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Mavuso says govt is chasing vote-earning fantasy of NHI without considering practicalities


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Mavuso says govt is chasing vote-earning fantasy of NHI without considering practicalities

BLSA CEO Busi Mavuso
BLSA CEO Busi Mavuso

10th July 2023

By: Marleny Arnoldi
Deputy Editor Online


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In her latest weekly newsletter, Business Leadership South Africa CEO Busi Mavuso has spoken out about the National Health Insurance (NHI) “charade that continues despite its absurdity”.

She is confident that it will not deliver any improvements to healthcare quality in South Africa and, in fact, risks the opposite.


Mavuso says there are better ways to deliver improvements in healthcare, including partnerships with the private sector that have proven to be effective.

“Instead, we continue with this make-believe in which the apparent upsides of the NHI, including access to quality healthcare for all, can be talked about without ever having to discuss the practicalities.


“That way the vote-earning fantasy can be sold to the public without any of the vote-destroying realities of it, particularly how it will be funded and the devastation to be dealt to the private healthcare industry,” she argues.

Government distributed a fact sheet about the NHI early in July, which Mavuso says contains very little about practical implementation, notably how it will be funded.

It refers to a payroll tax on employers and employees, and makes the statement that this must not create an increased burden on households compared with the current system, which Mavuso believes is exactly what will happen.

The fact sheet also contains no analysis at all on what the proposed system will actually cost, referring only to the fact that South Africa currently spends 8.5% of gross domestic product on healthcare.

“It has pages and pages on what kind of health services South Africans can expect, but no calculation of what these will cost,” she notes.

The current system sees half of health expenditure from the private sector, which also employs 79% of doctors. Mavuso explains that if the country was to expand health insurance as it exists to the rest of the population, since only 16% of the population is currently covered by medical schemes, then spend would need to increase six-fold.

That would imply that the current 4.3% of gross domestic product (GDP) spent on the private sector would need to become about 26% of GDP, “which is obviously impossible, but perhaps a slimmed down form of insurance cover is more feasible”.

Health insurance giant Discovery has calculated that a modest NHI would cost R200-billion and would require personal taxes going up by a third, or value-added tax rising to 21.5%, or a mix of the two.

The fact sheet also makes no reference to the fact that the pilot projects for the scheme failed dismally, nor to the fact that the existing healthcare system has been deemed woefully inadequate.

Mavuso cites the previous health ombudsman Professor Malegapuru Makgoba as saying that the Gauteng Health Department has no leadership, no capacity and no vision, while the Eastern Cape Health Department is dysfunctional and embarrassing.

“Yet, from these ashes, an NHI must somehow emerge by closing down private health insurance and forcing its members into a national scheme,” she argues.

She quotes Health Minister Joe Phaahla as saying those who criticise the NHI are heartless about those who do not have access to quality healthcare, but adds that business would be strongly in favour of universal healthcare that is practical and affordable.

“I would argue that it is the charade of an NHI with no prospect of successful implementation that is truly heartless. A cynical attempt to win votes without the hard work of creating a real workable plan.”


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