National Health Insurance (NHI) Bill: Department of Health briefing; with Deputy Minister

NCOP Health and Social Services

07 June 2022
Chairperson: Ms M Gillion (ANC, Western Cape)
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Meeting Summary


NHI: Tracking the Bill through Parliament

The Department of Health briefed the Select Committee on the National Health Insurance (NHI) Bill. It said the Bill sought to establish and maintain a NHI Fund in South Africa to provide sustainable and affordable universal access to quality health services. A chapter-by-chapter outline of the Bill was presented.

The Committee raised questions regarding the source of the required funding and the tax implications for the working class. It also asked how the Bill would address the shortage of medical staff within the healthcare industry while ensuring that medical students could obtain the necessary training. How was the Bill going to deal with the poor response times by ambulances to medical emergencies?

The Department responded that some of the raised issues could not be addressed by statutes alone. It clarified that the changes being proposed in the Bill would take time to be fully implemented, but the Department would be able to achieve the goals sought.

Meeting report

The Chairperson opened the meeting by acknowledging the presence of the Deputy Minister and the Director-General (DG) of the Department of Health (DOH), the State Law Advisor and the Legal Advisor from Parliament. She emphasised that this was an informal meeting and expressed the Committee's excitement at being briefed on the NHI Bill, which promised to elevate the health sector to another level.

Deputy Minister's opening remarks

Dr Sibongiseni Dhlomo, Deputy Minister of Health, thanked the Committee for the opportunity to share what the NHI Bill sought to achieve in an informal setting. The DOH had the Bill as a priority in the Medium Term Strategic Framework of 2019 - 2024 and the annual performance plan (APP). The Bill was still at the National Assembly. The Department's strategic objective was to achieve universal health coverage through the implementation of the Bill. The Bill would be a policy shift that would ensure that all South Africans and residents, irrespective of their social and economic status, had access to good quality health services provided by both the public and private sectors. The Bill aimed to protect against financial risk when a person accessed health services.

Dr Dhlomo said the Bill looked at health as a public good. Government aimed to reorganise the health system by introducing several structural reforms through the Bill. The Minister tabled it in the National Assembly in August of 2019 and it was then referred to the Portfolio Committee [of Health]. The Committee had then conducted public hearings on the Bill in all the provinces, with at least four hearings per province. The Bill was currently with the Portfolio Committee and was being processed. If the processing went per the previous week, the Portfolio Committee would probably need one more month before bringing it to the National Assembly. Even before the formal presentation of Bill, the Committee had requested the Department to present it to them.

He invited the Director-General, or his appointed representative, to make the presentation.

Dr Sandile Buthelezi, Director-General (DG), DOH, said he was joined by Dr Nicholas Crisp, Deputy Director-General (DDG), and Dr Aquina Thulare, Technical Specialist on Health Economics for the NHI in the Department of Health.

National Health Insurance Bill: Department of Health (DHA) briefing

Dr Crisp said he would give the Committee a general overview of the contents of the Bill. He reiterated the Deputy Minister’s earlier statements that the Bill aimed to establish a fund which would be a legally defined organ of state. The Bill would establish this organ with its own functions, powers and duties, with the controlling/governing mechanisms of the board. The Bill outlined the composition of the board, the appointment of members of the board, how board meetings should be convened, as well as the appointment of committees of the board.

The Bill would also define who the beneficiaries of the services by the fund would be and who would be delivering the services. It would also allow the Minister to determine the healthcare benefits and committees that would advise the Minister on the same. The Bill had eleven parts which he would go through, noting that he had already explained the purpose and application of the Bill.

He explained that the Bill was structured in a single purchaser, single-payer model, which was done through pooling the funds by taking all the existing resources and putting them into one fund so that the fund could strategically purchase healthcare. This meant the strategic purchase of healthcare services and providers required to deliver the health services. These purchases would be made from accredited and contracted health care service providers.

The Bill would apply to all health establishments, excluding the military health services, which had their own services outside of the public space, and the State Security Agency (SSA). Once enacted, the Bill would supersede any other statute or provision on healthcare, except for the Constitution and the Public Finance Management Act (PFMA).

The second part of the Bill dealt with access to healthcare services and addressed population coverage and the registration of users. Concerning population coverage, the fund would purchase health coverage on behalf of South Africans, permanent resident refugees, inmates and specific categories of foreign nationals. The Bill limited the extent to which illegal immigrants and asylum seekers could benefit from the fund and provided basic health services for children.

Under the Bill, the users of the healthcare services would have the right to get quality healthcare services free at the point of care. Mr Crisp stressed that this right was one of the fundamental tenets the Department was trying to achieve through the NHI Fund. The users were also entitled not to be denied access to healthcare on any unreasonable grounds, and services must be provided within a reasonable time. The users could also lodge complaints if they were dissatisfied with the services being provided.

The Bill enabled the Minister to delegate central hospitals, where the most complex services would be provided, which would be semi-autonomous. The fund would be allowed to decline benefits, in which case it must provide reasons to allow the user to appeal against the decision. Dr Crisp emphasised that the key feature was that the cost to the patient must be zero at the point of care.

The fund would be established as a public entity in Chapter Three of the Bill, and it would not be able to trade but rather act as a facilitator of government business. The fund’s functions would include the active purchase of healthcare services, timely reimbursement of healthcare service providers, and monitoring the quality and standard of healthcare services. It would be empowered to negotiate the lowest price possible for services and goods and investigate complaints against the fund, providers and suppliers of services.

(See the presentation for details).

Mr Crisp emphasised that the Bill was intended to establish a universal healthcare system, not nine provincial ones. Once enacted and the relevant changes had been made to the National Health Act, the Bill would centralise the fund's functions nationally. Thereafter, the provider functions could be delegated to the provinces. The provinces would still have their stewardship duties, as well as responsibility for the management of ambulance services.


Ms D Christians (DA, Northern Cape) had several questions about the source of funds for the NHI Fund. Her concern was that, considering that the Bill was a huge project, whether there would be enough funds left in appropriations after the education sector had taken its quota. She asked whether the working classes be taxed on their salaries for the Bill. How did the Bill intend to deal with the current shortage of medical staff and those unable to complete their two-year training at hospitals? Concerning the poor maintenance of health infrastructure, she was worried that the centralisation of health services would take away from provinces that were doing well in terms of infrastructure maintenance, as well as their day-to-day business of running the health facilities. She questioned how the Bill would ensure that there was not a decline in the health clinics.

She expressed concern that the Bill had made no provision for people who wanted a second or third opinion. She asked if the Bill would deny citizens the option of choosing their desired health care provider. What would the composition of the investigation unit be and its duties?

Mr I Ntsube( ANC, Free State) commented on the claim in the presentation that there was a dissatisfaction with the accessibility and the quality of public health care. He sought to bring attention to the plight of a rural area called Butsabele. Four areas shared one clinic, with the hospital being a bit far away, around 20kms. He wished to raise a point which had already been rejected in the National Assembly, that a clinic must not be open for 24 hours. He stressed that South Africans were already suffering from the lack of adequate health care facilities, which would worsen if clinics operated on an eight-hour schedule. He also said there was a problem with a lack of ambulances in the Butsabele district hospital. The operating ambulances took too long to respond to emergencies or sometimes did not show up. Therefore, there was a need to reconsider opening clinics 24/7, as most people were unemployed and the hospitals were located too far away.

Ms S Luthuli (EFF, KwaZulu-Natal) said she shared the sentiments of her colleague, Ms S Lehihi (EFF, North West), regarding clinics, stating that the issue was very concerning, especially for people who stayed in rural areas. Even in her area, there was only one clinic being shared by various wards, and the waiting time was abominable. This was not because of the medical staff, but rather because the population being serviced was too large and the issue of response times of ambulances. In other areas, there were issues of lack of accessibility due to bad roads. A closer look at the issue of clinics and ambulances was therefore needed.

DOH's response

Deputy Minister Dhlomo, in response to the concerns raised by Mr Ntsube and Ms Lehihi, said that the Private Member’s Bill in the National Assembly had not been discarded because it lacked substance, but rather because it did not have any financial assessment data on the Bill's impact. Secondly, one of the plans of the DOH was to continuously improve and open up more facilities for 24 hours because of the comments made by Members. Part of the NHI Bill would impact the National Health Act, as well as the accessibility and availability of services.

He expressed condolences to Ms Luthuli on the loss of her brother through an accident, saying that there were only certain ambulances that would not go to ndwendwe and ndumbumbulu, except the public ones. The others chose not to go because of the wear and tear, which was a situation that needed to be addressed by requiring that ambulance services must not be divided into public or private operations but rather for citizens. He followed up by stating that emergency care was for all South Africans.

In response to Ms Christians' question regarding second and third opinions, he said that the NHI Bill envisioned a situation where any medical facility had gone through the accreditation process and was therefore certified as capable of providing a certain level of care. There would be an incremental assessment and support to all facilities to enable them to provide an ideal standard of care, which would also deal with the issue of poor maintenance. Further, he referred the Committee to a document known as the Presidential Health Compact 2019, which stated that South Africans were complaining about poor staffing and structures and a host of other issues, and also asked what the Department’s plan was to change the situation. This health compact plan was the Ministry’s sounding board which they always used to determine how far they were from achieving the goals that all the stakeholders had collectively agreed on.

Dr Crisp said that health systems were complicated and could not be easily rectified through the implementation of, or changing, a piece of legislation. He acknowledged that the design currently in place was a complicated and inequitable one, and the Department's aim was an efficient one. He gave an example of the current nine provincial departments that copied each other due to how the budgets were allocated. This resulted in the duplication of tests and medicines, which was inefficient. The private sector had 76 medical schemes, with each having an administration whose costs were very high. The estimated administrative cost was 15% of everything that the members paid. There was, therefore, a need for equity and redistribution of what the Department had at the moment. The Bill would achieve this over time, but not overnight, which was where the focus should be.

In response to Ms Christians' question regarding funding and appropriations, he said that in 2022, R290 billion was being paid in tax, together with the appropriations that went to the provinces through the provincial equitable shares and the conditional grants that Parliament was appropriating for the Department one way or the other, while channelling the same through the public health system. There were also tax credits amounting to R 34 billion -- money going through the Road Accident Fund (RAF), among others. There was, therefore, a lot of money already in the system, and the starting point was how to use the money more efficiently and provide access to underused resources.

In response to whether the working class would be taxed, Mr Crisp said that in time this would happen, but the same may be done through an increase of value-added tax (VAT), a change in general taxation, or adding a payroll tax. He said that the wealthy were highly unlikely to pay more for their healthcare than they already did upon enacting the Bill.

Responding to the issue of shortages of medical staff or graduating and not being accommodated in the system, Mr Crisp said that the Department was also anxious about this. The DOH had, over the years, put in motion programmes that increased the number of graduates available for absorption into the system. These programmes had taken time owing to the length of study by doctors. They had started to improve only when the economy had tightened and the budgetary allocation had been reduced. Fortunately, the Department had been given an additional appropriation which they hoped to use and improve on the issue of accommodating graduates in training. He promised that the Department was ready to do what was necessary to ensure medical professionals did not leave the country in droves. The problem was the lack of money to pay for the vacancies. There was an increased dependency on public healthcare providers due to the loss of employment, worsened by the decreasing health budget. The budget decline had also affected the maintenance of facilities. He agreed with Ms Christians that this was an area of concern that the Department was trying to collaborate with the provinces to fix.

Mr Crisp said the ideal clinic programme was intended to improve the quality of what was already in place through the conditional grants the Department had had for a while. It was therefore working on getting additional clinics where they were needed. While addressing the issues raised by Ms Luthuli and Ms Lehihi, he said that the Department was aware of the deficiency plaguing many communities, especially where these communities were growing. There was a plan in place to address the issue and the quality. This was not an issue that the National Health Insurance Bill could fix but could be addressed through programmes with the available funding for capital works.

Mr Crisp said the current public health sector accommodated the second and third medical opinions sought by Ms Christians, and he saw no reason as to why that could not be designed into the NHI Bill. The intention of the Bill was not to straightjacket the citizens but to ensure that everyone received proper healthcare and was not victimised because they were poor -- which was the effect of the current system. The Bill did not remove the people's power to choose their preferred health care service provider. Referrals from a primary health care facility would be to an accredited medical centre with the necessary skill and equipment to deal with the patient's ailments. There was a need to build sufficient public and private accredited facilities with the requisite capability.

Mr Crisp said that the investigating unit in the Bill was designed to investigate complaints by citizens, which would not take away from the functions of any other public body tasked with dealing with complaints. The fund would be responsible for looking after the services paid for by the fund, hence the need for an investigating unit that would deal with complaints. The regulations would determine the standard operating procedure for this unit.

Dr Thulare sought to respond further to Ms Christians' question regarding infrastructure and her concern that the Bill would take away from provinces already doing well. She said that the Department's position, in its presentation and the amendment to the National Health Act, was that infrastructure maintenance would still be the provinces' function. Only the services being offered would be re-delegated back to the facilities that were going to be offering them. She highlighted that the National Health Act already designated central hospitals to the national sphere in its current form. It was, therefore, not a new thing that the Bill was brought up but something that already existed in law. The NHI Bill sought only to emphasise the move of central hospitals to the national sphere because the DOH wanted these hospitals to benefit the entire country as platforms for delivering services and for research and training. These central hospitals needed to be accessible to the rest of the nation and not confined to one province.

The Chairperson thanked the Deputy Minister and the Department of Health for their presentation and responses to Committee questions. She said that the meeting gave insight into what to expect once the Bill was formally presented. She asked whether any of the Committee Members had further questions before excusing the Deputy Minister and the Department.

Mr E Nchabeleng (ANC, Limpopo) apologised, as he had been out of the meeting for quite a while due to network issues. He was worried about how the decreasing budget would affect the actualisation of the Bill, which was a question he was sure had already been answered. He hoped this briefing was not the last the Select Committee would have on the Bill. He expected future engagements on the NHI Bill would enable the stakeholders to focus on the central issues, to the well-being of the fund itself.

The Chairperson said that the question regarding budgetary issues had been raised by Ms Christians and had been fully covered. The Committee was cognisant of the network issues that Mr Nchabeleng was consistently experiencing due to his location. She again thanked the Deputy Minister and excused the Department from the meeting so that the Committee could deal with in-house business.

Adoption of Committee minutes

Minutes dated 24 May 2022

The Chairperson said the minutes had been sent to all the Members, so she would not read through them page by page. She asked the Members to point out any corrections that needed to be made.

No amendments were made.

The minutes were adopted.

Minutes dated 31 May 2022

No amendments were made.

The minutes were adopted.

Report of the Select Committee on Health and Social Services on the Annual Performance Plan (Budget Vote 20) of the Department of Women, Youth and Persons with Disabilities for Financial Year 2022/23

The report was adopted

The meeting was adjourned.

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