National Health Insurance (NHI) Bill: Clause 48 to 51 deliberations

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26 October 2022
Chairperson: Dr K Jacobs (ANC)
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Meeting Summary


NHI: Tracking the Bill through Parliament

In this virtual meeting, the Committee continued its clause-by-clause deliberations on the National Health Insurance (NHI) Bill. During the session, Members deliberated through Clauses 48 to 51, to which the majority party, the ANC, agreed to in totality. However, the DA, EFF, and FF+ rejected all or most of the clauses, with their main criticisms focusing on the following concerns:

Clause 48: Lack of a feasibility study

Members of the opposition were concerned that no feasibility study or test had been done to determine the exact costing model, and whether Parliament and Treasury were able to provide such funding without jeopardising the quality of healthcare.

The ANC was of the view that issues related to equal access to healthcare were not issues of mere cost because life was more important. Members of the party emphasised that the conversation around the implementation of the bill could not be limited to cost issues. The cost associated with the implementation of the Universal Health Coverage Programme was influenced by many factors, including the design element and the pace of implementation. They suggested that it would be better to frame the question around the implications of the different scenarios for the design and implementation of reforms to move towards universal coverage, rather than around costs. They also asserted that South Africa was not short of money, and funding the NHI was rather a question of redistribution of funds

Clause 49: Overburdened taxpayers                                                                                                                                               

 In response to clause 49, Members of the opposition pointed out that the unemployment rate was at 34.9% during the third quarter of 2021, and that there were 30 million people living from state grants out of a population of around 58 million people. This indicated that the NHI system could not be a tax-funded system. 

Debate on existing universal healthcare in South Africa                                                                                      

The DA insisted that South Africa already had universal health coverage, so the NHI was not a myth. The only problem was that the current healthcare system lacked quality. The government could not deliver the appropriate healthcare, and they would be misappropriating funds and taking excessively from taxpayers. They argued that billions had already been spent on an unconstitutional Bill and employing staff to manage a Bill that had not even been passed yet. They believed the billions spent on the Bill could have been used to invest in improving or upgrading existing healthcare facilities and systems across the country, ensuring that there was medicine stocked up and hospitals were adequately staffed.

However, the ANC insisted that the bill had the potential to change lives by creating equal access to healthcare services across the country, where everyone would be subject to the same system of healthcare. They urged Members who opposed the bill to think outside of the box and take a more positive view when looking at the bill. It was important for Members to note their privilege in the conversation and understand that just because they could access private healthcare, the same could not be said for the majority of poor South Africans who deserved better facilities as well.

They said apartheid had denied the black population access to better health facilities by reserving the best services for whites only, and explained that the unequal society that they were attempting to eradicate had existed for over 350 years, and the democratic government had had only 30 years to try to undo the centuries of work that had embedded inequalities in the country.

Meeting report

Clause 48: Financial Matters

The Chairperson took the Committee through clause 48 of the Bill.

Ms E Wilson (DA) read the commentary from the Davis Tax Committee reports from 2017, which stated that the large degree of uncertainty and lack of common understanding of how the National Health Insurance (NHI) would be implemented and operated was concerning. The concern particularly stemmed from the magnitude of the proposed reform in light of the projected funding shortfalls, substantial increases in value added tax (VAT) or personal income tax (PIT), and the introduction of a new social security tax, which would all be required to fund the Bill.

The report also mentioned that the magnitude of the proposed fiscal requirements of the Bill were so large that they would require trade-offs with other admirable National Development Plan (NDP) programmes, such as expanding access to post-school education, security, and social security reform. Given the current cost parameters outlined in the white paper, the proposed NHI in its current format would probably be unsustainable unless there was sustained economic growth. Keeping all of this in mind, she said that the NHI option, even with a minimum benefit-cost at the lowest level feasible, appeared to be unaffordable in the medium-term. She added that overall health expenditure would rise to exceed 11.3% of South Africa’s gross domestic product (GDP) if the NHI was implemented.

She noted that the initial estimate for the Bill was around R256 billion. This figure was very concerning because there had been admissions surrounding that initial figure, stating that it was a mistake. She quoted a passage from the Davis Report that mentioned that the World Bank and the World Health Organisation (WHO) were unable to understand why the Davis Commission was attempting to quantify the implementation of the NHI, as it could not be quantified by any human being because the costs were so variable.

She added that, given the billions that had already been spent on the NHI, be it in the form of grants or any other form, there was nothing to show for all that money spent because there was still a lack of improvement in the healthcare system. Also, there was yet to be a feasibility study or financial study done to tell the Committee exactly how the Bill was going to work and the exact costs to implement it.

Until such time that someone could indicate where the money would come from, how much was required, how the funds would be utilised, and the feasibility of the Bill, it was not possible to support the Bill. She said that the country was in a dire state. Unemployment was at its highest, the cost of goods and services had escalated, and the country had more people on social grants than ever before. Taxpayers were barely able to survive in the current economy, yet in spite of this, more money was required from them to fund the bill, at the risk of impoverishing them. This was unacceptable, and the bill should not proceed until such a time the Committee received an indication of a feasibility study and what the actual costs would be to get the NHI off the ground.

Mr T Munyai (ANC) said he was not prepared to engage on the austerity measures of the IMF and the World Bank because they did not work in Africa and in Latin America. Both the IMF and the World Bank had also admitted that the austerity measures could not be applied to Africa and Latin America. He would rather focus on what the NHI had to contribute, rather than quoting rhetoric from the lobby group which did not support the NHI.

He submitted the ANC’s support for clause 48. He explained that the question relating to how much it would cost to implement the NHI and what the source of revenue would be was not the appropriate question to ask at this stage, because many countries had implemented a similar programme after experiencing the devastating effects of the Second World War. He used the United Kingdom and Japan as an example. In the United Kingdom in 1948 and Japan in 1961, the World Health Organisation cautioned that while cost assumptions and scenarios were useful for raising core policy issues regarding the sustainability of reforms, it was not useful to focus on the exact figures of an estimated cost. This was because evidence had shown that countries that had gone down this path had ended up tied up to endless cycles of revisions and reflecting on carving out new revenue resources.

He emphasised that issues related to equal access to healthcare were not issues of mere cost, because life was more important. The cost associated with the implementation of the Universal Health Coverage Programme was influenced by many factors, including the design element and the pace of implementation. It would be better to frame the question around the implications of the different scenarios for the design and implementation of reforms to move towards universal coverage, rather than around costs.

He said that South Africa had a two-tier healthcare system where, on the one hand, one of the tiers serving a small fraction of the population got a lot of money and as a result could save many lives, while on the other hand, there was a tier that served the larger population yet received the least support. He concluded that the issue around reforming equal access to healthcare for all South Africans should not be limited to cost.

Mr N Xaba (ANC) concurred with all sentiments expressed by Mr Munyai, further adding to the reasons why the ANC was in support of clause 48. He explained that the political party supported the Bill because there were many factors that influence health expenditure. These included trends in population health services that needed utilisation. Health expenditure also depended on the supply chain, the availability of health facilities and professional personnel, as well as the price of supplies and services. He added that there were also policy options that would impact costs, which included the range of private service providers from whom services were purchased, and investment arrangements. Costs would also depend on the extent to which economies of scale were achieved through active purchasing and effective cost controls.

Ms M Clarke (DA) said she did not understand the logic behind being told that there was no need for a budget to provide services. Money was essential for providing anything in this life, and perhaps it would be a good idea to invite the Finance Minister to explain to the Committee how the NHI would be funded. She had already sent a message in writing to the Minister and the Committee requesting a meeting with the Minister to discuss the source of funding. She asked what budget needed to be put in place to deal with the healthcare conditions in the country because it was necessary to repair and restore the current conditions in the system before implementing any other new policy reform.

She pointed out that no feasibility study or test had been done to determine the exact costing model and whether Parliament and Treasury were able to provide such funding without jeopardising the quality of healthcare. She commented that it was important to ensure the current conditions of universal healthcare in the country were upgraded because it was unacceptable to have people dying in hospitals because of malpractice. She added that clause D was extremely vague, because if certain money that was paid to the fund would be non-refundable, there needed to be a clearly defined list of what circumstances this would be applicable to, otherwise it would give the Minister discretion to decide whether any money paid by accident would be refunded. Whether money was refunded was a question of law. She requested that the subsection be deleted in its entirety and that even if money was paid erroneously to the fund, which it may be entitled to keep, it could not be classified as a revenue source.

Ms A Gela (ANC) was in accordance with Mr Munyai and Mr Xaba’s opinions about the clause and their reasons for supporting it. She explained that the NHI would repossess the bulk of the existing budget and add to whatever shortfalls there may be. Parliament approved the budget on an annual basis, so there was no need to approve the NHI budget now because it would be done when the Minister of Finance tabled the budget. It was a bit premature to ask for the costs before the Minister had tabled the budget in Parliament. She said the only solution to saving the lives of people in the country and addressing the healthcare issues was the NHI. They had a responsibility to represent the mandate of the people and after engaging the citizens, the citizens had expressed that the NHI should have been implemented by now. She said that by arguing back and forth about the Bill, it appeared that they were not taking the citizen’s mandate seriously. She concluded by stating that they had to ensure that citizens had equal access to the safest healthcare system.

Mr E Siwela (ANC) supported the contributions raised by Mr Munyai, Mr Xaba and Ms Gela. On the questions relating to where the money to fund the NHI would be coming from, he answered that all the government's programmes and policies were paid from the taxpayers.  

Dr S Thembekwayo (EFF) cautioned the Committee against disregarding that the proceedings were hybrid -- both in-person and virtual -- because there were unforeseen circumstances that prevented the other participants from attending. She asked the in-person Committee Members not to forget about their virtual presence and to keep them in mind as the proceedings continued.

On clause 48, she said that the success of the NHI was dependent on budgetary matters, so it would be counter-productive to pretend that budgetary matters did not play a prominent role. She reminded Members that they were all representatives of South African citizens -- Members who agreed with the NHI and those who did not. They were representing citizens from different positions, citizens who agreed with the NHI and citizens who did not, which meant that they were not speaking from one direction.

She said there was a lack of information on the level of financing and the flow of money within the NHI. She suggested that a transparent and detailed financial model would resolve this challenge. Concerns had also been raised around the centralised procurement of health services, which would certainly compromise accountability and undermine the role of other spheres of government. She wanted to know how taxpayers would be impacted by the NHI and how sustainable it would be, given the fact the NHI Fund would be collected through several taxes that included general tax, medical schemes, tax credits, and personal income tax.

She reminded the Committee that it was common knowledge that the Department of Health suffered from poor management and in light of this, how could they be expected to control financial matters? The whole Department suffered from gross inefficiency, wasteful expenditure, and corruption which had been detailed in the most recent reports of the Auditor-General (AG). She was concerned that clause 48 would simply create further opportunities for a currently corrupt Department to continue its corruption. She requested that clause 48 in its entirety be deleted. She submitted that the Economic Freedom Fighters (EFF) did not support the Bill.

Dr X Harvard (ANC) indicated that she supported Mr Munyai’s submission, and Ms Gela and Mr Siwela’s contributions and input related to clause 48. She confirmed the ANC’s support for the Bill.

Mr P van Staden (FF+) was in accordance with Ms Clarke’s suggestion about the Minister of Finance addressing the Committee on the financing of the Bill. He reminded the Committee that in July 2019, the Cabinet had requested a new plan for financing the NHI, but up until today there had been no further information regarding the matter. He acknowledged that life was important, but at the same time, it was also necessary to understand that it cost a lot of money to provide adequate healthcare to citizens. He added that South Africa could not afford to fund the Bill because it did not have the money to do so. He explained that the reason that South Africa did not have money was due to corruption, which had collapsed the public healthcare system.

He indicated that he did not see how the NHI would work if the dilapidated healthcare system was not repaired, if proper attention had not been given to the public health sector, and if a proper financing model by the Cabinet had not been provided to the Committee and South Africans before initiating the Bill. He reiterated that corruption, fruitless and wasteful expenditure had to be addressed and eradicated completely before the Bill could be implemented.

Ms H Ismail (DA) highlighted that South Africa already had an equal healthcare system for everyone. It was just a matter of choice whether people opted for private or public healthcare. If it were not for the private healthcare system complementing the public healthcare system, there would be many more lives at stake. She expressed her concern about where the money would come from to fund the Bill.  Also, she agreed with Ms Clarke’s suggestion to invite the Minister of Finance to come before the Committee to discuss the financing of the Bill.

She said that a good healthcare system looked at service delivery, infrastructure, and sufficient doctors and nurses. The crux of the matter was that South Africa did not have any of these elements.  There were insufficient healthcare providers, a shortage of 27 000 critical skills in the healthcare sector, and infrastructure challenges. She added that at the NHI public hearings it had been stated that the NHI was a good system, but the inefficiencies of the current healthcare system had to be solved.

She asserted that in any scenario there had to be a proper plan of action, and the most important aspect of any plan of action was a budget, so without a proper financial feasibility study on the NHI, the country would not be moving forward. She said universal healthcare was ideally a perfect scenario that everyone would enjoy, but in South Africa's current circumstances, it would not work. The AG's report stated clearly that the Department had regressed, and that corruption and mismanagement were taking place with zero consequence management measures in place. Considering the amount of medical-legal claims, and the backlog of surgeries, this pointed to trying to bite off more than one could chew.

Ms Wilson said that the aim of universal health coverage was to give everyone access to equal and quality healthcare. She questioned where in the country people did not have access to public healthcare facilities, because if there was a place where people were denied the right to get healthcare, they would have to deal with it at the appropriate level. She said that South Africa did in fact have universal healthcare. There was not one person who would be denied healthcare if they went to a public healthcare facility, and this was the epitome of what universal healthcare was. The only difference was that citizens should have access to quality universal healthcare, which was what they lacked. She emphasised that the answer to quality healthcare was not in the NHI, but rather in the proper management of health budgets.

She added that billions had already been spent on the unconstitutional Bill and employing staff to manage the Bill, which had not even been passed yet. Those billions spent on the Bill could have been used to invest in improving or upgrading healthcare facilities and systems across the country, ensuring that there was medicine stocked up and hospitals were adequately staffed. The collapse of healthcare in South Africa was due to mismanagement and corruption which the Bill was not going to solve.

The insistence on continuing with the Bill was just an opportunity to have taxpayers' hard-earned money mismanaged and thrown down the drain by a minister and ministers before him who had failed to fulfill their responsibilities to those who were ill. She questioned why they would want to give the minister more money to mishandle. She concluded by reiterating that the country did have universal health coverage -- the issue was that it was not of sufficient quality, and the Bill was incapable of changing this.

Ms Gela said the Bill should have been passed last year, but the delay demonstrated how Members did not care about the poor. Members were just pretending to represent the interests of the people, yet they were not. She reiterated their support for the Bill and the fact that they had no intention of changing anything in clause 48 because it was all relevant. She said the EFF never supported anything that they brought forward to improve the lives of South Africans, although they claimed that they stood for the poor.

She said that the NHI would operate within the budget and that it was designed to be far more efficient than the current health system. She clarified that the country had R500 billion in the current health system, and only R250 billion had been spent in the public health system. Unless they integrated the funds available, the country would continue to experience unequal health services, where the poor accessed public health and the rich accessed private health, which was a legacy of apartheid. This needed to change so that everyone benefited equally.

She said that users of the public sector in rural areas did not have access to doctors and advanced medical technology for treatment, while those who lived in the urban areas could access doctors and advanced medicine and technology readily. This was a result of separating the public sector from the private sector. The inequality between the sectors had to be addressed.

Dr Thembekwayo responded to Ms Gela’s criticism about the lack of concern for the poor by non-ANC Members due to their opposition to the Bill, and said that the NHI Bill was the responsibility of the Minister of Health, and that they were expressing their comments and responses to the Minister, and not to one another as Committee Members. She expressed her frustration regarding the way that Members were engaging and disapproved of the taunting by Members of the governing party.

Mr Munyai said that to implement the NHI policy, there was no need for the country to be rich. He made an example with the UK establishing the National Health Service (NHS) in the wake of World War II. The UK had been able to establish universal coverage for its people during the devastation. He pointed out that the aim of the Bill was to reform the old apartheid two-tier healthcare system. The country needed one health policy and not two separate healthcare systems. He indicated that South Africa was not short of money -- the issue was that most of the funding was directed to the private sector, which was serving a small fraction of the country. He reiterated Mr Siwela’s comment, explaining that the money would be coming from taxpayers.

The Chairperson said that the clause indicated that there would be a mix of revenue that would meet the principles of the NHI. Those principles included solidarity, the right to access, equity, efficiency, effectiveness, affordability, and appropriateness. South Africa had a history where people were not granted the opportunity to have a better life and be able to access healthcare where they were living. If one tried to imagine it, one would not be able to fathom how difficult this may have been for the person who was ill and in need of healthcare, yet unable to access healthcare.

He said that the NHI was trying to achieve the principle of all people being able to access quality healthcare. For this to happen, funds would be required, and for there to be funds the Bill needed to stipulate how the funds would be acquired for this particular purpose. It did not make sense to exclude the clause, because how would one be able to do what was right for all people?

He reiterated that for the feasibility of the Bill, there had to be a diverse and interrelated set of sources of financing, and that financing should be able to meet the responsibilities as outlined in the preamble, as well as outlined in chapter 3, especially clause 10 and the subclauses. He added that the funding mechanism itself must be sustainable over a long period. It must ensure that the NHI's reforms were appropriately funded and whether those tax design objectives, whatever they may be, corresponded closely with the guiding principles of the NHI.

Ms Clarke was relieved that the Chairperson, in his clarifying statement, had emphasised the fact that the conversation about funding and budgets was a necessary discussion to have, despite some Members’ remarks about costs not being an issue that needed to be delved into. She insisted that they had to have the funding model to produce what was needed. She noted that the current government had had 30 years to improve the universal healthcare system in the country, so it would be facetious of Members to insinuate that Members of the opposition parties did not care enough for the poor whereas it was the party in the driving seat that had not succeeded in ensuring equal quality access for all citizens. She encouraged Members to be on the ground more often in hospitals to understand the real problems.

She said she had taken the woman who worked for her to the hospital because she had been in terrible pain and needed to see a specialist. The hospital had an appointment available for her only in April of next year. These were the kinds of problems that people in the country were subjected to. She commented that South Africa had not yet achieved quality universal healthcare, and was far from it.

Ms Wilson said they were very excited at the court’s ruling that a certificate of need, which was the cornerstone of the NHI, had been declared unconstitutional and invalid. What was quite concerning was that the Department of Health spokesperson had highlighted the serious implications of the judge’s ruling on the NHI. She commented that although they were trying to push the Bill forward, it was in fact going backward according to the Department of Health.

She said the NHI Bill was going to cause some serious problems because it would require the country to change many other Bills to accommodate its aims. She addressed Mr Munyai’s illustration about the lack of equal access to healthcare, as private hospital ambulances refused to pick up poor patients in instances where a car accident had taken place. She responded to this by asking where the public service ambulance was, and why it was not picking up patients who were entitled to its service. She emphasised that the quality of healthcare needed to be addressed long before attempting to deal with the Bill.

Ms Ismail said that expecting taxpayers to fork out more money to fund the Bill would be too burdensome of an expectation for taxpayers. She reminded Members that the country had a high unemployment rate and more and more citizens, especially after Covid, had to depend on South African Social Security Agency (SASSA) grants. She asked the Members how they expected citizens to fork out more money when it was clear that they were struggling to make ends meet.

The next issue she dealt with was about the money allocated to the current healthcare system, which had been mismanaged. How could Members expect taxpayers to provide more money when there was a possibility that more money would be mismanaged? She pointed out that the root of the problem, which was corruption, was not being addressed.

She said that her three daughters had been involved in a car accident on Sunday morning, and if she had not called ER 24 and had instead waited for a public emergency service to respond to the scene, she probably would have lost a child. Her point in detailing this experience was that quality healthcare service was lacking, and considering this, how would citizens and Members know for sure that once the NHI was effectively implemented, it was going to service communities when the core issues -- corruption, mismanagement, and poor healthcare service -- had not been dealt with. She reiterated that the country did have universal healthcare, but it also had a democracy that made it possible for people to choose whether they wanted private or public healthcare. She added that no one would want to pay expensive fees at a private hospital if there was an efficient public healthcare system.

Mr Xaba said they were not in attendance in order to deal with the financial and budget details -- the focus was on health provision. He maintained that South Africa was not short of money, and that it was rather a question of distribution of funds. What was important was that Members had to understand that the NHI was a priority and had to be funded. He added that the ANC was not purely dealing with 30 years of unequal access -- the inequality dated back to 350 years, and what they were attempting to fix where the injustices of the past.

Clause 49: Chief source of income

The chairperson took the Committee through clause 49 of the bill

Mr Siwela said the ANC supported clause 49 because it incorporated the principle of social solidarity, which was defined as providing financial risk pooling to enable cross-subsidisation between the young and the old, the rich and the poor, as well as the healthy and the sick. This was consistent with the spirit of Ubuntu, which was the cornerstone of their lived values as a country, and in the constitution.

The ANC also supported the clause because it aimed to mobilise funding from various sources and integrate them into the NHI Fund for the purpose of creating a single fund that digitally purchased personal healthcare services on behalf of the population. The reallocation of funding for medical schemes and tax credits, as provided for in clause 2(a)(1), was particularly supported because it contributed to redistributive justice and thus promoted compassion, reciprocity, dignity, and amenity by moving resources from the better off to meeting the health needs of the more vulnerable sections of the population. This would help redress the historical divide between the private and the public sectors and the inherent inequities that characterised this duality.

Mr Van Staden indicated that the Freedom Front Plus believed that the NHI system would not be sustainable considering the unemployment rate at 34.9% reported during the third quarter of 2021 and 30 million people living from state grants out of a population of around 58 million people. This indicated that the NHI system could not be a tax-funded system. This is because the economy was declining year after year, so more and more people were losing their jobs and many even ended up homeless. As a result of this, the income tax base was getting smaller.

The percentage of people who had been unemployed for a year or longer had increased by approximately 60% over the last ten to 13 years. It was a clear sign that South Africa’s economic decline had been brought about by poor governance and reckless policy decisions. These were the reasons why the number of despairing job seekers, who have increased by 62000 between the third and fourth quarters of 2019, was still on the rise. Poor economic growth and a government policy like expropriation without compensation, the NHI bill, poor service delivery, load-shedding, and the collapse of local government, were all factors contributing to the unemployment crisis in South Africa.

He added that the previous Minister of Health had admitted that the economy was a matter of concern. In terms of section 49(2)(a)(i), the Fund was entitled to general tax revenue, including the shifting of funds from the provincial equitable share and conditional grants into the Fund, as well as reallocating funding for the medical scheme tax. In light of the report issued by the Financial and Fiscal Commission (FFC) in 2019 to the Committee, it was clear that there was no proof of a funding model for the NHI.

He said that South Africa was not politically and economically stable. State hospitals were plagued by mismanagement and corruption, and were not up to standard. There was no guarantee that the NHI system would be a system without any corruption. He commented that if the NHI were to be the sole healthcare service provider and it collapsed, it would leave 58 million people without medical treatment.

Ms Clark reiterated Mr Van Staden’s concerns over how it would be possible to fund the Bill with taxpayers’ money in the middle of an economic decline. She said the NHI bill would likely end up in a similar situation as most state-owned enterprises (SOEs) in the country, and the state would have to bail the system out of debt. The Committee could not blame people for being wary about how the Bill would be structured. She reiterated the fact that the economics were very important, yet they still had no clue how the funding model was going to be structured.

She mentioned that the Act could not regulate how Treasury was to disperse funds, because this had to be contained within a section 77 money bill. Referring to the medical scheme tax credits (MSTCs) in subsection (2)(a)(ii), she stated that this was incorrect. MSTC were credits that determined the amount of tax payable by an individual, and not money paid to a medical aid scheme. She added that if this was not the case, then the section needed to be redefined to bring clarity as to what amounts it was referring to.

She said that redistributing medical scheme tax credits from an individual would result in each person paying at least around R4 164 of tax per year for those on medical aid, and this would likely increase depending on the number of dependants one had. The subsection would result in taxpayers paying more tax per month and per year during a time when they were already struggling to afford access to generally poorer quality services. The effects of these three subsections would essentially be applying three further tax burdens to an already decreasing tax base. She emphasised that the model was not sustainable and that one would be seeing more people financially emigrating from South Africa to avoid these ludicrous tax hikes in the country. The tax burdens would not only drive away taxpayers but would also drive away the skilled medical staff in private practice who would opt to leave the country for greener pastures.

She said it was necessary to have a financial feasibility study that would demonstrate whether it was fiscally feasible to raise taxes to the levels required for a monopoly purchase. The study had to also demonstrate that it was possible to guarantee social protection for the entire population without diminishing any person’s current legitimate rights to health coverage. She added that if any person’s access to health was threatened or undermined without a rational public purpose, this could be deemed reckless and irrational. The attempt to replace medical schemes as purchases of careful families with adequate incomes was also implausible and was fiscally unobtainable. The government probably understood these risks, which was why it would not release into the public domain any financial feasibility assessment at that stage.

Ms Ismail said that clause 49(2)(a) of the bill stipulated that the NHI did not provide reliable amounts of costs, as a new or current financial feasibility study had not been done. She inferred from this that the Committee had no idea how much the NHI would cost the taxpayer. She emphasised that the issue with the present healthcare system was not funding, but rather the mismanagement of funds, cadre deployment, and lack of accountability. She added that clause 49(2)(a) stipulated that the funding of the NHI Fund was through income tax, general taxes, and medical scheme tax credits. These could be levied only by a money bill under section 77 of the Constitution, which would effectively render the section unconstitutional again. To provide clarity on the invalidity of the section, she requested that the Committee's legal advisors expound on the section when they came back to the Committee.

She said the bill did not provide detail on the funding of the NHI, and it appeared that all regulations were being left to the Department of Health to handle after the bill was passed. She equated this to putting the cart before the horse because it gave the impression that the Department was unaware of what they were getting into, and that decisions would be made along the way. This was unacceptable because taxpayers deserved transparency and accountability on all aspects relating to the money spent by the Fund. Another point she raised returned to the idea that the bill remained unconstitutional and would be too expensive to implement, especially in the current economic climate.

She expressed her concern about the status of the country’s fragmented healthcare system. She said it did not offer quality and equal health services as planned by the NHI. Without a financial feasibility study, she doubted whether the NHI would be able to afford to resolve the issues in the current healthcare system.

She said the NHI stipulated a single purchaser system but did not specify how medical technologies would be incorporated and how they would be funded. This demonstrated that no one knew how the NHI would be operated. The Fund was also not specific in addressing donations. The proposed taxes on employers and employees would place an already heavy tax burden on a fast-shrinking tax base. The medium-term budget policy statement (MTBPS) stated that the proposals in relation to the funding of the NHI were not feasible, which essentially meant that the aim of universal healthcare would not be reached by the NHI.

Ms Wilson noted that clause 49(2)(a) mentioned that funds would be appropriated from money collected in accordance with social solidarity. She commented that basing the appropriation of funds on social solidarity was questionable because now the country was frustrated because of issues such as poverty, water access, load-shedding, etc. She also pointed out that the bill was taking away the role of provinces without any studies and without any idea of how it would be managed, which indicated that the function of provinces would be undermined.

She requested that the notion of general tax revenue be expounded on because it was too vague. If the NHI was going to work, VAT would have to be increased to at least 20%. This would cause an uprising, contrary to the social support that was envisioned. She questioned the constitutionality of the reallocation of funding to medical scheme tax credits and was confident that this was a matter that would be challenged in court. She emphasised the fact that there were not enough people employed in the country to pay tax, and those who were employed were struggling as it was to keep up with rising interest rates and the cost of living.

Her next point was that NHI would not be passed until all the acts and bills it had an impact on were altered first. The process would require public participation, legal opinions, and oral presentations. The NHI was beginning to appear as if it was an election campaign for the ANC for the 2024 elections, which was not practical because the bill’s constitutionality stood in the way of this. They could not go to the Minister and thumb-suck an amount to fund the bill. She emphasised that the Committee needed transparency by having the details shared of how much was needed to kickstart the bill.

Ms Gela said she supported Mr Siwela’s submission on clause 49, as did the ANC. Given the significance of the bill and the funding that would be mobilised from the National Revenue Fund into the NHI, it was important that the Fund be appropriated annually and that the process be undertaken through the oversight process of Parliament. She said the section stipulated that the Fund would come from existing money reallocated from medical aid fund tax credits. She also referred to the KPMG research, which had shown the positive economic impact of implementing a single-payer and other work. The research provided adequate evidence to show that the NHI implementation was affordable.

She would not entertain claims that they were using the bill as a campaign strategy for elections. People had confidence that the ANC was the only party that could change people’s lives, and no other party could do that. The country could not go back to the apartheid era, where the minority had ruled. On the issue relating to the minimal function of provinces raised by Ms Wilson, she responded that provinces did in fact have a role to play in the implementation of the NHI.

She reiterated how the bill had the potential to change lives by creating equal access to healthcare services across the country, where everyone would be subject to the same system of healthcare. She told Members who opposed the bill to think outside of the box and take a more positive view when looking at the bill. It was important for Members to note their privilege in the conversation and understand that just because they could access private healthcare, the same could not be said for the majority of poor South Africans, who deserved better facilities as well.

She reminded Members that apartheid had denied the black population access to better health facilities, reserving the best services for whites only. The unequal society that they were attempting to eradicate had existed for over 350 years. She said that 350 years of governance was incomparable to the 30 years that had attempted to undo the centuries of work that had embedded inequalities into the country.

She asserted that there had been major improvements in the last 30 years in terms of quality health services and facilities that had to be acknowledged. She urged Members to approach the bill with more positivity instead of criticising the bill as they had been doing because it appeared as though they were not interested in serving the poor and undoing the legacy of apartheid that had benefited ‘them’ -- referring to Ms Wilson.

Ms Wilson raised a point of order, asking Ms Gela to refrain from personally attacking Members because it reflected poor camaraderie within the Committee. She said that they were working on a bill, and every Member had the right to express their concerns.

The Chairperson told Ms Gela to refrain from being personal in the meeting and asked her to continue if she had more to say.

Mr Xaba began by supporting the sentiments expressed by Ms Gela and Mr Siwela. He said that earlier, Members had been comparing the NHI to SOEs, which was incorrect because the NHI could not be compared to SOEs. He said that corruption was rampant in both the private and the public sector, which was why the NHI was necessary because it would curb inefficiencies and corruption in the public sector and the private sector.

He provided clarity on the issue of the sources of funding for the NHI. He said that the bulk of healthcare services was already paid for through taxes, and those with money were already paying for medical aid, with a significant portion paid by the state. What the NHI would be doing would be simply to reorganise or direct largely existing financial resources to prioritise keeping all people healthy. He added that the focus on healthcare had become even more urgent because of Covid.

Mr Munyai added his support for Mr Siwela, Ms Gela and Mr Xaba. He said the ANC endorsed the financing of a health system that would radically improve quality services for the entire population. They were against a piecemeal and fragmented solution that served only a few. The World Health Organisation and the Organisation for Economic Corporation and Development (OECD) had declared that South Africa was an outlier because it was the only country in the world that was spending huge amounts of money on a minority section of the population, akin to apartheid and differing only by income levels.

He added that the idea that the country could not afford the NHI and that it was too expensive was a persistent and dramatic myth. He noted that 16% to 17% of the population spent 4.4% of the GDP on their health, leaving 84% of the population with merely 4.1% of the GDP. He urged Members not to ignore the built-in anti-corruption measures involving the participation of the Special Investigating Unit (SIU), the HAWKS, the National Prosecuting Authority (NPA), civil society groups, the Department of Health and the Council for Medical Schemes. These institutions would establish fraud detection and fraud prevention before a single amount was transferred into the NHI Fund. He admitted that corruption was rife, but dramatic measures were being taken to protect funds.

Dr Thembekwayo said that under section 49, the power of the Minister should be replaced by a board or council. She pointed out that there were no clear specifications in the whole chapter on financial matters, with specific reference to the general tax collections which could be levied only through a money bill under section 77 of the Constitution. She said that the limitation of the role of medical schemes could be counterproductive to the successful and sustainable implementation of the NHI because of a lack of available resources. Clause 49(2) should be dealt with in a dedicated financial plan with clear guidelines. Until the suggestions for clause 49(2) were given effect, the EFF were not prepared to support clause 49. She emphasised that the NHI in its present form could not be supported by the EFF.

Dr Harvard said the ANC supported clause 49(2)(b) because the provision ensured the NHI Fund's income and expenditure processes, and the statements would be fully compliant with the provisions of section 53 of the Public Finance Management Act. The act stipulated the requirements for any non-business schedule three public entity. She was in support of Mr Siwela, Ms Gela, Mr Xaba, and Mr Munyai’s submissions.

The Chairperson said that clause 49(3) indicated the requirements for schedule three entities in terms of budget allocations. It was important for this clause to remain in the bill for there to be consistency with the processes related to budget appropriations. Funds appropriated to the NHI Fund must follow due process and must be constitutionality sound and compliant with relevant Public Finance Management Act requirements. He added that he also wanted to support Ms Gela, Mr Xaba, Mr Munyai, Mr Siwela, and Dr Harvard with all that they had put forward before the Committee.

Ms Wilson clarified the statement she had made about the woman who worked in her house. She had taken her to Clicks to get a Covid vaccination but Clicks refused to give her an injection because she did not have medical aid. When she "threw her toys out of the cot," accusing the pharmacy of discrimination, Clicks had responded that they were only following the government's instructions. They told her that the Department of Health had instructed them to inject only people who had medical aid. She had lost her temper with the pharmacy because she was frustrated at their discriminatory practice, and this should be an indication to the Members that she was concerned about the citizens of the country and that she indeed did care for South Africans. She urged Members to stop questioning her about whether she cared for the citizens of the country. She had yet to see a media release from ANC Members who had conducted an oversight at hospitals and been on the ground, attesting to the disgusting conditions in hospitals.

Responding to Mr Xaba's statement that he did not know why Members were concerned about where the money was coming from, she said it was not a question about where the money would be coming from, but how. As an example, she said if one had a cow and wanted milk from the cow, one could not milk the cow for 24 hours a day seven days a week, and expect it always to produce milk when one had milked it dry. This was essentially what they were doing to taxpayers -- milking them dry and expecting more. She commented that it was not going to happen.

She reiterated that South Africa already had universal health coverage, so the NHI was not a myth. It was a reality, but the only problem was that the healthcare system lacked quality. The government could not deliver the appropriate healthcare, and they were misappropriating funds and taking excessively from taxpayers dipping into the pot.

The Chairperson was disgruntled by Ms Wilson’s comment about ANC Members dipping their hands in the pot and asked her to refrain from subjecting all ANC Members to careless scrutiny that implicated them with corrupt individuals. He had joined the ANC because he had an obligation to the people of South Africa to continue to do the work of transforming the unequal system that had existed before democracy. He urged Members to refrain from painting every ANC Member with one brush as corrupt.

Ms Wilson responded that what she had initially meant was that the government could not keep taxing citizens excessively because citizens' pockets were going to run dry from being milked to capacity by the state.

Clause 50: Auditing     

The Chairperson took the Committee through clause 49 of the bill

Ms Clarke said that she did not want anyone to take what she was going to say personally, because she was strictly referencing the Zondo Report as well as the Auditor-General’s report. She emphasised that she was not accusing anyone personally, but there had to be more stringent checks in between to avoid wasteful expenditure and corruption occurring prior to the AG’s audit. Money would be looted on a scale far larger than what had been found in the state capture investigation if the state did not have strict and tight controls over how money was transferred and spent.

Mr Xaba said the ANC endorsed the bill. He also mentioned that there was no sense of morality in the statement that there was no money to fund NHI.

Mr Munyai stated that the ANC supported clause 50. To ensure that the NHI Fund was effectively and efficiently managed, it was important that its operations were subjected to audits as provided by the Audit Act of 2004. This would ensure that the Fund was reliable and effective to enable good governance and the use of allocated resources. It would also ensure that allocated funding was used to benefit users, especially the most vulnerable members of the South African population.

He recommended that subjecting the fund operations and proposals would assist with maintaining a robust internal control system which would help in actively detecting and preventing various kinds of irregularities. It would also assist in ensuring that the Fund was safeguarded against possible fraud, corruption, or malfeasance by holding executives accountable for verifying that the allocated budget was utilised responsibly and for the intended purposes.

Dr Harvard indicated her support for Mr Xaba and Mr Munyai’s submissions related to clause 50.  She said the ANC supported clause 50 in its entirety.

Ms Wilson said she supported clause 50 because the country was in a position where the Minister and his political appointees were in every position under the sun, so the bill had to be carefully audited.

Mr Siwela indicated that he supported Mr Munyai and Mr Xaba’s submissions. He was also in support of the clause.

The Chairperson also said he supported clause 50.

Ms Gela supported clause 50. She was happy that Ms Wilson had seen the light and supported the clause. She said people had been talking about the bill as unconstitutional. She requested that those Members who had stated that the bill was unconstitutional should tell the committee what section 27 of that same Constitution said about being compliant. The main issue that the Constitution was concerned with was giving the responsibility of providing healthcare and all other services to the government. She noted that the government was trying to perform its responsibilities.

Clause 51: Annual Reports

The Chairperson took the Committee through clause 51 of the bill

Mr Munyai said that the ANC supported Clause 51(3)(a). The clause was exceptionally important as it required the Fund to report publicly on the number of users that had access to and used the personal healthcare services from the various accredited contracted providers across the country. Reporting on this type of information on users ensured that the public was kept abreast of the progress that the Fund was achieving towards realising the various objectives in the Act.

He supported subsection (4)(a) and (b) because the Fund, through the Minister of Health, had to table the annual report in the Assembly and the National Council of Provinces (NCOP). This provision would ensure that Parliament and its structures evaluated the funds, the implementation of the Act and its obligations, the monitoring of the fund expenditures, and ensuring effective management.

Ms Clarke noted how section 51 aligned quite well with section 50. She said that the Minister should be accounting and tabling reports more than once per annum. The NHI had to be accountable to Parliament because it was a large fiscal responsibility. The Minister should have to account to Parliament throughout the year.

Mr Xaba said the ANC supported clause 51 because the clause addresses many of the counter-arguments that had been submitted by various stakeholders related to who the fund would be accountable. The provision supported the requirement that the fund remains accountable to the Minister of Health as the executive authority responsible for health. In addition, the provision stipulated that Parliament must continue exercising the functions and activities of the Fund through the reporting processes similar to requirements in place for other health sector entities.

He said the ANC supported section 51(3)(c) because, given the nature and anticipated functions and activities of the Fund, it was important that all structures to which the Fund reported remained accountable, and that the public was kept aware of all the financial transactions and up to date on the financial status of the fund. It would assure all relevant parties of the Fund’s financial health, including its sustainability and ability to meet its commitments with regard to loans, overdrafts, advances, and other financial commitments. The Fund’s annual report must provide clearly articulated financial information to ensure continuous transparency with regard to its operation and its financial status.

On section 51(3)(H), he said the ANC supported the clause because the provisions provided flexibility for the Minister of Health as the executive authority responsible for health, to issue relevant regulations and determinations related to the Fund's annual reporting requirements as may be deemed necessary from time to time.

Ms Gela supported Mr Munyai and Mr Xaba on their submissions. She said the ANC supported clause 51(2)(C) because the core purpose of the NHI bill was to ensure the availability of funding for healthcare services within the country. It was vital that the fund reported annually, outlining clearly how this core purpose was being achieved and what progress was being recorded in the reporting. The ANC supported clause 51(3)(G) because the Fund must remain accountable for all its financial transactions, including the funds it decides to right off for any reason, irrespective of the sum. She added that the fund must be reported according to the standard accounting practice.

Ms Wilson said was obvious that auditing and annual reporting were part of the Public Finance Management Act, so they had to be part of the clause, and both had to be stipulated because it was the constitutional mandate of all government entities. There were a few concerning issues in clause 51(2)(c). A statement of progress achieved during the preceding financial year towards the realisation of the purpose of this act would be interesting to see in the first year because there was nothing to compare it against. The clause stated that the total monetary value of healthcare benefits provided in respect of each category of benefits and level of care was determined by the Minister. She responded that if the NHI bill was passed, it would be necessary to have key performance indicators (KPIs) from day one.

She said the section talked about the accumulation of medical data of patients, but how would this be possible if hospitals and various other healthcare facilities were currently without information technology (IT) systems or Wi-Fi? She pointed out that this would be a big issue. She was also concerned about (3)(c), because she was wary that if the NHI became another SOE, it would require bailing out from Treasury, as was the trend with various SOEs. She was very much against this, stressing the importance of a financially sustainable bill. She added that the NHI demonstrated no signs of being sustainable.

Mr Siwela said the ANC supported clause 51, because the submission of an annual report detailing all the activities undertaken by the fund over a given financial year would enable everyone from the Minister of Health to Parliament and the public, to have access to information on the core activities of the Fund and what value these activities had contributed to achieving universal health coverage. The ANC also supported clause 51(3)(d), because the fund had to publicly disclose all the donations it received, irrespective of the source and the amount. This would ensure that all such funds were properly accounted for in terms of the quantum and the purpose for which they had been utilised in meeting its functions and responsibilities. Clause 51(3)(d) also ensured that adequate declaration protocols were in place to protect the fund against any possible corruption.

Dr Harvard stated that the ANC was in support of clause 51(2)(a) because the fund’s financial statements were regularly audited according to standards and the norms stipulated by the AGSA. This would ensure the accuracy and reliability of the financial information that was submitted by the Fund to both the Minister and Parliament. The ANC supported clause 51(3)(b) because it ensured that the Fund would continuously provide accurate financial and non-financial information regarding the personal healthcare services that had been rendered to the population, in line with its functions and responsibilities.

She said the ANC was also in support of clause 51(3), because the requirement was critical to monitoring the funds in relation to what property it possessed and how this contributed to its functioning and operations.

Closing Remarks

The Chairperson announced that both he and Ms Ismail would put forward their remarks on clause 51 in the next meeting.

The meeting was adjourned.


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