National Health Insurance (NHI) Bill: Health Department response to concerns, with Deputy Minister

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30 November 2022
Chairperson: Dr K Jacobs (ANC)
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Meeting Summary


NHI: Tracking the Bill through Parliament

In this virtual meeting, the National Department of Health (NDOH) responded to the concerns that the Portfolio Committee members and the public had raised on the NHI Bill.

Members of the opposition parties rejected the Bill in unison stating that it would be best if the Department focus on fixing the current challenges of the healthcare system such as dilapidated infrastructure, shortages in healthcare personnel, and shortages in emergency medical services (EMS). The Department responded that it was not a matter of either / or but rather the healthcare system needed to be remedied at the same time as the NHI implementation.

Members of the opposition raised concerns about the lack of a financial feasibility study, the ambiguous role of medical aid schemes after the implementation of the NHI, as well as the powers of the Minister to appoint the NHI Fund board. They were disappointed at how little consideration the Department had shown for the submissions put forward by the public and committee members.

The NDOH Deputy Director General for National Health Insurance responded at length to the criticisms.

Meeting report

Dr Sibongiseni Dhlomo, Deputy Minister of Health, noted that the Minister was unable to join as he was attending a Cabinet meeting. The Department had attended all the Committee meetings and hearings and had reasonably considered all the concerns raised. It has responded to some and today it hopes to respond to others, including those listed in the matrix presented just last week. He urged Committee members who had expressed their reservations about the Bill to reflect on the considerations that the Department has put forward in the presentation and to support the NHI model it had chosen. He noted that every country that has an NHI model has reconfigured it to suit the conditions of that country.

Dr Nicholas Crisp, NDOH Deputy Director General: National Health Insurance, led the presentation and explained that the Department was still convinced that it needed to create a new framework recognising the social and economic determinants to health. The Bill’s aim was to come up with a way to pay for quality personal healthcare services. The main points of the report included the following:

Change in definitions (clause 1)
• The word ‘supplier’ must be defined.
• The word ‘health product’ must be changed.

• The Department does not agree with the recommendation by the Competition Commission and other stakeholders that the Fund should not be exempted from clause 3 of the Competition Act.

• Coverage of tourists, immigrants, refugees, and asylum seekers (clause 4) to still meet their health needs as per existing legal prescripts in the Immigration Act as well as internationally ratified agreements. Clause 4(2) must not be amended. Instead, the clause must be improved through inclusion of a sentence that reads: To provide a more comprehensive service to asylum seekers and undocumented migrants

• The Minister has the power to appoint the board (clause 12). Parliament should be holding to account, observing, managing and overseeing the board but not appointing its members.

• Role of medical aid schemes (clause 33) is to offer complementary cover to services not reimbursable by the Fund.

• Role of the District Health Management Office (clause 36) is that these DHMOs will be established to ensure that every South African has access to primary health care (PHC) services within a district. They will be responsible for all planning and co-ordination of PHC needs of the district population. They should be given the responsibility of improving the health status of the district population with clear targets set for improvement.

Mr T Munyai (ANC) said he understood the rationale of the Department by allowing medical schemes to offer complementary services rather than duplicating cover based on the existing two-tier healthcare system. He urged government to intervene to deal with the fragmentation that adversely impacts the performance of the current healthcare system and ensure that it does not continue under the NHI. South Africa has scarce resources in the form of doctors, nurses, medication, equipment, finances, and facilities so we cannot promote a situation where the wealthy are served at the expense of most of the population.

Almost R8.5 billion is spent on healthcare in the country. Government is contributing substantially to medical aid in the private sector which is not fair because the public are paying their taxes to support the minority who are employed by the state. Medical aid schemes should provide services that are not covered by the NHI Fund. There is a fear that medical aid will be scrapped when NHI is implemented which is not true. The aim of the Bill is to allocate an alternative way of providing services that are not included in the NHI. What is the Department's thoughts and perspective on this matter?

On health benefits, stakeholders made submissions to the Committee that the Bill must indicate the full list of healthcare benefits the population will be entitled to under the NHI. What is the Department’s view on revising clause 7 to include a detailed list of the healthcare services covered under the Fund?

Ms M Clarke (DA) highlighted that the DA unequivocally supports universal healthcare, but the emphasis should be quality universal healthcare. The crux of the matter is that the NHI outcomes can never be achieved in the current environment where patients are treated in appalling conditions in state facilities.

After all the work that Portfolio Committee members have given in input there has been very little done by the Department to incorporate that input. The documents and changes are extremely disjointed. Much like the Zondo Commission found that Parliament was failing in its oversight duties, in this case Parliament is failing in its duty to produce proper public participation. We have allowed the Department to produce a response document that ignores the entire input of stakeholders and political parties except for the ANC where it responds to peripheral rather than the primary concerns raised. It also fails to properly address both the legal and the substantive issues that many stakeholders have put forward and have not been given the opportunity to have their views incorporated into the document – which really calls for legal recourse.

There is an attempt by the NDOH to compensate for weakness by doing the work of Parliament. The responses do not come close to dealing with the substantive matters raised in the hearings. Clause 9 preserves the patronage model of accountability. The report is totally unacceptable and clause 33 remains unconstitutional and will not survive a court challenge. Due to the glaring deficiencies of this document, she recommended that NDOH deal with all the issues raised. A financial model and feasibility study have yet to be determined and yet yesterday the Finance Minister in his response to a parliamentary written question on the NHI Bill and the current fiscal constraints, stated that the NDOH financial model is vague and provides no clarity at the current ratio in South Africa.

The country has a R4.7 trillion debt and tax revenue is already under pressure. People cannot afford to feed their families, drive cars and given the job losses, the situation is dire. Debt will increase to R trillion in the next five years. We have no space for more tax or VAT and there is simply no extra revenue lying around. The Finance Minister was also clear in his response saying that "the cost model will not automatically translate into budget allocations as these would have to be made as part of the budget process which will take into account the macro-economic environment and fiscal space". All this was in the answer received yesterday to a parliamentary question. Currently there are R3.2 billion in outstanding accruals which have not been paid. What impact will this have on the financial wellbeing of state healthcare and ensuring that our suppliers are delivering medical treatment.

The billions in outstanding medical claims also have a severe impact on the functionality of the healthcare space. Over 1 010 service providers have not been paid in thirty days and over 3 400 ambulances are needed in the country. We do not comply with the standards and norms, and this destroys the NHI aim to transfer patients to other service providers.

None of our input has been considered and the ANC expects us to rubber stamp this Bill even when we have raised very critical issues. It has taken us a lot of time to work through these and contribute positively to this committee. She expressed disappointment at how all their hard work had been done in vain. The powers of the Minister which is a critical issue still has not been raised as well as the accountability role that Parliament will have in terms of transparency. The fact is that we need a capable state and management structure within the healthcare sector that is not influenced by cadre deployment and millionaire managers that earn exorbitant salaries who simply act as a postbox.

Ms Clarke gave the example of the transparent process for the SABC Board appointments where the Communications Portfolio Committee shortlisted 32 candidates, interviewed them and ensured that State Security Agency (SSA) background checks were done and then it recommended the 12 final candidates which the National Assembly would confirm. We as the Health Portfolio Committee should also embark on similar transparent process. There were no real plans to mitigate fraud and corruption to ensuring that the NHI will not become another SOE as it will have a huge impact on the lives of our people, upgrade infrastructure and can provide the kind of healthcare that Africans deserve.

The DA recommended that a holistic strategy be developed between the private and the public sectors to improve healthcare with medical professionals who can guide government on the best models that should be implemented. The Committee has a duty to South Africans to provide proper universal healthcare. This duty has not been fulfilled due to the failing ANC government, cadre deployment, fraud and corruption. Public groups need to act in a transparent manner and protect the Constitution and ensure that outcomes are achieved.

Bad policies can have a negative effect on service delivery and on the lives of the people. The Committee still has not received a document on the input of the hundreds of thousands of public participants. There has also been no outcomes about the +300 000 submissions on the amendment regulations on Control of Notifiable Medical Conditions. This has an impact on the Bill. What had happened to that process?

The Ombudsman and the Office of Health Standards Compliance (OHSC) have a critical role for certification and compliance. They categorically told the Committee that they would not be able to perform the function of ensuring that our hospitals comply with the norms and standards due to being extremely short staffed. This needs to be dealt with because NHI cannot be implemented if these facilities do not comply to these specifications.

The many changes to other legislation in order to comply with and support the NHI Bill have not been made. Surely some of the changes that have been presented in this meeting should also go through public participation before the Bill is finalised. None of the Committee inputs have been considered yet the NDOH and the ANC expect this Bill to be rubber stamped even though the critical issues raised have not been engaged with. This process has been rushed. It deserves the necessary consultation in considering further public participation. The Committee wants to ensure that the best healthcare is provided to South Africans. By rushing through this Bill and ignoring critical issues that need to be dealt with we can never achieve the best healthcare. She emphasised that the DA rejects the presentation report with the contempt it deserves.

Ms A Gela (ANC) welcomed the presentation. The ANC supports the implementation of the NHI without reservation. Stakeholders have also expressed their desire for NHI. The ANC hopes that the NHI is implemented as soon as possible because it is what South Africans want. Many stakeholders continue to argue that NHI is unaffordable and should not be implemented before the public health sector has improved and has the capacity to provide quality health services. What is the Department’s response to these two arguments put forward by stakeholders?

In the definition of 'providers' where the deletion of uniform has been proposed, does NDOH propose that the word uniform should be interpreted to mean that all service providers of different specialties should be reimbursed in the same way? Or does it mean that uniformity in reimbursement will apply to similar services being provided to users regardless of who is offering such services? In the Schedule of Acts to be amended or repealed, the Pharmacy Act is not included which enables the South African Pharmacy Council to make determinations on fees to be charged by pharmacies. Will these provisions continue to exist under the NHI or will it also be amended?

Some argue that medical aid schemes will no longer exist under NHI. She reiterated that the ANC does not support the total elimination of medical schemes. Membership of a private medical scheme should continue to be voluntary. Whether an employer continues to subsidise its employee contributions to a medical scheme in the presence of NHI will be determined by the employer in consultation with its employees. Belonging to a voluntary private medical scheme should not be used as a prerequisite for employment. Those belonging to medical schemes cannot use the scheme to pay for NHI services because the Fund will not be reimbursed. Medical aid will play an important role outside of the NHI by providing complementary services.

The Minister of Finance said in Parliament, ‘The 2023 budget to be tabled in February is unlikely to have a substantial focus on the NHI and will rather focus on overcoming service delivery backlogs.’ The ANC supports the NHI so that it can assist in the attainment of equal access to healthcare. The ANC does understand that other parties are opposed to NHI implementation but the ANC as the leader of society and must listen to society's request for NHI implementation. The ANC says forward with NHI forward.

Mr P Van Staden (FF+) noted that it has been three years since the Committee has begun dealing with the NHI Bill. The Committee has listened to the comments of nearly 900 people in the public hearings across South Africa. We have received written public submissions from over 300 000 people and stakeholders in the medical sector have come before the Committee to make oral submissions. Committee members have taken part in clause-by-clause deliberations which started early in the year. It simply feels that the massive inputs made in public hearings, written submissions and deliberations have not been adequately responded to in today's report.

It is necessary to give the necessary and adequate attention to the many submissions that were made. The FF+ still stands by its stance when the Bill was first tabled by the Minister in 2019 that the FF+ cannot support the NHI Bill. The Committee must please note that the Freedom Front Plus rejects the report.

Ms H Ismail (DA) agreed with Ms Clarke that it was important that Members receive a response to each input that was submitted because that is the reason we have public hearings, submissions, and deliberations. This is a massive Bill with huge consequences financially and for healthcare. It is very disappointing that all inputs have not actually been responded to. If we look at the first point which is facilities accreditation, we have not heard sufficiently exactly how this is going to be facilitated. There are no constructive replies to the issues raised.

Also how many public facilities will be accreditation-ready and by what date? On the financial feasibility study, Ms Clarke noted that the Minister of Finance stated clearly that the cost model will not automatically translate into budget allocations. This tells us very straightforwardly that the NHI has not been funded appropriately. There have been no financial feasibility studies. We cannot initiate a plan in this country for such an important matter as healthcare which is a constitutional right. We are going nowhere with the NHI especially where it concerns reliable information.

On service providers paid on time, there are currently R3.2 billion in outstanding accruals as a result of service providers not being paid on time. That are at least 1 710 service providers who have not been paid by NDOH. Under the NHI this would be even worse. We have stressed repeatedly for NDOH to remedy what is going wrong in the system before implementing the NHI. There is a major shortage of emergency medical services (EMS) and with the NHI requiring the transfer of patients from one service provider to another, obviously this will negatively impact the provision of services and we have received no response on this matter at all. This was highlighted in so many public hearings. Most submissions state that NDOH must fix up the system because so many things are going wrong.

We have not received information on the number of submissions that agree to the Bill and how many reject it. The NHI will take billions and billions of taxpayers’ money in an environment where we have already had whistleblowers highlighting suspicious payments of R850 million and Corruption Watch highlighted that 670 whistleblower reports were filed exposing corruption in the healthcare sector. The Zondo Commission Report stated clearly that Parliament did not do oversight as it should have and this will be much worse under the NHI if Parliament is not afforded the responsibility to appoint and not Cabinet. The Committee wanted Parliament to perform oversight duties and not Cabinet.

South Africans do not have a capable state. We have high rates of unemployment and we cannot put an extra burden on taxpayers by forcing them to finance the NHI Fund that has not been properly thought out and has no financial feasibility study. The fact that all submissions have not been responded to is disrespectful towards all the people who took the time and effort to provide submissions on the NHI. We need to ensure as the Health Portfolio Committee that we do justice to this process. Rushing the process will not get the country anywhere. The Democratic Alliance stands for quality universal healthcare and to achieve this the DA proposes that we should fix the current healthcare system first before we jump from the frying pan into the fire and make things even worse for health care in the country.

Dr X Harvard (ANC) welcomed the presentation and supported implementation of the NHI Bill. In clause 3(5) of the Bill, it indicates that any transactions concluded by the NHI Fund must be exempt from the Competition Act. Why does NDOH deem this exemption necessary and how does it contribute to achieving the objective of universal health coverage?

She asked would it not enhance the definition of 'health products' if the word safety was inserted together with quality and efficiency? Is the amendment to the Transitional Arrangements clause suggesting that one additional year will be added in Phase Two or that the exact duration for Phase Two will be decided at a later stage? Will the bodies responsible for [2:37 inaudible] be granted recommendatory or decision-making powers?

Mr N Xaba (ANC) welcomed the report. The ANC supported NHI and the country needed NHI. On the role of medical schemes, several stakeholders mainly from the medical scheme industry have argued that it is better for medical schemes to be allowed to play a duplicative rather than a complementary role under the NHI. They raised several objections to clause 33 saying it is unconstitutional and not reflective of what has happened in other contexts. Can NDOH explain the rationale for the medical aid schemes to play the role as envisaged in clause 33?

Stakeholders argue that there is a need for clarity on the exclusion of NHI Fund transactions from the Competition Act and how this will impact the industry and how it will work in practice. One would expect that health professionals and medical facilities will continue to be regulated under the NHI. It might well be that some providers are large enough to benefit from economies of scale and from the larger and well-established supply chain. However, reimbursement levels of these services should remain the same and be determined centrally. We expect that to be an NHI provider, minimum set standards must be met which make it critical for service providers to compete based on efficiency and maintenance of quality standards. With such conditions it is highly unlikely to see anti-competitive behaviour. Does NDOH agree with this understanding and can they provide further clarity on this?

Does the national quality improvement plan include both public and private facilities? If the plan is only in reference to public health establishments, what efforts are made to ensure that quality deficiencies in the private sector are addressed? The Department has stated that international tourists and those with work visas will be provided for through a special dispensation. How would the NHI Fund deal with South African citizens who work abroad and have insurance at their place of work? Will there be a different payment mechanism for these individuals?

On reimbursements, why is it important for the NHI Fund to implement a restructured investment strategy as part of the reforms to achieving universal health coverage? Some have commented that a single payer system is an inappropriate system for South Africa. In the White Paper, the aim is to create a single payer and a single purchaser. The NHI Fund will manage the mechanism for pooling finances for the health system and strategically purchasing health services to maximise income and risk. The Fund will create a single pool of funds that will be used to purchase services that benefit the whole population. Acting as a single payer and a single purchaser will mean the Fund will be able to reap the efficiency benefits of a single purchasing power and economies of scale and ensure that the incentives for healthcare providers are integrated and coherent. Has the NHI Bill remained true to this policy or not? As a point of clarity, the 2023 Budget will not include the NHI because the Bill must still go to the NCOP. Budget requests should be for 2024.

Dr S Thembekwayo (EFF) stated that the NDOH responses about the NHI indicate that the NHI is still not viable and the Bill cannot be accepted in its entirety because the very important suggested amendments have still not been taken into consideration. The suggested amendments came from oral and written submissions as well as from the discussions amongst political parties. The Department has also neglected the infrastructure problems experienced throughout the country. There has not been a single attempt to move towards improving the infrastructure challenges.

What was indicated throughout the presentation is that the changes suggested by the public and Committee members will not be made – with the excuse that the Department has investigated such international arrangements. It seems to have forgotten that we are dealing with South Africa which has its own unique challenges and specific context. We can acknowledge international standards, but we cannot be guided solely by international norms. It cannot be the only reason for the NDOH to ignore or set aside important amendments that need to be included in the NHI Bill. What guided its selection of what were relevant submissions worthy of consideration in amending the Bill? Why have most of the Committee’s contributions been neglected?

The role of Parliament and the Portfolio Committee should be considered. The Economic Freedom Fighters reject the report. The Bill should not be rushed. We must look at the concerns thoroughly and address each one of them before moving forward.

Ms E Wilson (DA) stated that the NDOH presentation talks about making progress to achieve universal health coverage but there is substantial evidence to support that South Africa has already achieved universal health coverage. This evidence is supported by the Health Market Inquiry, World Health Organisation report and the International Labour Organisation. There is no evidence to the contrary that has been provided.

The Department talks about acting as a single payer and single purchaser and in doing so the NHI will reap the benefits of monopoly purchasing power and economies of scale and ensure that incentives for healthcare providers will be integrated and coherent. Where is the feasibility analysis supporting this claim? Currently the state acquires medicines and materials via tenders from private suppliers. These suppliers provide their lowest prices and sometimes even at below cost, with the knowledge that they can recoup lost margins by selling at higher prices in the private sector. If the state becomes a monopoly purchaser of medicines, there will not be a private health sector against which suppliers can recoup their lost margins of much lower prices to the state. Prices to the state or NHI will then increase and not decrease as claimed. Alternatively, if the NHI dictates lower prices, then suppliers will go out of business or exit the market altogether. This would simply worsen access to healthcare services.

Mr E Siwela (ANC) asked how NDOH rationalised the Minister’s role as the appointee of the NHI Fund board, as not interfering in ensuring transparency, accountability and robust governance. On the recommended amendment to clause 3(5) of the Competition Act, will the Fund accept if contracted and accredited service providers engage in private business with others located outside South Africa over and above the work they perform for the Fund?

There is a proposal that the contracting units for primary health care be local level structures responsible for service planning on behalf of the NHI Fund. However, many submissions to the Committee indicated that these units are a duplication of the District Health Management Office. Can NDOH explain the difference between the roles and functions of these two structures? Lastly, when will NDOH effect the necessary amendments required in other Acts in order to make way for the introduction of NHI. He also indicated the ANC’s support for the NHI.

Ms M Hlengwa (IFP) stated that the IFP is very disappointed because the comments it submitted as its contribution to the discussion were not engaged with. It support universal healthcare; however what is the use of medical aid? There is no clarity on the function of medical aids under the NHI. They are worried about the current healthcare system where there is dilapidated infrastructure and a shortage of medication, equipment and medical professionals. She asked how NDOH planned to remedy the challenges in the current healthcare system and from where the budget to fund the NHI would come.

Mr Xaba pointed out that the Minister of Finance is part of the Cabinet that submitted the NHI Bill to Parliament. He urged the Committee not to misunderstand the Minister. The NHI cannot be included in the budget for 2023/24 because financial models are based on assumptions. It is not true that the NHI Bill has not been adequately considered as the FF+ party implies. The NHI policy and Bill were consulted for more than ten years. He asked Ms Wilson to explain when public participation "stops" considering that it was done extensively.

He cited that 11 564 people attended the provincial and public hearings and 961 people made oral submissions. Of the 961, a total of 820 people were in support of the NHI and a mere 118 opposed the Bill. Only 23 of the 961 oral submissions raised issues unrelated to the Bill. These are facts contained in the Committee Report. The ANC heard the nation cry, and the party must respond accordingly.

Mr Xaba referred to clause 4(3) and asked if individuals and children who enter as tourists in South Africa will be afforded the same services if they fall ill whilst in South Africa.

Ms Gela said that she supported Mr Xaba's comments. She urged the Committee not to mislead society. She asked the Committee to implement NHI.

Dr K Jacobs (ANC) said that Members had raised several points and many of those had been raised before. The Department has had to consider all the inputs and proposals; then come with its recommendations about the written and oral submissions and Committee discussions. The intention is to give NDOH the opportunity to respond to what has been raised. Not everyone will agree with its responses but that is to be expected within a multi-party organ like Parliament.

The ANC agrees with exemption of the NHI from the Competition Act because the NHI is a public policy intervention in health system financing. It does not seek to support public and private providers to make a profit but to support universal healthcare, which is largely about public purpose. They had heard some Members saying that private providers would be making money and that this would be a system to provide greater income for private providers. It was important to reiterate that this is a public policy intervention that is going to support both public and private sectors.

The Competition Act seeks to address uncompetitive behaviour, particularly among service providers that seek to maximise profit. The NHI seeks to establish one funding body that will purchase healthcare services from multiple providers that will compete based on quality and not on price. The market cannot be a free-for-all and all providers who meet specific standards will be allowed to operate. What the NHI is proposing is a single payer but multiple providers. Would NDOH agree with this suggestion?

On the funding of healthcare services in central hospitals, will this be any different from accredited hospitals at different levels that will be contracted to the Fund? There have been arguments that the proposed NHI system will not increase access to healthcare on a progressive basis and that it will instead deprive many of the access that they currently enjoy. There have been arguments that the NHI Bill contradicts several universal healthcare principles outlined in the 2017 White Paper.

Dr Jacobs said another point raised was that, while the NHI Bill successfully addresses fragmentation in financing it risks further fragmentation across several other healthcare system dimensions. The ANC’s understanding is that the NHI reduces fragmentation of funding pools. It reduces fragmentation of service provision between the public and private sector service. It will also end fee-for-service, which creates fragmentation in the system. He asked NDOH to comment.

Stakeholders have concerns on the costs for the various technical committees which will be established as part of the Fund. How does NDOH propose that the costs of such structures are controlled by the Fund? The ANC listened during the clause-by-clause deliberations and have tried to suggest amendments and the NDOH has also proposed certain amendments. Why do the other political parties not put forward amendments as the ANC and NDOH have done instead of simply rejecting the Bill? He asked the Committee to work together in bringing forward any necessary amendments.

National Department of Health response
Dr Sandile Buthelezi, NDOH Director General, thanked the Committee members for their input and questions. He invited Dr Crisp to answer the bulk of the questions.

Dr Nicholas Crisp explained that NDOH had considered all the submissions but taking the submissions into consideration does not necessarily mean agreeing with those submissions or incorporating them. They have heard very diverse opinions and comments and were dealing with one extreme where people wanted the complete obliteration and removal of the private sector and at the other end people want an entrenchment of the current private sector structures. In the middle, practitioners within NDOH and specialists in their fields are trying to attain something that will achieve better equity and they are putting the mechanisms in place to do so.

Comments that it would be best for NDOH to consult with medical practitioners are frustrating because that is already being done. Many of the officials within NDOH are medical practitioners and specialists registered in their fields and they interact with colleagues in different environments who do not always agree but that is the nature of all professions and democracy. The Department cannot always respond line by line to every single comment. There were over 300 000 emails received, most of them just stated if they agree or disagree with the NHI Bill. They did not elaborate on what they agree or disagree. When NDOH engages in forums and with practitioners and ask them how many have read the Bill, it is happy if it is even 1%. People are commenting without even reading or having any knowledge of what is in the Bill.

The NDOH understanding and view about complementary medical schemes are written into the Bill for a very deliberate reason. The Department does not foresee that there will ever be a termination and a rejection of all medical schemes and all private financing mechanisms because no state is ever able to provide all health care to everyone. There are always exclusions that medical science makes possible, but they are not necessarily in the interests of the broader public or possible within the framework and the budgets available at the time.

It does not matter what country you look at ­– other than one or two extremes – everybody makes provision for other financing and other provision of health care. The point that needs to be made is that it must not duplicate what is provided by the NHI Fund and that is a fundamental difference that we will not agree with. As technical specialists in the field they were comfortable that what they are trying to achieve with complementary medical schemes is to complement what the Fund should be providing and paying for everybody in the country except for those conditions outside of that.

On the Department relationship with the Office of Health Standards Compliance, it has a very high regard and respect for regulators outside of NDOH. There are presently five entities and they work closely with all of them. The Department does not interfere with what those entities do, but they must implement government policy with their technical independence. The same goes for OHSC.

NDOH meets with OHSC and they work together to refer cases to the Ombudsman. The Department is working to separate the Ombudsman from OHSC deliberately to try and get that autonomy and independence because as health professionals they respect the need for patient confidentiality and working towards quality. The Department looks forward to working with OHSC and they have regular meetings to ensure that they are moving in the same direction. The Office does need better funding to gear up.

Dr Crisp said it would not be wise to declare full benefits in the NHI Act. Three years ago no one had heard about Covid. When he was a practitioner straight out of grad school there had been no such thing as HIV. Some of the diseases we have today did not always exist and we certainly did not have the interventions we have today. For instance, there were no ankle replacements many years ago but now we have replacements for just about everything. Hardly anything was done through scopes in those days but now everything is done through scopes.

Medical science and technology evolve all the time. What one includes as a benefit changes over time, and one does not want to try and ring fence this even in a generic sense because you might not be able to adapt and include benefits as the science changes. Thus NDOH does not want a deliberate listing of inclusions or exclusions of benefits because one would have to go back to Parliament every year to amend those benefits. That is why it should be listed in the regulations. This is also why NDOH wants these technical bodies in the advisory committees to critically assess what should and should not be included.

NDOH had been at pains trying to clarify that universal healthcare and universal health coverage are not the same thing. The Department has invited the Health Portfolio Committee to the Universal Health Coverage Day national event on 12 December hosted by the World Health Organisation. He asked the Committee to invite their friends and colleagues to attend. The event will be made public and there will be a link to the event as well. It was important that people attended so that everyone understands what is meant by universal health coverage and what South Africa is doing versus what other countries are doing.

The Department has heard many testimonies specifically in the Portfolio Committee about people who have been reduced to financial hardship for not being able to get health care because of the system we have today. Universal health coverage means we all get what we need when and where we need it without financial hardship. South Africa does not have universal health coverage because people do not have access to health care providers, they cannot afford the transport to health care facilities, or the food and necessities that ensure good quality healthcare. This is what NDOH means by universal health coverage.

On the criticism that NDOH has ignored the submissions made by opposition parties. It will be happy to again show Members the exact clauses where it incorporated specific recommendations made in the Portfolio Committee meetings over the past months. They can show Members exactly who said what because they have kept records of the meetings. Members had done extremely well to bring items to the Department's attention that it had not thought of. It had incorporated those suggestions into the Bill. He apologized to Members who felt that their submissions had been ignored and reassured them that their submissions had been considered.

On the financial feasibility model, Dr Crisp had heard all the quotes of the Minister of Finance. The Department must sit almost daily with Treasury to discuss Fund issues. They have constant meetings with Treasury about the current budget and the NHI and how they must go about making different changes. The fact is that South Africa has an extremely inequitable funding of health services. South Africa spends 8.5% of GDP according to the figures given to NDOH last week by National Treasury. That is made up of 49% spent in the public sector and 51% in the private sector. They would be happy to share the exact breakdown of figures given by Treasury.

15% of government spending is allocated to health care in the public sector that includes capital and recurrent expenditure in the Department of Defence, Correctional Services, and the National and Provincial Health Departments. Private sector spending is largely medical scheme-funded through voluntary contributions to medical schemes, which makes up 83% of that portion and 14% is out of pocket. The 14% portion is those paying for health care when they run out of medical benefits or people who are not medically insured who want urgent health care and they go and they buy it sometimes at great financial hardship to themselves.

Now the 49% spent in the public sector is R5 500 per capita and the private sector is R25 500. There may be margins in this and NDOH has worked into the different margins in its models, but NDOH does interrogate all these figures. The challenge is how do we spend R25 500 on one section of the population and R5 500 on the other and not harmonize this in some way so that everybody gets better access to all these resources? He asked Committee members if they believed they were really getting better healthcare because there is more healthcare provision in the private sector and we pay more for it. NDOH believed that this was not the case.

Dr Crisp explained that on average, the country is spending over 9,100 grand per capita, but the average is a lie because it is so diverse and even within these figures in public and privatewhat NDOH is delivering to people is very diverse. The advice that they have received after talking to economists and the W.H.O is that NDOH would be going down a rabbit whole if they try and determine the cost for something that is going to take 25 years to stabilise and get equity. even if the country tried to achieve universal health coverage in ten or fifteen years just as some countries had done this would not be advisable. He commented that the country had to work within the envelope it had and only push changes to the extent that the envelope allows.

On the powers of the Minister, the Department has debated this with colleagues from the legal field and various lobby groups and political parties. The Department is still convinced that Parliament should not appoint boards. Parliament should be holding to account, observing, managing, and overseeing those boards but not appointing them. NDOH had taken public comments into consideration referring to the potential trouble of having a Minister appoint a board alone by introducing broader responsibility to Cabinet who are much more visible to the public. This brings in the appropriate checks and balances.

On bringing together a holistic public-private approach, this was exactly what the Bill does. The private sector remains which is what some political parties are objecting to but NDOH is trying to finance it differently. Nowhere in the Bill does it say that there will not be private providers. There must be private providers and those providers must be accredited and included because it is an enormous resource that is currently not harnessed for the majority.

On affordability and the argument that NDOH must fix the public service first, it has frequently said in the public space that it is not either or. The Department can fix the public service at the same time as creating the new framework because if the systemic challenges go unaddressed then the only way to deal with a bigger public sector is to invest more in the public sector while the private sector is still active. If the country spent R25 500 per capita that is spent in the private sector in the public sector, it would need R1.6 trillion to spend the same amount on everybody in the country. So, it is clearly not viable to go that route. And this is not the way in which one does these costings. One must be far more discriminating in considering where there is waste, where there is duplication, theft and fraud and how you get rid of it so that you release more money for patient care both in the public and the private sector.

The Department was convinced that it does not need to fix the public service first. It needs to fix it period. They also needed to fix management. There is a NDOH team working with provinces fixing a whole range of issues around management and facilities improvement.

The Pharmacy Act should be included for amendment as there are sections in that Act which need to be amended.

NDOH does not believe that medical aids should be scrapped but they do need to look different. The Department does not want medical insurance products because they are difficult to regulate, and they do not respond to what NDOH is trying to respond to with the Medicines Schemes Act. Those exemptions which are historical and in place are not valuable and they just complicate the delivery environment.

NDOH make inputs to the budget process through the Director General and the Chief Financial Officer. It submitted the National and the Provincial Departments requests on what they would like to see incorporated in the 2023/24 budget. It had not requested more money for the NHI because the NHI has not been established yet. What will be invested in is the capability to do the detailed design which Committee members have been asking it to provide.

It is only when there is a finalised Bill that one will see money beginning to be moved in the requests and submissions that will be brought through the budget process to Parliament. The Department does not see substantial investments in the NHI but what they do see are money investments to the Health Departments, including the National Department, to improve the infrastructure which some Members have raised which the Director General, together with the Deputy Director General for Hospital Services and his staff, are working on with the provinces. That is where Members will see changes hopefully when budget matters are tabled in early 2023.

NDOH does not get objections to the NHI from National Treasury. They have discussions and sometimes disagreements about small elements that they are working on together to refine.

It was not feasible to go into every little detail but they have read and categorized the comments on the Bill ensuring that everything raised has been considered. They do not agree with everything raised by all the parties, especially because there are such divergent opinions. If they did, they would end up with no Bill at all.

On the accreditation of facilities, he was unable to tell the Committee by what date they would be ready, but every public sector facility is under some form of quality improvement programme at the moment. The programme does include private facilities because they have some serious problems as well because they do not comply with all aspects of the National Health Act on the storage of information and management of patient records. In the National Quality Improvement Programme, NDOH is learning and getting templates so that other hospitals and healthcare facilities can learn from those improvements.

There are personnel shortages, particularly in the public sector, and the private sector also has personnel shortages. There are challenges with EMS but until NDOH can purchase both public and private ambulance services and patient transport services and other emergency services in fixed facilities in an equitable manner, we will continue to have parts of the country and segments of the population who do not get those services. That is why the Bill makes provision for those ambulance services. The reason it is dealt with differently is because in the Schedules to the Constitution, ambulance services are not a concurrent function. All other health services are a concurrent function. Ambulance services are an exclusive provincial function, and municipal health services, which are largely environmental services, are an exclusive local government function which is why it must be dealt with in a different way in this Bill.

They have repeatedly acknowledged that there is corruption and fraud within the system. They know from reports in the private sector that over R90 billion a year is stolen from the medical schemes. They also know that in the public sector there are all kinds of highly embarrassing, very high-profile fraud and corruption cases that are currently before the Special Investigating Unit. There are mechanisms in place to deal with this. There is the proclamation which the President has now authorised for the SIU to investigate all the health departments. That was at the request of NDOH because they know that there are problems, and they want to fix them and deal with perpetrators with the necessary consequences.

The National Department of Health drafted and tabled this Bill. There was lots of consultation. It has been more than ten years that it been busy with the Green Paper, White Paper and another White Paper. It can hardly be said there has been no consultation. There has been wide consultation. There are just vast differences in opinion on how to go about it. They have listened to political parties, to professional colleagues, universities, looked at different countries. They are not a slave to a particular country. Dr Crisp insisted that they have got different elements from different countries that they think will work in South Africa’s environment. The country has the greatest inequality in the world and NDOH must deal with it in this Bill in a way that will fix its challenges.

On the Competition Act exemption, NDOH perceives public health as a public good and not as a tradable commodity for people to make a profit from. It is this point of departure from which NDOH has suggested the changes in the Bill. It has suggested changes that limit the ambiguity that might exist in the wording. They have also suggested the addition of various sentences and words that it believes remove some of the challenges.

There are many different models, but NDOH deliberately chose the single payer model because of the inequity in the country. 51% of what is spent on healthcare goes to 20% of the population. South Africa cannot continue with a situation where there is an increase in the cost of private healthcare to the extent where many people drop out of it and the public health system is stagnant and accumulating more and more people. The country’s population in the next 10 to 15 years is aging because our total growth rate is very small, and our mortality rate. This is a problem that the UK is currently facing, they have a huge number of older people with chronic diseases needing care in old age homes which is consuming its budget. South Africa is also following suit.

On tenders, providers and costs, the Department's job is to get health care to as many people as possible, as cheaply as possible, so that nobody has financial hardship. There will always be tension between how we fight for tender prices to keep them as low as possible. We need to get better certainty in the marketplace. What he meant by the marketplace was pharmaceutical companies. There are tradeoffs to be made. If we import from the cheapest provider for all our medication, we will not grow the South African market. But if we grow the South African market, somebody must pay the price of that additional cost, which sometimes is up to 40%. Those are matters that are discussed with the Departments of Science and Innovation, Trade and Industry and International Relations and Cooperation (DIRCO) and so on.

There are constant and ongoing multi departmental and inter departmental committees looking at all these items. It is very difficult to determine if a certain company is going to raise prices and everybody is going to settle. It does not work like that. The Ministry of Finance will decide on taxes eventually, but they need the tools. Treasury ascertains what the taxation is going to be, SARS collects the tax, and NDOH gets an allocation. If you do not create the possibility of payroll tax – which is a separate debate – you have lost an opportunity. Many countries use payroll tax to raise the money for their national health insurance.

Its understanding about public consultation is that the NHI Bill amendments NDOH is proposing are very important but minor. As such, the changes do not constitute a complete rewrite or a different approach to National Health Insurance. They have stuck to a single purchaser, single payer model; purchase of providers split; public and private providers that are both being contracted in as accredited providers; and improving the quality of lives for everybody. Nothing in the overall intent of the Bill has changed. This means that it is not necessary to have further public consultation.

He noted that Ms Wilson had called into question and said he misstated South Africa percentage of GDP on health spend by government compared to other countries. This was his bread and butter and part of the environment he lived and worked in. They could take a look at all 200 or more countries that the World Bank and the WHO quote at the percentage of GDP on government health spend. They could look at it from every angle but he was sure that they are in the right ballpark. South Africa spends a lot of money as a percentage of our GDP and we do not get the outcomes that we should get because we spend it badly, because our private sector is incredibly expensive and duplicative, and our public sector is struggling.

On the roles and functions of the District Health Management Offices (DHMOs) and the PHC contracting units, this was something new. There were things they have seen around the world and in South Africa that work well or do not work well in different provinces at different stages of the health services evolution since 1994. They were still in that learning phase. At the movement, they have an indirect conditional grant where they have set up one contracting unit in each province and are implementing the digital systems, staffing, integration of public and private sectors and getting all the private sector people onto the Health Patient Registration System (HPRS) so that they can start registering patients in that environment.

The Department is also working out the mechanisms of exactly how the payments will work. Thanks to the Committee who approved the NDOH 2022/23 budget, it has some money to start working on this. It is early days and they acknowledge that they do not have all the answers. What they do know is that this country is extremely diverse. The solution for downtown Joburg will be very different from rural Eastern Cape or the Northern Cape for different geographical and population reasons. This is what we are busy looking at now.

On the amendments to other Acts, NDOH noted the debate if that should happen at the same time as the Bill. At the time a clause is activated, it becomes law in terms of clause 59 of the Bill: "different dates may be fixed in respect of the coming into effect of different provisions of this Act". One decides if the amendments to the Medical Schemes Act or Health Act or one of the other 11 Acts are appropriate to make at the same timeas the Bill is brought into operation. Trying to make all the changes, either now or after is going to make it extremely difficult as the country will have conflicting pieces of legislation. The advice NDOH received from its legal team is that you do it all at the same time. There may well be other changes that need to happen later. They will be discovered in the years to come.

NDOH was not suggesting the abolition of medical aids but we also do not need over 76 medical aids with well over 250 different packages that nobody really understands. It is just not viable. What we do need is medical schemes to cover what the Fund does not cover as section 33 stipulates.

On the lack of medication budgets, this is something NDOH has been dealing with throughout year with the provinces. The Department is encouraging provinces to ring fence their medicine budgets so they get a better handle on exactly what those costs are to ensure that it is easier for them to pay within the 30 days stipulated. There are historical accruals which are still being dealt with in many of the provinces which is far from ideal. The public sector facilities are not the only ones who have been running out of medicines. The private sector has been having lots of problems and NDOH has been trying to assist them because global supply chains have been seriously disrupted in the last two years.

On caring for tourists, foreigners and South Africans who live abroad, the basic tenet in the current Bill without amendments is that if you are a South African in South Africa you are entitled to healthcare at the point of care no matter how or where you have it. When you are in South Africa, you will get that health care paid for because you pay your taxes. As for tourists and visitors, we need a different mechanism to deal with travel insurance and insurance policies for visitors. When NHI staff is appointed, this will be their job, among other things.

Dr Crisp replied that NHI will increase access and he gave an example of the Diepsloot community that must travel either to Charlotte Maxeke Hospital or into Ekhuruleni because there is no public hospital anywhere near the community. However, a few kilometers down the road from the community there is a private hospital. At one point when he was talking to the private hospital’s management, the occupancy was 38%. How can we have 38% occupancy of a private hospital when a community must drive past it for kilometers in heavy traffic to get to healthcare from a very busy central facility? Right now there is no mechanism for NDOH to purchase healthcare from private hospitals but with the NHI Bill, that is exactly what it will do.

On the funding of central hospitals, Dr Crisp explained that central hospitals are where NDOH trains specialists. There are currently ten central hospitals. The Department has been looking at the categorisation of hospitals amidst need. This must be done because as the country moves towards NHI the Department is experiencing a different set of pressures. The ten central hospitals – and there may be more designated in the future – are critical because that is where it trains our specialists. There is undergraduate training there as well, but all specialist training is heavily focused in those facilities. Therefore there are provisions in the Bill to fund a portion of those budgets directly so that the additional costs associated with training are paid for, not just on the fee-for-service.

On the structures and committees, there are ministerial advisory committees that are brought together and then disbanded on a regular basis. During Covid, NDOH had three ministerial advisory committees. There is the National Advisory Group on Immunization (NAGI) Committee. It is a standing advisory committee because NDOH cannot employ that kind of specialist knowledge. It brings people from universities, specialist bodies, private companies and so on into these ministerial advisory committees regularly.

NDOH has the National Essential Medicines List Committee (NEMLC) which has specialists from all over the country involved from time to time. Such a Committee recommends technical working groups to work on one specific solution which then disband. They have had a technical working group for the NHI coding system and they were disbanded after this operation was completed. The Department is mindful that these cost but if you do not have technical expertise and bring these people together you are likely to make even bigger and more expensive mistakes. Those who are public servants or work within broader government do not get paid when they contribute but private people who are outside of government do get paid.

Dr Jacobs thanked Dr Crisp and invited the DG to make closing remarks

Dr Sandile Buthelezi stated that NDOH would like to continue to engage with Members if they are available on 12 December for the WHO event.

Dr Jacobs reminded Committee members to send through their written submissions. Upcoming meetings were going to be very different as the state law advisors and Parliament's Constitutional and Legal Services Office (CLSO) will share their insight on everything that has been done to date and if all processes are within the legal framework required by the Constitution.

Ms Wilson asked if the Committee had finally reached the end of the process for 2022 and if it would be continuing with those meetings in 2023.

Dr Jacobs replied that there was a final Committee meeting on Friday 2 December as it had to adopt its report on its Eastern Cape oversight visit. He confirmed the legal advisor meetings would be in 2023. He thanked the Committee and NDOH for their attention, dedication and time.

Meeting adjourned.

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