National Health Insurance (NHI) Bill: NCOP delegate & DoH briefing, with Health MEC

Meeting report

The Chairperson invited the NCOP delegate to the National Council of Provinces (NCOP) to make his introductory remarks.

Mr E Njadu (ANC), Western Cape Delegate to the NCOP, stated that his mandate was to brief the province on the NHI Bill that was tabled in the National Assembly and referred to the NCOP for finalisation. He was accompanied by officials from the NDoH.

The Chairperson called on the Minister of Health in the Western Cape Government (WCG), Dr Nomafrench Mbombo, to make her opening statement.

Minister Mbombo remarked that she was only observing and was not planning to give input.

Mr Njadu, said the NCOP was in the process of briefing all nine provinces on the NHI Bill over a period of two weeks. The Bill did serve at the National Assembly which referred it to the NCOP. After the briefings, provinces would be required to hold public hearings and return to the Select Committee of Health to discuss the negotiating mandate of provinces and the final negotiating mandate of the Bill. A report would subsequently be tabled in the NCOP for consideration.

NDoH Presentation
Dr Nicholas Crisp, Deputy Director-General (DDG): NHI, NDoH, said the presentation is similar to the one being made to all provincial legislatures. The NHI Bill would bring about substantial changes to the entire health system, both public and private sectors. The Bill is fairly complicated but it does not repeal the National Health Act or other pieces of legislation that are currently being relied on.

The Bill seeks to establish the NHI Fund, its functions, powers and duties and provides for the control of the Fund by the Board. The Bill further seeks to define beneficiaries of services covered by the NHI Fund, including population registration. The Bill provides for the contracting of accredited healthcare service providers and allows the Minister of Health to determine criteria for accreditation and reimbursement of healthcare providers. The Bill also provides for the Minister of Health to determine health care benefits that would be reimbursed through the NHI Fund. The Bill deals with other pieces of legislation that need to be amended simultaneously to make the system workable. Professionals in the various professional councils must be registered to receive money from the NHI Fund. Significant changes to the National Health Act and some changes to the Medical Schemes Act are necessary to enable the NHI Fund to play the role that is envisaged.

Transitional arrangements in Phase 1 are scheduled to run from 2023 to 2026 and include initiatives to strengthen the healthcare systems. Phase 2 is scheduled to run from 2026 to 2028 with a continuation of initiatives to strengthen the healthcare systems. During Phase 2, additional resources as approved by Cabinet, would be mobilised and selective contracting from private healthcare service providers would be considered.

(See Presentation)

Discussion
The Chairperson called on Dr Kariem to comment on the presentation and the impact of the NHI Bill on the Western Cape province.

Dr Saadiq Kariem, Chief Operating Officer (COO): DH&W in the WCG, said the Department strongly endorsed the global movement towards universal health coverage which would enable health equity without creating financial hardship. The Department supported the strategic intent of the Bill to assist in achieving universal health coverage. The Department had made representations to the NDoH and the Portfolio Committee on Health and took part in the public participation process. Should the Bill be signed into law, the Department remain committed to working with the NDoH to achieve the intent of the Bill and the intended reforms. This would be done in a responsible manner. Valuable lessons were learnt from the pilot projects in Knysna and Bitou in terms of the contracting units outlined in the presentation. While each province is required to designate one area as a pilot project, the WCG expanded the lessons learnt from the pilot projects to three other areas. The intention of the Bill, i.e. to provide universal health coverage is globally supported by many countries.

Mr C Fry (DA) asked how mandatory prepayments from the NHI Fund would be managed and enforced considering that it would have an impact on the livelihoods of service providers. He wanted to know how the exclusion of illegal foreigners would be managed. Mental health is difficult to identify at the primary care level. He sought clarity on how referral pathways as conditions of entitlement to services, would affect patients seeking mental health care.

Ms R Windvogel (ANC) said the Bill was long overdue. She asked if a domestic worker or farm worker would be assisted by the private sector or referred to the public sector. She wanted to know if any hospital would be able to claim from the NHI Fund irrespective of the conditions of the facility.
 
Mr T Klaas (EFF) said no one who was cited in the Zondo Commission report, had been arrested. Therefore, he feared that people who do not have clean hands would have access to large amounts of money. He enquired how people from informal settlements could get access to employment opportunities in the NHI project. He stated that it was too early to implement NHI because the leaders of the country would be known after the upcoming elections. The money would go into the wrong hands if given to the same people who are now in government. He suggested that the process be delayed until after the 2024 elections.

Dr Crisp replied that access to universal health care would be achieved through mandatory prepayments. The only way to afford prepayments is through raising taxes. Some services would not be provided for by the NHI Fund and will need another form of payment. The Bill gives consideration only to the health condition of a patient irrespective of whether the person is poor or rich because health is a public good. A person with medical aid can go to either a private or public hospital and be charged at maximum medical cost rates while a person without medical aid can only go to a public hospital without any charges. Parliament annually appropriates 15% of total public spending on health care which will increase up to 20% under NHI. The costs would systematically be reduced because the pooling of funds would save money. He replied to the issue of illegal foreigners by stating that the NDoH had been working closely with the Department of Home Affairs and DIRCO to identify foreigners. During the Covid-19 period, it was found that two-thirds of the almost three million people identified without IDs, were South Africans and that a significant number of people had more than one ID. The Department in collaboration with the Department of Home Affairs, is working towards a comprehensive biometric system. Illegal foreigners is a big challenge, especially in Limpopo and the North-West provinces. But health practitioners do not discriminate and will treat people when they arrive at a clinic. The clauses in the Bill stipulate adherence to all international objectives in terms of refugees and asylum seekers.

Dr Crisp explained that entry at the primary healthcare level requires everyone to register with a primary healthcare provider for access to preventative healthcare services. But for serious mental health problems, practitioners would refer patients to wellness centres. The more than 11 000 general practitioners (GPs) in the country must be registered on the Master Health Care List to allow GPs to become more integrated. During Covid-19, the integration of medical teams helped with referrals to private GPs. Through the referral system, farm and domestic workers would not be required to make payments individually because it would be covered through the NHI Fund. He replied to Ms Windvogel that the intention is for all service providers to be accredited and the quality of all facilities to be trusted. In the first five years, poor facilities would have to be tolerated but incentives for improvement must be created. He shared Mr Klaas’ concerns about money being stolen. He explained that the fund would operate similar to SASSA, i.e. the Provincial Treasury would allocate the money to the fund on a regular basis for payment of expenses incurred by the province. He agreed that informal settlements must be accommodated. Private practitioners must be encouraged to work in informal settlements. The employment strategy in facilities or service providers falls outside the scope of the NHI Fund. The administrative office and service delivery platforms would still be allowed to employ their own staff. The Bill grants managerial autonomy to hospitals to employ their own staff and professional practitioners. He said it was technically too late to delay the implementation of the Bill. Implementation needs to be done urgently to improve the existing systems.

Mr Njadu said Members of Parliament are representing citizens who cannot afford proper services. He asked if the suggestion to delay implementation meant that people must rather die.

Mr Fry asked if the establishment of an Operational Committee to oversee operations and logistics had been considered. He sought clarity about the arrangements to get medical practitioners to work in outlying areas. In terms of the Bill, provinces would be delegated to provide health care services. He asked if it differed from what provinces were currently doing. Medical scheme tax credits and a surcharge on personal income tax are considered sources of NHI funding. He was concerned about taxing an already overburdened population and about contributions that might become too expensive before it is even implemented.

Ms Windvogel asked why the private sector is not being regulated. She had visited some of the NHI pilot projects in the Southern Cape and noted a difference in the level of services provided. She felt that people should receive services regardless of their social status.

Mr Klaas confirmed that he did experience a difference in the level of services at a public hospital compared to Mediclinic. Services at Mediclinic are much more expensive. He asked if a comparison of prices would be done before funds are allocated so that public hospitals such as Groote Schuur can get more money.

The Chairperson asked if consultations with medical aid schemes and civil society organisations had taken place in the conceptualisation of the NHI to test how it would be implemented. Chapter 8, paragraph 32 of the Bill refers to the functions of the Department. He sought clarity about the annual allocation to provinces which is separate from the NHI Fund. He wanted to know if this meant budget cuts for provinces. He asked if it would be worthwhile for medical aid schemes to continue business if their role is to be limited to providing gap cover.

Dr Crisp replied that it is envisaged for the NHI Fund to be a small entity with about 500 staff members in five years. The current staff complement consists of 60 members with the majority in the procurement space. The Fund does not have a digital service. A transversal system is being built in collaboration with provinces and the private sector. Units that do not currently exist would be designed to be digital and self-managed which would not need a large number of people. The Department does not have the capability to define benefits, which is a highly complicated process. At some point, a bank account would have to be opened with the assistance of National Treasury. A Corporate Services department would be needed for general services. A Remuneration Committee is required to make decisions about the remuneration policy. In the transition period, the Board of Directors plays the role of getting operations in place. He stated that the NHI Fund would not be administering medicines. In terms of section 32(2) of the Bill, the Minister may introduce amendments for the purpose of centralising the Fund. The money would be allocated to the Fund for buying services from provinces. The Fund has a mechanism in the Bill for block payments to, for example, pay the overheads of a hospital as a block. Head Office would be paid through a provincial equitable share but the hospital would get the money from the Fund. Because the Western Cape already make use of detailed cost centres, it would be easier to implement the mechanism in this province without much impact on the amount of money but the channel through which the money travels might be different. For example, if Somerset Hospital is accredited and is paid for by the Fund, the accreditation certificate would be presented when the hospital buys supplies from providers of health products. But for medicine purchases, which are procured through the central procurement unit, prices would be reduced. The process might be less dramatic in the public sector but in the private sector where medicines are charged up to ten times more, prices would dramatically change. These types of market price changes will happen over time. All provinces report on the stock feasibility system which enables the Department to know at any point of the stock availability at all hospitals and clinics because it is monitored nationally. This allows for moving medicines around to prevent some facilities from running out of stock. It is envisaged that this system would continue to be run in a collaborative manner. Under section 32, the provinces must manage services but the money would not be allocated through the provincial equitable share. The provinces will continue to deliver personal and environmental health services which will still be funded through the provincial equitable share as a source of funding.

Dr Crisp, explained that the existing 72 medical aid schemes in the country have 308 packages. It is envisaged to have only one package under the NHI. Fixing the systemic problems in the private and public sector would render between three and four medical aid schemes with five to six packages. How this would be consolidated is open to speculation. The reforms are significant and would not happen at once. He agreed that services at NHI pilot projects are better than other public facilities because lots of money had been invested in the projects. Discussions with medical aid schemes, service providers and hospital groups had been constructive and were ongoing because the government needs to service all citizens. He remarked that more work needs to be done because the insurance industry is difficult to regulate. Although there is disagreement on some matters, discussions are clear and intentional.

A female official from the DH&W enquired about user registration. She wanted to know how the determination is made about which health facility South Africans should visit to register. She understood that complaints would be managed at the local level at a contracting unit. At a higher level, the Fund would manage complaints and there would be an appeals tribunal. The current system makes provision for a national complaints management guideline, a complaints management mechanism at clinics, and the Health Ombudsman. She wanted to know if all these structures would be done away with under NHI. In terms of the amendment schedule on page 41, the Bill would insert a subsection about the promotion of community participation in the planning, provision and evaluation of health care services. She wanted to understand how this would function under the NHI. She asked if the structures of participation under the National Health Act would continue to exist.

Dr Crisp replied that the Bill does not intend to remove any person’s right to choose. The user has the freedom to register at a point or area of his or her choice. For example, in Gauteng, people who commute daily from Limpopo and the North-West provinces would have to choose the area to receive primary health care. In the capitation model, the only consideration is linking the ID number to a contracting unit. A person who moves around to different areas cannot be denied health care. A framework with seven options is being considered but this might change over time. He advised that complaints referred to in the Bill relate specifically to the NHI Fund, i.e. if a person has unjustifiably been denied health care. The current complaints mechanisms would remain in place. The public as a user or service provider must have the right to lodge a complaint and have it suitably dealt with. The clause on page 41, is in addition to the National Health Act and adds to clause 31 in terms of the current provisions of planning. At the time, the authors felt the motivation to include community participation in planning. It adds responsibility for managers in the health system to ensure consultation during the planning of community health services. The responsibility of the MEC is to manage the whole system, both public and private sectors. Historically, the private sector was allowed to operate independently. In the Western Cape, the MEC has a regular forum with private service providers which the NDoH supports because it helps with the reforms in the health care system. The NDoH would encourage private hospitals to engage the communities which they serve. Currently, they are not serving geographical communities, which makes community engagement more difficult. Although it is not a statutory requirement, it would serve a good purpose.

The Chairperson thanked the officials from the NDoH for the comprehensive presentation. He requested Mr Njadu and the WCPP Public Education and Outreach Community Development (PEO) officials to remain for deliberations on the programme for consideration of the Bill.

Resolutions and actions
The Chairperson asked the PEO officials to assist the Committee with informing all relevant stakeholders and with identifying venues and placing advertisements for public engagements.

Ms Bakubaku-Vos drew attention to Social Development oversight visits where Members were unable to trace anyone to engage with because it appeared that municipalities did not inform the communities. She supported the Chairperson’s request for assistance from the PEO with the arrangements for public engagements on the NHI Bill.

The Chairperson said the Administration Team provided some dates, being mindful that the Energy Crisis ad hoc Committee was also busy with public hearings. The suggested venues are in Beaufort-West, George, Caledon, Cape Town, Saldanha Bay, and Vredendal. He was considering adding Worcester as a venue because not much has been done in the Karoo except for in Beaufort-West. He asked for input from Members on the additional venue. The provisional dates are 18 – 20 September 2023. The public hearing in Cape Town will be held on 22 September 2023 while 26 September 2023 is proposed for Saldanha Bay and 27 September for Vredendal. A date would have to be arranged should a hearing in Worcester or Ceres be accepted.

Ms Windvogel asked if all regions would be covered.

The Chairperson confirmed that all six district municipalities would be covered. He was concerned about expecting people from Worcester to travel to Caledon.

Ms Windvogel said the Boland should be included if all districts are meant to be covered.

The Chairperson agreed and suggested Paarl, but thought that it might be too close to Cape Town.

Ms Bakubaku-Vos said people from Worcester and Ceres are closer to Paarl.

The Chairperson agreed to consider Paarl as a venue.

Mr D Plato (DA) suggested Oudtshoorn instead of Beaufort-West which he felt was overloaded with public hearings.

The Chairperson said in his discussion with officials, he suggested Calitzdorp as an option.

The Procedural Officer said transport arrangements could be made for people who are not close to the venues to ensure that all areas are covered.

Ms Bans said Beaufort-West is the Central Karoo and convenient for people in the nearby towns to travel to. It would be difficult for those people to travel to the Southern Cape.

The Chairperson sought consensus from Members who agreed to remain with the venue in Beaufort-West.

Mr Thembalethu Keswa, Manager: PEO, WCPP, said the PEO is ready to assist the Committee and would be liaising with the Procedural Officer once the schedule is made available. Based on the schedule, engagements with participants at Thusong Centres and municipalities would proceed. All relevant information would be advertised to raise awareness in communities.

The Chairperson sought clarity on whether the PEO could also assist with invitations to stakeholders and arranging venues.

Mr Keswa, replied that it was difficult to commit in terms of transport arrangements which involved finances. He undertook to discuss the matter with the Procedural Officer.

The Chairperson said the process is supposed to occur within a six-week cycle and the Committee would try its best to adhere to the timeline. The Bill would be advertised in various newspapers after today’s meeting. He requested Members to communicate the details to stakeholders in their constituencies. A copy of the advertisement and the Bill would be made available to Members. Following the public participation process, the Committee is expected to submit a negotiated mandate to the NCOP to indicate either its support or rejection of the Bill or propose amendments to the Bill. The date of negotiating the mandate would be communicated in due course.

The meeting was adjourned.