However, with the current economic squeeze and medical inflation outstripping normal inflation, many scheme members, especially the younger and healthier ones, are downsizing to more affordable plans and/or tailoring existing plans to better suit their pockets. Thousands of internet users are clicking on a new app called medicalaid.com (50 000 organic searches per month currently), to check on their options within plans and exploring other schemes to better manage shrinking domestic budgets. As of January, this year, there were seventy-three schemes collectively offering 311 options.
When various crucial sections of the NHI bill – now only awaiting the seemingly inevitable signature of President Cyril Ramaphosa – are proclaimed, medical aids as we know them will cease to exist. NHI Chief, Dr Nicholas Crisp, says he recently learnt that the President’s legal team takes three months or longer to prepare a full report of any new law before making recommendations.
According to the National Department of Health, (NDOH), most medical services, (besides cosmetic surgery and a few other minor procedures), will be paid for from a single State health fund that will have to dole out well over R200 billion per annum to cover (and improve access to), existing healthcare for all sixty-two million South Africans. Healthcare will become a free ‘social good,’ instead of a paid-for option, with all providers paid at predetermined rates by the State.
Crisp says benefits will depend on evidence that the treatments are ‘appropriate, affordable and legal.’
“The current public sector benefit range is very wide so it can be expected that the Fund will pay for a wide range of benefits,” he adds.
Crisp says the State currently spends R265 billion per annum, R200 billion of this on ‘personal health benefits,” compared to the private patient spend of R277 billion a year, 85% through their medical aid schemes.
“About half of this is profitable spend on health benefits and one third is spent on financing the complexity of the 311 options,” he adds.
An unprecedented and outraged private sector push back against the NHI bill across the board seems certain to end in a Constitutional Court challenge – unless President Ramaphosa sends the bill back to parliament or pre-empts matters with a judicial review – unlikely given his public pronouncements and an upcoming general election in which the ruling ANC stands threatened. This would further delay NHI implementation, and the challengers hope, result in crucial legislative change to the bill and/or court-ordered wider consultation. Health economists and top funders are skeptical that the national department of health (NDoH) will be able to deliver universal health coverage at current levels of quality across the board, especially given the NDOH’s R200 billion NHI price tag of, more taxes being needed per annum.
Says Discovery Health’s Chief Commercial Officer, Deon Kotze, “That NDOH cost estimate equates to R714 per person per month available for healthcare services. That’s approximately 60% of what’s currently available to scheme members on Prescribed Minimum Benefits. It means that for those relying on PMB’s by virtue of their scheme contributions, their contribution in taxes will increase by 31% – but they’ll get 69% less in healthcare services.”
Crisp says Covid showed that public sector intensive care costs, (for example), were far lower, while the State’s single purchaser fund would enable ‘huge economies of scale’ in procurement.
“This kind of back of the cigarette box calculation is unhelpful,” he adds.
Craig Comrie, CEO of the Health Funders Association and Profmed, says, “the message from our perspective is don’t panic. This is a policy conversation and implementation will take decades – we’ve yet to see a money bill and we’ve heard extraordinarily little from the finance minister Enoch Godongwana or other senior cabinet ministers on how this will be financed. The reality will only kick in when they define what benefits the NHI will pay for – and you can only define that when you have a budget.” Here Crisp agrees, describing this comment as ‘sensible.’
Both the Board of Healthcare Funders managing director, Dr Katlego Mothudi and Roseanne Harris, Discovery Health’s Head of Policy and Regulatory Affairs, red flagged various conflicting sections of the NHI bill.
Says Harris, “Section 33 says that only once the NHI is ‘fully implemented’ will there be any restrictions on what medical schemes can offer. However, Section 58 is a schedule of changes to existing legislation which is immediately in effect. That’s simply inconsistent.”
Crisp rebuts this by quoting Section 59; “Different dates may be fixed in respect of activating different provisions of this Act.”
“People must read the entire bill and the other Acts that remain unrepealed,” he adds.
Dr Mothudi believes the exclusion of medical schemes from funding the rendering of reproductive services will discriminate against women because of Section 58 of the NHI bill.
“The National Health Act, (NHA Section 4), provides for free maternity services for pregnant women and children under six years old. However, the NHA excludes this free service for those who are already members of medical schemes, while Section 58 of the NHI bill stops them from accessing care via medical aid membership. That means many women will be left in the lurch, unable to access reproductive care in either sector. Remember, this section can be proclaimed immediately in terms of the current NHI bill, making resolving this even more urgent than Section 33 which centralizes all services to the NHI fund and leaves medical aids with minor coverage like cosmetic surgery,” he adds.
Crisp disputes this, saying, “it may be a long time before Section 59 is implemented and there will still need to be regulations to flesh this out.”
He said the NHI critics seemed unable to distinguish between when an Act was assented to (as in President Ramaphosa signing it), and when sections of it were proclaimed, thus putting it into legal effect.
“Besides we don’t even have a Benefits Advisory Committee yet, nor even a Board!’ he exclaimed.
The critics said that the NHI bill was passed without amendment despite ongoing objections dating back to its first iteration, something Crisp also disputed.
“This is a slap in the face of parliament. The Portfolio Committee made twelve pages of amendments. Just because a particular input is not incorporated doesn’t mean there were no amendments.”
Harris said she had, “no clue which sections will be proclaimed first and there are still fundamental constitutional flaws in the way the bill is written.”
Crisp responded, “Nor did they ask! It should be obvious; that those sections establishing a Board and the administrative machinery will be first.”
The critics said that if the bill went into a legal challenge (every key private healthcare collective canvassed confirms that they’ve briefed lawyers) it would be a ‘hugely lengthy’ process that would hinder creating better access to healthcare.
Harris said another “blatant error’ in the NHI legislation was Section 49 which incorrectly stated that medical scheme tax credit was paid to medical aids, when in fact they were reductions in what taxpayers paid in tax.
“Basically, the whole piece of legislation is clumsy and conflictual and there has been a lack of proper consultation with the private sector and other stakeholders,’ she said.
Again, Crisp pushed back.
“This Bill has been in parliament since 2019. Thousands of people have made comments, hearings, consultations, debates. What she really means is that there were other parties that disagreed with the inputs that she would have liked to see.”
The critics say that once President Ramaphosa signs the bill into law, the minister is empowered to incrementally proclaim any section he chooses.
Says Mothudi, “The challenge is not knowing which sections of the bill will be proclaimed first. It’s dangerous just to look at section 33 which tells us medical aid will evolve into complementary role when the minister has proclaimed that the NHI is ‘fully implemented.’ There are other sections that are more imminent, like 57 and 58, that talk to legislative changes that would be affected to empower the NHI bill, like the Medical Schemes Act.”
Crisp was curt, “all they had to do was ask.”
Mothudi said there’s a disconnect between the intention of the bill and what it says.
“A lot of people think those of us commenting on the bill are against the NHI. On the contrary, we want a situation where an NHI leads to improvement in access to quality healthcare services. When we interrogate how the bill was written we think it goes against quality and access to healthcare services. We can only hope that sense will prevail. I don’t like using the term interdict, I prefer the words judicial review,” he added.
Crisp challenged Dr Mothudi to elaborate on exactly how the bill would go against quality and access to healthcare services.
He says his team is working with the Presidency and Treasury on implementation of the bill.
“I can’t comment on each of these objections now, whether they’re about transitional provisions, or the repealing or amendment of laws,” he said.
All key players interviewed said any web application like medicalaids.com which helped people navigate the labyrinth of medical scheme offerings was welcome, but encouraged the use of brokers to ensure members understood the value propositions.
Crisp says brokers cost the healthcare system R2, 7billion in 2022.
“Imagine if there was one standard set of guaranteed benefits and nobody needed to pay for brokers to help them navigate the 311 options? This money could then be spent on patient care.”
Crisp says that in 2022 private medical schemes collectively had 833 trustees while a CEO’s (Principal Officer’s) remuneration ranged from R100k to R8,6m, with fourteen of them paid over R4m per annum.
“One scheme, (not an administrator), spent R280m on marketing alone This is a very expensive way to administer payments for health services,” he stressed.
Author: Chris Bateman