SACP suggested that the Bill needed to clarify the interpretation of ‘private sector,’ which appeared to be ‘too vague.’ Actors in the broader health sector involved in socially-oriented activities needed to be distinguished from those profiteering in the private sector.

The Bill, called for comprehensive health services as opposed to a limited “health package”. However, SACP believed that such comprehensive coverage should be rooted in the primary healthcare approach that informed the health policies since 1994 (but was never fully implemented). As the “active strategic purchaser of health services”, it should be anticipated that the NHI Fund would be a prime target of forces of corporate capture and corruption in all its shapes and colours. The NHI Fund must have in-built mechanisms to fight corruption. This should include efforts to ensure greater transparency and accountability, including in the use of public funds and ensuring it is directed to those who need it most.

(See SACP presentation)  

Mr Munyai noted the differentiation of the private sector from the social sector – he asked how this should be affected in practice. In Japan, contracting the private sector was based on cost based investment, with no room for profit driven providers. How would the NHI emulate that of Japan – in contracting providers? He noted that many people argued that NHI was too expensive, he asked for comment on this. Some people argued that NHI would be an additional tax burden – he asked that this be commented on. Many people argued for universal health coverage, but not NHI – what was SACP’s view on this?

Ms Ismail asked if, under the Board’s current governance and organisational structure, the SACP recommended that the private sector be included on the Board to improve accountability and transparency of the Board. Did SACP recommend that there be parliamentary oversight to mitigate the threat of corruption? She noted that the Fund would be sourcing funds from taxpayers, and the tax base was incredibly small. Did SACP feel that the pool of taxes would be sufficient to carry the Fund. Were SACP’s members presently using public healthcare facilities or were they on medical aids? Would SACP’s members be willing to sacrifice their right to freedom of choice under the NHI? She noted the extent of medico-legal claims in the current system, would this be worse under the NHI? Considering the OHSC presently could not manage to monitor even 20 percent of healthcare facilities and that health facilities needed to meet certain compliance requirements, would this not stifle the provision of services to communities? Did SACP think that NHI would provide a health-value-based model and be sustainable. She highlighted the issue of corruption, namely the Digital Vibes scandal – what suggestions could SACP make to protect the Fund from political interference?

Mr Sokatsha stated that the presentation was very progressive and spoke to the needs of the country. What was SACP’s response to those who were opposed to the Bill, specifically the general principle of NHI? How did SACP respond to the suggestion that the NHI Bill would not pass constitutional muster and that some stakeholders had threatened to go to court? Everyone was free to go to court in this democratic country. These ‘noble courts’ however were being threatened on this issue – what was SACP’s response to this? With what should the public healthcare sector be fixed and people be employed, given the healthcare budget cuts? The Committee had complained about the budget cuts. What was SACP’s view on the right to economic activity by the private for profit sector and freedom of choice, as claimed by many who opposed the NHI? Would SACP regard these rights as superior to the constitutional right to access healthcare as stated in Section 27 of the Constitution and the right to life?

Ms Clarke asked if proof of address requirements would exclude the majority of the population from gaining access to the Fund. Considering SACP’s rejection of the new liberal approach to healthcare, looking at the history of the unsuccessful attempts of socialism and communism globally, what made NHI any different to the historically failed policies? What characteristics of the NHI would be successfully implemented?

Ms Gela agreed with Mr Sokatsha, it was a progressive presentation. Based on the comments made on slide 40, were there any additions proposed to clauses 19 and 57 of the Bill, which addressed the need for transparency and accountability to be central in the activities of the NHI Fund?

Dr Havard asked what SACP’s position was on the suggestion that government should first fix the healthcare system before the implementation of NHI.

The Chairperson highlighted the White Paper which spoke about the current specialised statutory pre-paid mandatory social insurances. It stated that during the transitional phase, alignment of the benefits, covered under existing mechanisms, would be aligned with the benefits of NHI institutional organisational reform. This was mentioned in clauses 57 and 58 of the Bill. Would this cover SACP’s concerns? What was SACP’s response to the statements that NHI would destroy the economy. This had been raised a number of times. What was SACP’s view on the socio-economic impact assessment that was done? Ha SACP looked at this for benchmarking economic growth and job creation in the implementation of the NHI.

Mr Phadu responded to the question about the private and social sectors. SACP put forward that there was not simply a public and private sector but also a social sector. The private sector was where there was for-profit. When one said ‘private sector,’ one automatically thought ‘business.’ It was important to differentiate. Much of South Africa’s legislation tried to recognise that it was a mixed economy. This was not to suggest that the social sector should be prioritised.

He noted that there were a range of questions and misunderstanding about the concepts of NHI and what it implied. It was captured in what Mr Munyai had said. The SACP was putting forward that social needs needed to be put above private profit. The only way to cover everyone equally was to place the health needs of the people above profit. That fell under the social rights in the Constitution. Otherwise only profitable patients would have access to healthcare. SACP was not suggesting that the private sector needed to be done away with – nor was the Bill. The way the private sector delivered healthcare needed to be changed.

Only the public healthcare sector could become the backbone, nowhere in the world had one found that the private healthcare sector provided universal healthcare to all. It had never happened. It was only through the state that it was possible. Proposals that the private sector could provide universal health coverage had no basis at all nor evidence.

The question of affordability and sustainability should be turned upside down – how could one make NHI affordable and sustainable? The current two tier system was not getting them anywhere. One could only finance universal health coverage through public financing.

A lot of noise or resistance came from those who benefitted under the present system. It was expected. One should engage and discuss their concerns, but those concerns should not undermine the core principles. The outcome of this process should centre around the core-principles that the NHI put forward. The alternative was not NHI, as universally understood.

He noted the suggestion that this was a socialist proposal – it was not only socialists who supported universal health coverage and the NHI. One did not need to be a socialist to be convinced that there needed to be healthcare for all – especially in South Africa where there was significant income and wealth inequalities. Good healthcare should not be dependent on the healthcare market forces. Socialist countries had been at the fore-front of advancing healthcare in the past, such as Cuba. The same could be said of advanced economies, it was the working class who called for their own national health insurance – such as the UK or Canada. The private sector did not play a significant role in those countries. He highlighted that the United States of America (USA) had one of the most unequal health systems in the world – where there was similarly currently a push for universal health coverage.

He responded to the question about the White Paper’s coverage of transitional measures to eliminate fragmentation of public health funding, such as medical aid, out-of-pocket expenditure and the Unemployment Insurance Fund (UIF). There was a small tax base but it was not a small economy in terms of wealth. There was already money spent on health – it might not be in the form of tax but it was money spent on healthcare. NHI was calling for the redistribution of resources to improve health outcomes. Surely, it could be made affordable. The most effective way of doing that was through a public finance mechanism. The current proposals in the Bill tried to do that. There was a lot of money that could be mobilised. 

General Matters

Ms Wilson noted numerous references had been made about healthcare systems in other countries. She asked if the trip to the UK to see the NHS and other systems in other countries, planned prior to COVID-19 under the leadership of the former Chairperson Dr Dhlomo, would still take place.

She noted that the Council for Medical Schemes had not presented to the Committee. She asked if the Council could present to the Committee on how the NHI would function in the long-term and their position on the NHI.

The Chairperson stated that he was in the process of looking at a visit to the UK and Thailand. The borders had only opened up recently, due to COVID-19. Discussions were taking place about this possibility. He was hoping this could be done before clause by clause deliberations took place.

As far the Council for Medical Schemes was concerned, every effort had been made to contact interested parties who wanted to present before the Committee. The Council had not indicated their interest in presenting, thus they would not be given the opportunity during these public hearings, but the Council would report to the Committee in the second quarter and one could ask their views on the NHI in that forum.

The meeting was adjourned.


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