The deadly NHI

by Jonathan Witt

There is no such thing as “universal healthcare”. Quite the opening salvo, I realise, but it’s a very simple truth as can be seen across the world. Regardless of how well any specific healthcare system is funded and managed it will never be able to provide truly universal access to absolutely all medical care and therapy. This is because healthcare is an exceptionally broad and complex field. If we consider restaurants and food as an analogy it may be possible for a government to provide the entire population with a fast food meal every day, but it simply wouldn’t be feasible to feed everyone a Michelin star dish daily.

Even the most rudimentary thinker can figure out that ‘universal gourmet food’ is a laughable idea unattainable due to limited ingredients, the chefs to prepare them, and the locations in which to eat, amongst other points of failure. Medical care is so much more vast than the food business that if a menu listed every single available medical investigation and intervention it would take you days just to read it. The idea that each and every aspect of healthcare could ever be freely accessible to every member of the population is sheer insanity. Yet the notion of universal healthcare has become so commonplace as a principle and a trick of language that it is recklessly bandied about by politicians and the general public alike.

Enter South Africa’s newly approved National Health Insurance (NHI) bill, which has passed through Parliament despite numerous objections from a litany of stakeholders, and now waits to be rubber stamped by the President. I have been ringing alarm bells about the NHI since it became a major policy goal of the ruling African National Congress (ANC) in the late 2000s. On paper the NHI promises to provide all citizens with ‘free’ access to healthcare in order, we’re told, to rectify “inequality” in this regard. This sounds awfully noble and naturally that’s the idea. If you disagree with the NHI then it must certainly be because you hate the poor or don’t want to share access to your local private hospital. Nothing could be further from the truth.

In the first instance it is unclear what this free access will be to – free access to headache tablets? Free access to antibiotics? Free access to CT scans? Free access to surgery? Free access to renal dialysis? Well, no – in 1997 the Constitutional Court heard the case of Soobramoney v Minister of Health, Kwazulu Natal. In this landmark case and subsequent judgment the court stated that Mr Soobramoney did not in fact have the right to access lifesaving dialysis for his chronic renal failure. The court ruled that despite the universal right to medical treatment idealistically enshrined in the Constitution the State was not required to abide by this in the face of an under-resourced healthcare system. Thus we have legal precedent for the public health system to deny you any therapy based on the availability thereof and the viability of expending it on you. The idea that NHI will improve this as opposed to worsening it is pure fantasy.

In the second instance there is no reasonable path along which this process will do anything to advance progress against inequality. In fact the NHI is likely to deepen inequality due to all the externalities which will stem from it. In order to make the NHI a reality the Department of Health needs to find several hundreds of billions of Rands it simply does not have. The Treasury has for years been rebuking attempts by various Ministers of Health for this level of additional funding. However the passing of the NHI bill and the ANC’s flailing performance as a governing party means that the funding is now a priority. It is unclear how exactly the Government intends to raise all of the necessary money for their new pet project, but what is clear is that a large portion will come from increasing income tax on the mere 7.4 million taxpayers who fund national services for more than 60 million citizens. Regardless there is little doubt that this will be the first port of call for the ill-fated program.

The creation of a new tax to fund NHI and the inevitable withdrawal of any tax credits related to medical aid payments is likely to collapse private medical funders as we know them. The majority of the approximately 9 million people on some form of private health insurance, which grants them various levels of access to private healthcare, are on lower level plans closer to the bottom end of the pricing scale. It is quite obvious that increased taxation on this section of the market will cause a massive drop off in those who are able to afford their monthly medical aid contributions. As this occurs the economies of scale will fundamentally shift resulting in medical aid costs rising significantly for those still able to pay the double tax. Ultimately the cost of private health insurance will increase several orders of magnitude making it largely unaffordable for anyone but the very wealthy.

At this stage the government need not have implemented a single further aspect of the NHI and the economic damage could be enough to further impoverish millions of people, as deteriorating access to quality healthcare leads to a mass emigration of entrepreneurs and professionals unwilling to chance their lives and that of their families. ‘Let them go, voetsek!’ you can almost hear Malema chant from behind the walls of his Hyde Park mansion, however with them goes your tax base and with that any hope for the future of this country. In fact even if the NHI were in itself a brilliant idea few doctors are going to hang around in such an environment to form a part of it – we must remember that the majority of doctors including specialists work in private healthcare and will have no reason to stay in South Africa when their practices are obliterated.

However, even if I am mistaken and the small number of people who pay all of the taxes not only tolerate an increase in their burden but also somehow maintain their medical aid memberships, the next steps of rolling out the NHI are guaranteed to crumble their resistance. This is because the government has designed this legislation in keeping with all socialist diktat which ensures it has complete central control and no competition whatsoever. I have heard many doctors and other well-informed people pass comments which make it clear that they believe they’ll just be able to opt out of National Health and will still provide or attend private healthcare at their whim. This of course will be illegal. The NHI makes clear that the State and only the State will be the purchaser of healthcare. Medical aids, at least in their current form, will be outlawed. Private hospitals will sell beds and services to the government who will then pass these on to you at a time and place of their choosing. The only provision in the bill which gives some respite is that any service not provided for by the government will be allowed to be offered by the private sector. This should not create any solace though because the hijacking of the private sector will mean that on paper at least the NHI will provide all services.

I say on paper because even if private and public healthcare were merged tomorrow the actual number of patients treated would change very little. Public hospitals constantly run at terminal capacity, and private hospitals while better managed and generally more efficient, thanks to a profit incentive, are also usually at 90% capacity or greater. Thus nothing will actually change at the bottom end and everyone who isn’t currently there will quickly find themselves a member of the proletariat. Thereafter it’s highly probable that all healthcare including those many pockets of excellence currently found in State healthcare will simply disappear. Doctors including general practitioners (GPs) will all either become salaried employees of hospitals or will bill on a fee for service basis as is the current situation in the private industry. The issue here is that the fees will be set by government and based on some proposed rate sheets, which have already been discussed and leaked, the remuneration for healthcare professionals appears to be 5-10 times lower than what is currently market standard.

If this doesn’t already have you very concerned then you should know that it’s highly unlikely you would ever be able to choose your GP or the hospital you’d like to be admitted in ever again. Since the system will be centralised, likely by province and in some instances regions, you will be allocated appointments by availability. This will function in a similar way to what currently occurs in the United Kingdom where waiting periods to see a family doctor are around 2 weeks. Even if you get an appointment earlier and with a doctor with whom you have a relationship the NHI will further disappoint with its access to medicines. Perhaps you have hypertension and need chronic treatment. Before the NHI you took a combination tablet which incurred you a copayment at the pharmacy. After implementation of the NHI you will take whatever drugs the entire system has decided to stock based on a cost benefit analysis. If that isn’t your particular hypertension drug, or contraceptive pill, or diabetes medication then you’ll just have to make do with what will likely be the cheaper older inferior version.

The real question is why are the ANC and those who support this catastrophic approach to healthcare doing this? Some simply have not applied their minds and are ignorant. Most, however, will claim good intent and they will of course deny any of the negative outcomes stated above. Indeed proponents of the system believe the NHI will only improve things and place a rainbow defecating unicorn in every back yard across the country. However there is only one real reason for all of this; money. Simply put private healthcare is the single largest pot of gold to which the ruling party and their cadres have no access whatsoever. Funds go from patient to provider either directly or through medical funders which act as middle men. The reserves held by medical aids are worth several billions of Rands alone. The entire industry is worth tens if not hundreds of billions more. By making themselves the single source of everything healthcare the government will ensure that they have full access and control of all of these funds. Then as they have done with Denel, Eskom, Transnet, SAA and everything else they’ve run they will rob the system blind and take away any functionality which did exist.

Unlike the destruction wrought by every parastatal and private entity into which the ANC’s tentacles have crept, there is no backup plan to no healthcare. The average man in the street can figure out solar or water sterilisation or personal security, but he won’t be able to figure out the difference between Camper’s fascia and Scarpa’s fascia as he dissects his way to his child’s inflamed appendix. Every crisis before this pales in comparison because no other threat created by the ANC and their National Democratic Revolution has presented a genuine existential threat in the same way as the NHI. Even if you survive the additional taxation, the catastrophic impact on the economy and the general downgrading of medical services, you likely won’t survive what comes next. At least not in the end.