WEBVTT 00:00:05.099 --> 00:00:08.599 Hello and welcome to the So What podcast, in 00:00:08.599 --> 00:00:11.099 which political economic analyst J .P. Landman 00:00:11.099 --> 00:00:13.919 discusses the issues uppermost in the minds of 00:00:13.919 --> 00:00:16.640 South Africans. You can find a written version 00:00:16.640 --> 00:00:19.719 of this content on J .P.'s website, jplandman 00:00:19.719 --> 00:00:24.140 .co .za. I am Ruda Landman, and I am your host. 00:00:27.980 --> 00:00:31.660 Hello, and as always, a very warm welcome to 00:00:31.660 --> 00:00:36.299 our So What podcast. This one is dated the 19th 00:00:36.299 --> 00:00:41.259 of November, 2025, and the title, NHI, where 00:00:41.259 --> 00:00:45.719 are we now? Well, after the Department of Health's 00:00:45.719 --> 00:00:48.119 presentation to Parliament three weeks ago and 00:00:48.119 --> 00:00:51.719 the medium -term budget statement, NHI is back 00:00:51.719 --> 00:00:55.399 on the front pages. Where do we start? Yes, indeed, 00:00:55.539 --> 00:00:57.439 it is back on the front pages. You're quite right. 00:00:57.579 --> 00:01:00.380 Look, the first point to make about South Africa's 00:01:00.380 --> 00:01:03.100 health system is that it has to change. Why must 00:01:03.100 --> 00:01:06.260 it change? Because affluent people or wealthier 00:01:06.260 --> 00:01:09.819 people can belong to medical age, but the cost 00:01:09.819 --> 00:01:12.739 of private health care has been escalating way 00:01:12.739 --> 00:01:15.420 above the rate of inflation. So they're subject 00:01:15.420 --> 00:01:18.719 to price pressures which are quite real. Poorer 00:01:18.719 --> 00:01:21.319 people, on the other hand, uses the state health 00:01:21.319 --> 00:01:23.980 system, state hospitals, and we know the state 00:01:23.980 --> 00:01:26.640 of affairs there. Long queues, waiting times, 00:01:27.099 --> 00:01:30.099 supplies not being available, that sort of story. 00:01:30.459 --> 00:01:33.340 So something has to change in our health system. 00:01:33.459 --> 00:01:35.579 I think we can take that as a point of departure. 00:01:36.060 --> 00:01:42.590 But this is not new. Have there been... attempts 00:01:42.590 --> 00:01:44.709 to change it over the years? Yes, absolutely. 00:01:44.969 --> 00:01:46.989 You're quite right. The first attempt to change 00:01:46.989 --> 00:01:50.510 started in 1994 at the dawn of democracy, when 00:01:50.510 --> 00:01:53.090 the first change that was made was free health 00:01:53.090 --> 00:01:56.069 care for mothers and children under the age of 00:01:56.069 --> 00:01:59.489 six, as well as a big emphasis on primary health 00:01:59.489 --> 00:02:02.849 care. Since 1994, government has also embarked 00:02:02.849 --> 00:02:06.409 on a huge clinic building program precisely to 00:02:06.409 --> 00:02:10.780 support and expand primary health care. In 1995, 00:02:11.120 --> 00:02:15.539 there was an NHI inquiry, and it proposed a universal 00:02:15.539 --> 00:02:19.680 basic primary health care package provided in 00:02:19.680 --> 00:02:23.000 the public sector, but with the retention of 00:02:23.000 --> 00:02:26.180 individual choice in the private sector, for 00:02:26.180 --> 00:02:31.139 private sector medical aids. So it was the beginning 00:02:31.139 --> 00:02:35.379 of a process of expanding health care. In 1999, 00:02:35.680 --> 00:02:38.240 the Medical Schemes Act was changed as a result 00:02:38.240 --> 00:02:41.199 of this inquiry, and a couple of important things 00:02:41.199 --> 00:02:44.219 were introduced. Community rating, open enrollment, 00:02:44.599 --> 00:02:47.840 and prescribed minimum benefits that all medical 00:02:47.840 --> 00:02:50.099 aides had were adhered to. So that was quite 00:02:50.099 --> 00:02:54.000 a step forward. In 2002, we got the Taylor Committee. 00:02:54.879 --> 00:02:59.659 And it proposed a four -phase process to achieve 00:02:59.659 --> 00:03:02.520 universal health care based, and this is very 00:03:02.520 --> 00:03:05.919 important, based on multiple funds and a public 00:03:05.919 --> 00:03:09.039 sector contributory environment. So the idea 00:03:09.039 --> 00:03:12.080 of having a monopoly fund or just one fund was 00:03:12.080 --> 00:03:17.270 never on the table. However, this approach of 00:03:17.270 --> 00:03:20.550 having incremental changes and working with multiple 00:03:20.550 --> 00:03:23.930 funds in the private sector, retaining choice 00:03:23.930 --> 00:03:27.610 and supplement that with services in the public 00:03:27.610 --> 00:03:30.990 sector, that came to an abrupt halt in 2007. 00:03:32.189 --> 00:03:34.810 at the conference of the ANC in Polikwane. That 00:03:34.810 --> 00:03:37.129 was the conference, you will recall, where Jacob 00:03:37.129 --> 00:03:39.949 Zuma was elected president. And there the ANC 00:03:39.949 --> 00:03:42.469 took the decision that they want to go for a 00:03:42.469 --> 00:03:44.770 single state -funded national health insurance 00:03:44.770 --> 00:03:49.110 scheme and minimize or limit the role that private 00:03:49.110 --> 00:03:53.310 medical schemes will play. So the 2007 Polikwane 00:03:53.310 --> 00:03:57.099 decision was quite an interruption. or a deviation 00:03:57.099 --> 00:04:00.340 from the approach up till that time. Well, it 00:04:00.340 --> 00:04:03.800 sounds as if it was an interruption of a process 00:04:03.800 --> 00:04:08.939 that had actually been moving towards... Yes, 00:04:09.159 --> 00:04:11.819 absolutely. No question about that. They were 00:04:11.819 --> 00:04:14.400 steady, but certain improvements that were being 00:04:14.400 --> 00:04:17.220 made. The law was changed. Medical aides had 00:04:17.220 --> 00:04:20.420 to change their benefits and their behavior. 00:04:20.660 --> 00:04:23.100 And yes, things were moving in an incremental 00:04:23.100 --> 00:04:25.120 way towards better health care for everybody. 00:04:25.500 --> 00:04:30.699 Why is the idea of the NHI, this single fund 00:04:30.699 --> 00:04:34.300 for everybody, why is it so attractive to its 00:04:34.300 --> 00:04:37.579 supporters? I think two reasons. The one is there's 00:04:37.579 --> 00:04:39.420 the idea that there's a lot of money out there 00:04:39.420 --> 00:04:41.959 that you can mobilize and put into the fund, 00:04:41.980 --> 00:04:44.439 and then you can give everybody the same health 00:04:44.439 --> 00:04:46.939 care. We will come to that. That's the one idea. 00:04:47.300 --> 00:04:49.360 And linked to that, I think the second reason 00:04:49.360 --> 00:04:53.399 is simply the idea of equality, the idea that 00:04:53.399 --> 00:04:55.500 everybody should have the same health care. Some 00:04:55.500 --> 00:04:57.660 people shouldn't have better or worse health 00:04:57.660 --> 00:04:59.800 care than others. I think those are the two ideas 00:04:59.800 --> 00:05:05.279 that drove the NHRA decision. Has anyone put 00:05:05.279 --> 00:05:07.240 some numbers on the table? What will it cost? 00:05:07.779 --> 00:05:09.899 No, not at all. But before we get there, can 00:05:09.899 --> 00:05:12.600 I just make this one point? We have actually 00:05:12.600 --> 00:05:15.220 covered it. And that is that the whole point 00:05:15.220 --> 00:05:17.699 of NHI, the way it is being marketed and sold 00:05:17.699 --> 00:05:20.199 politically to the nation, is that everybody 00:05:20.199 --> 00:05:24.439 will get the same care. The NHI Fund, a state 00:05:24.439 --> 00:05:27.740 -run NHI monopoly fund, will open the door to 00:05:27.740 --> 00:05:30.600 the same care for everybody. And both the Deputy 00:05:30.600 --> 00:05:32.899 Minister of Health as well as the Minister of 00:05:32.899 --> 00:05:36.160 Health and officials have been very clear about 00:05:36.160 --> 00:05:39.199 that. That's the vision. Now that brings us then 00:05:39.199 --> 00:05:43.199 to your very important question, is it affordable? 00:05:43.480 --> 00:05:46.060 Can it be paid for? And that's where it becomes 00:05:46.060 --> 00:05:48.750 very interesting. If you look at the numbers, 00:05:48.949 --> 00:05:51.569 South Africa at the moment has got 9 million 00:05:51.569 --> 00:05:55.170 people who are beneficiaries of various medical 00:05:55.170 --> 00:05:58.389 aids. But the country has got 64 million citizens. 00:05:59.050 --> 00:06:02.269 So if you now take all the private health care 00:06:02.269 --> 00:06:04.709 money plus all the public health care money, 00:06:04.810 --> 00:06:07.329 which the state spends, and you put it together 00:06:07.329 --> 00:06:10.370 in one fund, and you say this fund must now look 00:06:10.370 --> 00:06:13.750 after the treatment of 64 million people. What 00:06:13.750 --> 00:06:15.709 will then have to happen is that the current 00:06:15.709 --> 00:06:18.490 level of medical aid covered by medical aids, 00:06:18.670 --> 00:06:21.550 the current level of service, would have to fall 00:06:21.550 --> 00:06:26.470 by about two -thirds or 66%. So members of medical 00:06:26.470 --> 00:06:30.730 aids could only get about a third of what they 00:06:30.730 --> 00:06:32.829 get at the moment? Yes, that's what it will be. 00:06:32.949 --> 00:06:36.129 In fact, Adrian Gore from Discovery has calculated 00:06:36.129 --> 00:06:39.370 that decline in the service level at about 70%. 00:06:40.160 --> 00:06:44.060 So yes, it's a big drop in the service level. 00:06:44.259 --> 00:06:46.600 So one of two things must happen. Either you 00:06:46.600 --> 00:06:51.379 must raise taxes considerably to pay for 100 00:06:51.379 --> 00:06:54.459 % for everybody, or everybody will have to fall 00:06:54.459 --> 00:06:58.790 down to a much lower level of service. That's 00:06:58.790 --> 00:07:01.269 the stark choice that we are faced with. That's 00:07:01.269 --> 00:07:05.610 what the numbers tell us. Now, the figures that 00:07:05.610 --> 00:07:08.649 I've just been quoting is sort of easy numbers 00:07:08.649 --> 00:07:11.529 to calculate. Much more scientific research was 00:07:11.529 --> 00:07:14.790 done by Genesis Analytics, and they were commissioned 00:07:14.790 --> 00:07:18.029 by the Health Funders Association to look into 00:07:18.029 --> 00:07:21.870 the cost of NHI. And what they have found is 00:07:21.870 --> 00:07:24.970 that NHI will cost almost a trillion rand a year, 00:07:25.149 --> 00:07:28.720 940 billion rand. And here is the really relevant 00:07:28.720 --> 00:07:32.639 number. That is 400 billion rand more than South 00:07:32.639 --> 00:07:35.120 Africa's combined public and private health care 00:07:35.120 --> 00:07:39.819 expenditure of about 530 million. So that's what 00:07:39.819 --> 00:07:42.279 we spend currently, 530. You've got to go to 00:07:42.279 --> 00:07:46.000 940. It's a huge, huge increase. And it would 00:07:46.000 --> 00:07:49.220 imply in their calculations, it would imply that 00:07:49.220 --> 00:07:51.800 personal income tax will have to go on average 00:07:51.800 --> 00:07:56.610 from just over 20 % to about 47 .5%. So it's 00:07:56.610 --> 00:07:59.170 a massive tax increase. There's no question about 00:07:59.170 --> 00:08:02.269 that. And what is quite interesting, Ruda, since 00:08:02.269 --> 00:08:05.750 the act was signed last year, just before the 00:08:05.750 --> 00:08:08.269 elections, what has happened is that a very wide 00:08:08.269 --> 00:08:14.149 coalition of groups have come out against NHI 00:08:14.149 --> 00:08:17.120 on the basis that it is not... fiscally or money 00:08:17.120 --> 00:08:20.660 -wise feasible. It cannot be done. And I'll quote 00:08:20.660 --> 00:08:22.860 you some names. There's the Progressive Health 00:08:22.860 --> 00:08:25.240 Forum, and the word progressive is important. 00:08:25.860 --> 00:08:27.819 There is the Universal Healthcare Association. 00:08:28.579 --> 00:08:31.480 There is the Health Funders Association. You've 00:08:31.480 --> 00:08:33.600 got business group. You've got professional bodies. 00:08:33.700 --> 00:08:36.019 And it looks as if there are even groups in ANC 00:08:36.019 --> 00:08:41.940 which are opposed to introducing NHI. In fact, 00:08:42.000 --> 00:08:45.379 Aslam Dasu, who is convener of the Rikese Health 00:08:45.379 --> 00:08:49.120 Forum, said it best. He said the NHI is fiscally 00:08:49.120 --> 00:08:52.120 unimplementable. There is no feasible scenario 00:08:52.120 --> 00:08:56.039 in which a single tax -financed fund can provide 00:08:56.039 --> 00:08:59.840 all the cover for the entire population. So the 00:08:59.840 --> 00:09:03.279 numbers are quite unforgiving. Either you drop 00:09:03.279 --> 00:09:05.519 service levels or you increase taxes substantially, 00:09:05.779 --> 00:09:08.139 and it's quite clear that more and more people 00:09:08.139 --> 00:09:11.450 in society who are attracted to the idea of NHI, 00:09:11.549 --> 00:09:14.889 are less attracted when they start looking at 00:09:14.889 --> 00:09:18.809 the numbers and what it will mean. Have alternatives 00:09:18.809 --> 00:09:21.110 been developed? Are there alternatives on the 00:09:21.110 --> 00:09:23.009 table? Yes, there are. And it's quite interesting 00:09:23.009 --> 00:09:25.230 if you go back, while the health department, 00:09:25.269 --> 00:09:29.009 after the 2007 decision at Polikwane, were quite 00:09:29.009 --> 00:09:32.769 single -minded in pursuing NHI, a couple of things 00:09:32.769 --> 00:09:35.370 happened. The first one is that in 2014, the 00:09:35.370 --> 00:09:38.889 Competition Commission launched an investigation 00:09:38.889 --> 00:09:41.889 into the private healthcare market. They published 00:09:41.889 --> 00:09:44.309 their report five years later in 2019, and it 00:09:44.309 --> 00:09:48.429 was a very substantial and deep analysis of how 00:09:48.429 --> 00:09:50.289 private healthcare in South Africa operates. 00:09:50.730 --> 00:09:53.610 And they came out with a number of recommendations, 00:09:53.649 --> 00:09:57.710 basically to promote competition and in that 00:09:57.710 --> 00:10:00.789 way drive down the cost of private healthcare. 00:10:01.789 --> 00:10:05.389 Now business for South Africa is calculated based 00:10:05.389 --> 00:10:08.409 on these recommendations by the Competition Commission 00:10:08.409 --> 00:10:11.990 that private health care costs can save as much 00:10:11.990 --> 00:10:15.710 as 20%, can come down by as much as 20 % if one 00:10:15.710 --> 00:10:18.009 implements the recommendations of the Competition 00:10:18.009 --> 00:10:21.610 Commission. But they have not been accepted by 00:10:21.610 --> 00:10:24.230 the Department of Health. Sorry, but the implication 00:10:24.230 --> 00:10:29.360 is that... It could then be cheaper to be a member 00:10:29.360 --> 00:10:32.600 of a medical aid so more people could become 00:10:32.600 --> 00:10:35.159 members. Absolutely. If it was cheaper. Correct. 00:10:35.419 --> 00:10:38.860 And of course, the more people join medical aid, 00:10:38.960 --> 00:10:41.320 at the moment about 14 % of South Africans belong 00:10:41.320 --> 00:10:43.879 to medical aid. If you can push that number to 00:10:43.879 --> 00:10:46.480 say 20 or 25, you take pressure off the state 00:10:46.480 --> 00:10:49.580 system. That's the other side of it. Now, that 00:10:49.580 --> 00:10:51.840 was not the only alternative that developed. 00:10:51.940 --> 00:10:55.919 In 2017, former President Galima Motlante led 00:10:55.919 --> 00:10:58.100 the high -level panel review on South African 00:10:58.100 --> 00:11:02.480 legislation, and his panel recommended a three 00:11:02.480 --> 00:11:06.139 -tier model, which must combine private sector 00:11:06.139 --> 00:11:08.600 medical schemes, government employee medical 00:11:08.600 --> 00:11:12.120 schemes, and the NSI scheme for people who are 00:11:12.120 --> 00:11:14.799 not employed. So again, the idea of a hybrid 00:11:14.799 --> 00:11:21.789 system. In 2024, after the NHI Act was signed 00:11:21.789 --> 00:11:25.590 into law by the president, the Universal Healthcare 00:11:25.590 --> 00:11:28.529 Access Coalition was formed. They came together, 00:11:28.710 --> 00:11:31.809 a variety of people from the industry, and they 00:11:31.809 --> 00:11:34.789 developed an alternative system as well. And 00:11:34.789 --> 00:11:37.929 what they are suggesting is mandatory medical 00:11:37.929 --> 00:11:40.110 scheme membership for high -income individuals, 00:11:40.330 --> 00:11:43.090 so you've got to belong to a medical aid, accompanied 00:11:43.090 --> 00:11:46.769 by mechanisms to pool risk between schemes. and 00:11:46.769 --> 00:11:50.269 converting the current tax benefits, which medical 00:11:50.269 --> 00:11:53.470 aid members enjoy, into an income -related contribution 00:11:53.470 --> 00:11:57.330 subsidy and a new public scheme to compete with 00:11:57.330 --> 00:12:00.710 the private schemes. So again, a hybrid model, 00:12:00.929 --> 00:12:03.950 public plus private, with subsidies where necessary 00:12:03.950 --> 00:12:07.769 and regulation. To strengthen the public sector, 00:12:07.889 --> 00:12:10.490 the Healthcare Coalition also proposed that the 00:12:10.490 --> 00:12:13.990 governance model at hospitals must change. Hospitals 00:12:13.990 --> 00:12:16.690 must be run by independent hospital boards. After 00:12:16.690 --> 00:12:19.950 Tembisa. And I think after Tembisa, you know, 00:12:20.009 --> 00:12:22.409 it's a no -brainer. It's really a no -brainer. 00:12:22.669 --> 00:12:25.870 They also had a rather prescient recommendation 00:12:25.870 --> 00:12:29.330 in their proposals. Not a recommendation, but 00:12:29.330 --> 00:12:32.009 a proposal that the South African government 00:12:32.009 --> 00:12:34.049 must start negotiating with the governments of 00:12:34.049 --> 00:12:37.200 neighboring states. for those states to pay for 00:12:37.200 --> 00:12:39.639 health care of those citizens at South African 00:12:39.639 --> 00:12:43.039 hospitals and clinics. And given the problems 00:12:43.039 --> 00:12:45.139 that we have around that, protests and so on, 00:12:45.200 --> 00:12:47.960 as I say, that was quite prescient. Earlier this 00:12:47.960 --> 00:12:50.519 year, there was yet another alternative put forward. 00:12:50.659 --> 00:12:52.899 Absolutely. The Health Funders Association put 00:12:52.899 --> 00:12:55.779 forward a set of proposals. They call it NHI 00:12:55.779 --> 00:12:59.259 Plus. And what is this NHI Plus? It basically 00:12:59.259 --> 00:13:03.860 says that NHI and medical schemes must all cover 00:13:03.860 --> 00:13:06.879 a common benefit package delivered by the public 00:13:06.879 --> 00:13:10.139 and private providers, so same treatment or similar 00:13:10.139 --> 00:13:12.840 treatment, and all taxpayers will contribute 00:13:12.840 --> 00:13:15.860 to the NHI fund, in other words, a kind of a 00:13:15.860 --> 00:13:19.600 broad tax, either directly or via mandatory contributions 00:13:19.600 --> 00:13:21.840 to medical schemes. So you can either pay the 00:13:21.840 --> 00:13:24.259 NHI fund or you can pay your medical aid, one 00:13:24.259 --> 00:13:27.429 of the two, but you must belong somewhere. which, 00:13:27.470 --> 00:13:29.950 of course, is the same as the Universal Health 00:13:29.950 --> 00:13:34.909 Care Coalition. Now, like the Health Care Coalition's 00:13:34.909 --> 00:13:36.929 proposals, there will be a risk equalization 00:13:36.929 --> 00:13:39.870 between funds and redistributive arrangements. 00:13:39.909 --> 00:13:42.990 We'll see medical aid subsidizing the NHI fund 00:13:42.990 --> 00:13:46.070 for the common benefit package. So, you know, 00:13:46.190 --> 00:13:48.889 it's different proposals. It's different ideas. 00:13:49.919 --> 00:13:52.960 But they all have useful elements one can work 00:13:52.960 --> 00:13:55.639 with. They're all hybrids. And nowhere is there 00:13:55.639 --> 00:13:58.220 a suggestion that there must only be one state 00:13:58.220 --> 00:14:01.460 monopoly fund. Nobody is doing that, which is 00:14:01.460 --> 00:14:05.860 the key difference between the NHI fund and what 00:14:05.860 --> 00:14:08.820 we have currently and what is proposed. What 00:14:08.820 --> 00:14:11.440 is the situation internationally? Britain has 00:14:11.440 --> 00:14:14.879 famously the NHS, for example. Yes, and that 00:14:14.879 --> 00:14:17.720 NHS has been around for almost 80 years in the 00:14:17.720 --> 00:14:21.679 UK. Since 1943? Something like that. And yet 00:14:21.679 --> 00:14:25.879 10 % to 12 % of the British population use private 00:14:25.879 --> 00:14:29.419 medical health care. And the system allows that? 00:14:29.639 --> 00:14:32.919 The system allows that. The most famous one for 00:14:32.919 --> 00:14:35.899 South Africa would come from Thailand, where 00:14:35.899 --> 00:14:38.440 there is the so -called 30 baht scheme. Baht 00:14:38.440 --> 00:14:41.879 is their currency. And you pay... You pay 30 00:14:41.879 --> 00:14:44.000 baht when you go into a clinic or hospital and 00:14:44.000 --> 00:14:46.580 that's all you pay, nothing more. But even there, 00:14:46.639 --> 00:14:49.559 there are free schemes and the 30 baht scheme 00:14:49.559 --> 00:14:52.259 is only one of three schemes. And these three 00:14:52.259 --> 00:14:55.659 schemes compete in terms of efficiency and also 00:14:55.659 --> 00:14:58.440 delivering services to different sections of 00:14:58.440 --> 00:15:01.879 the population. So nowhere else is there this 00:15:01.879 --> 00:15:06.080 idea of a universal monopoly fund. To the exclusion 00:15:06.080 --> 00:15:10.490 of everything else. Absolutely. And this is work 00:15:10.490 --> 00:15:12.929 which was done by Andrew Donaldson and Tamar 00:15:12.929 --> 00:15:15.730 Kahn in their very, very good report, which we 00:15:15.730 --> 00:15:19.649 rely on a lot here in this note, throughout the 00:15:19.649 --> 00:15:22.590 developed world. and developing world, what you 00:15:22.590 --> 00:15:25.669 find are hybrid schemes, not just a monopoly 00:15:25.669 --> 00:15:27.990 fund. And I think that's an important point. 00:15:28.269 --> 00:15:31.169 Do you think the private sector needs regulation? 00:15:31.549 --> 00:15:33.490 Oh, yes, absolutely. Remember, that was recommended 00:15:33.490 --> 00:15:36.210 by the Health Market Inquiry by the Competition 00:15:36.210 --> 00:15:39.710 Commission back in 2019 already, that's six years 00:15:39.710 --> 00:15:42.470 ago. And if you look at the price rises that 00:15:42.470 --> 00:15:45.549 we see in private medical care, which really 00:15:45.549 --> 00:15:47.809 is becoming more and more onerous for private 00:15:47.809 --> 00:15:51.820 medical... members and patients, yes, we do need 00:15:51.820 --> 00:15:55.299 a form of regulation. Again, that is not a unique 00:15:55.299 --> 00:15:59.100 thing. It is fairly standard worldwide. As you 00:15:59.100 --> 00:16:02.840 said earlier, there seems to be a faction in 00:16:02.840 --> 00:16:07.120 the ANC, in the health department, which is really 00:16:07.120 --> 00:16:11.820 ideologically wedded to this single fund monopoly. 00:16:12.820 --> 00:16:16.879 Might there be some shifts which might change 00:16:16.879 --> 00:16:19.090 that? Yes, that's a very interesting point, and 00:16:19.090 --> 00:16:21.649 let's look at that. What is it that must shift? 00:16:22.169 --> 00:16:25.570 What has to shift is the idea, you can have NHI, 00:16:25.590 --> 00:16:28.990 I mean, all these proposals contain NHI form. 00:16:29.350 --> 00:16:32.450 What must shift is what is in the Act of Section 00:16:32.450 --> 00:16:36.690 33 of the NHI Act, which establishes a government 00:16:36.690 --> 00:16:39.950 monopoly. That's the key point. If you take that 00:16:39.950 --> 00:16:43.360 out, Section 33, then... It says that medical 00:16:43.360 --> 00:16:46.159 schemes may not provide the benefits which are 00:16:46.159 --> 00:16:48.580 covered by the NHI. Correct. Absolutely correct. 00:16:48.960 --> 00:16:53.379 So can Section 33 be changed? Well, let's look 00:16:53.379 --> 00:16:57.860 at the different forces that are at work. The 00:16:57.860 --> 00:17:00.539 first force at work is lawfare or court cases. 00:17:00.899 --> 00:17:03.980 There are currently eight cases in the high courts 00:17:03.980 --> 00:17:08.839 against the NHI Act. Now, we cannot go through 00:17:08.839 --> 00:17:11.599 all the arguments of all eight cases, but I think 00:17:11.599 --> 00:17:14.680 it's fairly certain to say that at least some 00:17:14.680 --> 00:17:17.619 of the cases in some of the aspects which they 00:17:17.619 --> 00:17:20.359 challenge will be successful. There's a ninth 00:17:20.359 --> 00:17:23.420 court case, which is not against the NHI Act, 00:17:23.480 --> 00:17:25.960 it's against the National Health Act, which is 00:17:25.960 --> 00:17:29.319 different, and it challenged the notion that 00:17:29.319 --> 00:17:31.440 doctors can be prescribed where they can work. 00:17:31.859 --> 00:17:34.160 This was declared unconstitutional by the High 00:17:34.160 --> 00:17:38.660 Court. sections 36 to 40 of that act. It was 00:17:38.660 --> 00:17:44.339 appealed by the health department and it served 00:17:44.339 --> 00:17:46.480 before there was a hearing in September before 00:17:46.480 --> 00:17:48.779 the constitutional court and we're waiting for 00:17:48.779 --> 00:17:50.460 the outcome of that judgment. But that's the 00:17:50.460 --> 00:17:53.960 National Health Act. The NHI Act, as I say, being 00:17:53.960 --> 00:17:57.880 challenged by eight court cases, there will probably 00:17:57.880 --> 00:18:00.500 be some adverse findings and then you will have 00:18:00.500 --> 00:18:03.420 to do a redesign. There are people who are suggesting 00:18:03.420 --> 00:18:06.660 that it's a deliberate political strategy to 00:18:06.660 --> 00:18:10.140 let the court cases run, let them rule against 00:18:10.140 --> 00:18:13.720 the parts or totality of the act, of the NHI 00:18:13.720 --> 00:18:16.240 Act, and then you're forced to redesign. There 00:18:16.240 --> 00:18:19.079 are people saying that's a strategy. But lawfare 00:18:19.079 --> 00:18:22.240 is certainly one force. And what is happening 00:18:22.240 --> 00:18:24.380 politically? Politically, it's very interesting. 00:18:24.519 --> 00:18:28.259 In January, the DA launched a complaint at the... 00:18:29.150 --> 00:18:32.950 a clearinghouse which deals with disputes between 00:18:32.950 --> 00:18:35.410 coalition partners, members of the government 00:18:35.410 --> 00:18:39.390 and national unity partners. And that was resolved, 00:18:39.470 --> 00:18:42.769 according to the Minister for Planning, in an 00:18:42.769 --> 00:18:45.670 interview that she gave to News24 in January, 00:18:45.849 --> 00:18:49.170 that was resolved with the ANC agreeing to take 00:18:49.170 --> 00:18:53.930 Section 33 of the Act out. However, the Health 00:18:53.930 --> 00:18:57.089 Minister... January 2025. January 2025, the beginning 00:18:57.089 --> 00:19:00.640 of this year. The health minister, Minister Motsoledi, 00:19:00.799 --> 00:19:03.539 reacted very vociferously and said, no, that 00:19:03.539 --> 00:19:06.839 will never happen. But nevertheless, there was 00:19:06.839 --> 00:19:11.319 an agreement. I have made inquiries whether the 00:19:11.319 --> 00:19:13.220 agreement was reached and there is confirmation 00:19:13.220 --> 00:19:15.400 that it was reached. But since then, everything 00:19:15.400 --> 00:19:18.579 went quiet. And I think that gives credence to 00:19:18.579 --> 00:19:20.980 the view that political leaders are waiting for 00:19:20.980 --> 00:19:23.779 the courts to pronounce. And then you can start 00:19:23.779 --> 00:19:26.059 the political process of redoing the act. They're 00:19:26.059 --> 00:19:28.619 not putting their political capital on the table. 00:19:28.859 --> 00:19:32.440 Not yet. Before it's necessary. Before it's necessary. 00:19:32.680 --> 00:19:34.819 So that may or may not be the case. That was 00:19:34.819 --> 00:19:38.119 in January. In February, there were press reports 00:19:38.119 --> 00:19:43.000 that factions in ANC have put forward. suggestions 00:19:43.000 --> 00:19:48.660 on the NHI Act, which provided for the NHI Fund, 00:19:48.819 --> 00:19:51.559 as the Act does, but also for private medical 00:19:51.559 --> 00:19:54.539 aids to keep on functioning and servicing people. 00:19:54.859 --> 00:19:57.119 So it's a kind of, again, the idea of a hybrid 00:19:57.119 --> 00:20:01.000 system. Now that proposal, those proposals would 00:20:01.000 --> 00:20:04.680 take care of the Section 33 monopoly issue. But 00:20:04.680 --> 00:20:08.279 again, it went quiet. The minister was not happy 00:20:08.279 --> 00:20:11.220 with the reports and he said, no, it won't happen. 00:20:11.319 --> 00:20:14.880 Everything went quiet. So there's something brewing 00:20:14.880 --> 00:20:17.480 in the political sphere and we will see what 00:20:17.480 --> 00:20:19.680 comes out. And the minister is obviously not 00:20:19.680 --> 00:20:22.819 the only voice in this whole bigger debate. I 00:20:22.819 --> 00:20:24.700 think that's an extremely important point you're 00:20:24.700 --> 00:20:27.839 making. In fact, I think the more important voice 00:20:27.839 --> 00:20:30.400 when it comes to NHI is not the minister of health. 00:20:30.859 --> 00:20:34.849 It's the minister of finance. For two reasons. 00:20:34.950 --> 00:20:37.390 Only the Minister of Finance can impose money 00:20:37.390 --> 00:20:40.210 bills. The Minister of Health can't do it. It's 00:20:40.210 --> 00:20:42.789 a technical thing and that's what it is. But 00:20:42.789 --> 00:20:46.150 secondly, the question is, is there money? Now, 00:20:46.210 --> 00:20:48.849 it's very interesting the medium -term budget 00:20:48.849 --> 00:20:51.890 statement that we had last week. The Minister 00:20:51.890 --> 00:20:54.730 was very emphatic that he's not going to take 00:20:54.730 --> 00:20:59.769 away or abolish the medical aid tax credit which 00:20:59.769 --> 00:21:03.880 medical aid members enjoy. He called it, quote, 00:21:03.920 --> 00:21:06.960 unquote, an attack on the middle class. Those 00:21:06.960 --> 00:21:09.859 are strong words. Those are strong words. So 00:21:09.859 --> 00:21:11.599 it tells you where the minister comes from. Now, 00:21:11.619 --> 00:21:13.900 this is important because abolishing the tax 00:21:13.900 --> 00:21:17.099 credit and taking that money into the NHI fund 00:21:17.099 --> 00:21:19.099 is one of the ways in which the health department 00:21:19.099 --> 00:21:21.980 wanted to finance or wants to finance the NHI 00:21:21.980 --> 00:21:24.039 fund. It's one of the pillars of their whole 00:21:24.039 --> 00:21:27.299 building. And if you now take that out, there 00:21:27.299 --> 00:21:29.829 is even less money available. So the fact that 00:21:29.829 --> 00:21:32.089 the Minister of Finance has come out so strongly 00:21:32.089 --> 00:21:35.529 against it, I think is quite a serious indication. 00:21:37.009 --> 00:21:39.950 If you look at the budget numbers that we got, 00:21:40.109 --> 00:21:43.170 both in May with the main budget and now last 00:21:43.170 --> 00:21:46.450 week with the medium -term statement, it's quite 00:21:46.450 --> 00:21:48.369 clear that there isn't a lot of money for NHI. 00:21:48.799 --> 00:21:51.740 In fact, there's about just under 10 billion 00:21:51.740 --> 00:21:55.759 rand allocated in the budget to NHI, and that 00:21:55.759 --> 00:22:00.160 is for developing a patient information system, 00:22:00.299 --> 00:22:03.440 developing a central chronic medicine dispensing 00:22:03.440 --> 00:22:06.559 and distribution system, and a medicine stock 00:22:06.559 --> 00:22:09.019 surveillance system. So you're talking about 00:22:09.019 --> 00:22:11.420 infrastructure. You're talking about technical 00:22:11.420 --> 00:22:14.339 infrastructure that helps you to spend the money 00:22:14.339 --> 00:22:16.779 better. That's what the 10 billion is going for. 00:22:16.960 --> 00:22:19.180 That is not nearly enough. If you think that 00:22:19.180 --> 00:22:22.380 you spend 530 billion on health in South Africa, 00:22:22.460 --> 00:22:26.220 10 billion is really nothing. So I don't think 00:22:26.220 --> 00:22:28.539 there's going to be money in the next few years 00:22:28.539 --> 00:22:32.339 for NHI. We can take that as a fairly certain 00:22:32.339 --> 00:22:36.119 thing. So you've got court cases, you've got 00:22:36.119 --> 00:22:38.220 politics, you've got the pressure from money. 00:22:39.180 --> 00:22:44.059 Those three forces may force a change in thinking. 00:22:44.779 --> 00:22:46.619 But there's a fourth force which I think is also 00:22:46.619 --> 00:22:49.079 important, and that is the difference between 00:22:49.079 --> 00:22:51.720 insiders and outsiders. What do you mean by that? 00:22:51.839 --> 00:22:54.920 I saw that heading and I wondered. What it means 00:22:54.920 --> 00:22:59.059 is that Section 2 of the NHI Act is applicable 00:22:59.059 --> 00:23:02.480 to all of South Africa, but not to policemen, 00:23:02.619 --> 00:23:05.400 not to members of the Defence Force, and not 00:23:05.400 --> 00:23:08.400 to members of the State Security Service. So 00:23:08.400 --> 00:23:10.819 those three categories of employees, state employees, 00:23:11.319 --> 00:23:14.900 are excluded from the Act. Now, what it means 00:23:14.900 --> 00:23:17.940 at the moment is that the roughly 1 .2, 1 .3 00:23:17.940 --> 00:23:21.339 million civil servants all belong either to GEMS, 00:23:21.339 --> 00:23:23.720 GEMS is the Government Employees Medical Service, 00:23:23.900 --> 00:23:27.200 a medical scheme, or in the case of higher ranking 00:23:27.200 --> 00:23:30.559 officials, many belong to Discovery and other 00:23:30.559 --> 00:23:32.440 funds. They've got more discretion in who they 00:23:32.440 --> 00:23:34.539 can belong to. Now, if you're going to say to 00:23:34.539 --> 00:23:36.759 all these people, guys, you must now stop being 00:23:36.759 --> 00:23:39.000 part of GEMS, you must stop being part of Discovery 00:23:39.000 --> 00:23:41.839 or whatever other fund you belong to, and you're 00:23:41.839 --> 00:23:44.440 now going to belong to the NHI. But by the way, 00:23:44.460 --> 00:23:47.680 this does not apply to soldiers, policemen and 00:23:47.680 --> 00:23:50.680 spies. I don't think the public sector unions 00:23:50.680 --> 00:23:55.220 will take kindly to this. They are, the COSATU 00:23:55.220 --> 00:23:58.259 public sector unions, COSATU aligned, are very 00:23:58.259 --> 00:24:01.359 much in support of NHI. I'm not sure they will 00:24:01.359 --> 00:24:03.619 stay in support if they see this kind of discrimination 00:24:03.619 --> 00:24:08.299 and, you know, how it can affect them. and they 00:24:08.299 --> 00:24:11.380 may have to pay more taxes. So this inside and 00:24:11.380 --> 00:24:13.880 outside the divide could also still play a role. 00:24:14.079 --> 00:24:16.460 So you've got these four things. You've got lawfare, 00:24:16.720 --> 00:24:20.059 you've got politics, you've got money, and you've 00:24:20.059 --> 00:24:23.019 got trade union pressure. And that may result 00:24:23.019 --> 00:24:27.299 in a change in the NHI approach. And talking 00:24:27.299 --> 00:24:29.640 about trade unions, there are new developments 00:24:29.640 --> 00:24:33.160 on the ground, which also may... change things 00:24:33.160 --> 00:24:36.420 over the next years? Yes, not a hell of a lot, 00:24:36.440 --> 00:24:39.140 but there is, for example, in August, NUMSA, 00:24:39.299 --> 00:24:41.720 which is the most left -wing trade union in South 00:24:41.720 --> 00:24:44.400 Africa, they are left, of course, out there, 00:24:44.420 --> 00:24:47.339 and they are very much in favor of things like 00:24:47.339 --> 00:24:50.380 the NHI and so on. They negotiated an agreement 00:24:50.380 --> 00:24:53.519 in the Motor Industries Bargaining Council. It 00:24:53.519 --> 00:24:56.740 was the first in that industry for lower -paid 00:24:56.740 --> 00:24:59.220 garage workers to belong to a medical aid fund. 00:25:00.170 --> 00:25:01.710 Now, you're talking about people who don't earn 00:25:01.710 --> 00:25:04.609 a lot, people who are semi -skilled, low -level 00:25:04.609 --> 00:25:07.970 skills, and they have now been given the benefit 00:25:07.970 --> 00:25:12.230 of a medical aid with certain benefits. I think 00:25:12.230 --> 00:25:15.369 we will see more and more of that kind of agreement 00:25:15.369 --> 00:25:17.990 being made, and that creates a reality on the 00:25:17.990 --> 00:25:20.869 ground that you cannot ignore. It's another group 00:25:20.869 --> 00:25:23.410 of people that you will have to say to, sorry, 00:25:23.470 --> 00:25:25.470 guys, you must now stop belonging to your fund. 00:25:25.569 --> 00:25:28.960 We're going to transfer the money to NHI. The 00:25:28.960 --> 00:25:32.460 unions are also not going to just wait for NHI 00:25:32.460 --> 00:25:35.880 to happen. In the presentation to Parliament, 00:25:36.220 --> 00:25:40.119 the department said 15 years. Absolutely. That 00:25:40.119 --> 00:25:42.660 is a new idea. It is a new idea. If you look 00:25:42.660 --> 00:25:45.619 at the timelines in the Act, signed and approved, 00:25:46.059 --> 00:25:49.480 the timelines are much, much shorter. So there 00:25:49.480 --> 00:25:51.680 has been what I would call a swerve to realism. 00:25:53.819 --> 00:25:55.859 In terms of the timelines, it should have kicked 00:25:55.859 --> 00:26:00.420 in now in the 25, 26 financial year. Well, it 00:26:00.420 --> 00:26:02.420 hasn't kicked in. We know that from the budget. 00:26:02.960 --> 00:26:04.880 And we know the minister has said he's not going 00:26:04.880 --> 00:26:07.819 to cancel tax credits. So although it was supposed 00:26:07.819 --> 00:26:11.740 to be year one, it's not. So there has been a 00:26:11.740 --> 00:26:14.900 swerve away from the rigid timelines in the act, 00:26:14.980 --> 00:26:17.740 and I would say unrealistic timelines, to a much 00:26:17.740 --> 00:26:21.240 more realistic approach. The thing that we can 00:26:21.240 --> 00:26:24.599 take from that, Ruda, is that NHI is not going 00:26:24.599 --> 00:26:27.000 to be a big bang. We're not going to start on 00:26:27.000 --> 00:26:30.019 the 1st of January of a particular year and now 00:26:30.019 --> 00:26:32.099 there's NHI and everything changes. It's not 00:26:32.099 --> 00:26:34.460 going to be like that. It will be an incremental 00:26:34.460 --> 00:26:37.880 process over time. And in the case of the department's 00:26:37.880 --> 00:26:41.799 schedule, over 15 years. Now the point is, a 00:26:41.799 --> 00:26:44.359 lot of water in 15 years is going to flow under 00:26:44.359 --> 00:26:48.519 the NHI breach. I mean, for one, in 15 years 00:26:48.519 --> 00:26:51.480 you can have enough economic growth. to generate 00:26:51.480 --> 00:26:55.180 the wealth to enable the country to afford better 00:26:55.180 --> 00:26:58.039 universal health care. That's one. Secondly, 00:26:58.099 --> 00:27:00.940 over 15 years, you can find many new and other 00:27:00.940 --> 00:27:03.539 ideas developing, as we have already seen from 00:27:03.539 --> 00:27:06.339 the alternatives proposed, that can improve the 00:27:06.339 --> 00:27:10.059 current NHI dispensation, or proposals rather. 00:27:10.970 --> 00:27:15.210 It is a bit ironic that between 1994 and 2007, 00:27:15.670 --> 00:27:19.529 we had incremental reforms towards, call it universal 00:27:19.529 --> 00:27:22.650 health care, that was scuppered by the NHI. Now 00:27:22.650 --> 00:27:25.450 the NHI itself wants to use the incremental approach 00:27:25.450 --> 00:27:28.970 over 15 years. It's something like karma. in 00:27:28.970 --> 00:27:32.690 that. In 15 years, of course, the political landscape 00:27:32.690 --> 00:27:36.230 may also shift. I am quite sure it will. I'm 00:27:36.230 --> 00:27:39.470 quite sure it will. And it'll create a reality 00:27:39.470 --> 00:27:42.890 that the current NHR planners will have to deal 00:27:42.890 --> 00:27:47.500 with. So what? There's a lot of information in 00:27:47.500 --> 00:27:50.940 this half hour. Yes, I'm afraid it is longer 00:27:50.940 --> 00:27:53.000 than usual and we apologize for that, but it's 00:27:53.000 --> 00:27:56.000 a complex topic and it may pay you to actually 00:27:56.000 --> 00:27:59.059 read the document itself. But back to the old 00:27:59.059 --> 00:28:01.619 thing of so what, what are the so what's? Well, 00:28:01.700 --> 00:28:03.500 the first thing, the health care in South Africa 00:28:03.500 --> 00:28:06.609 is unsustainable and it has to change. I think 00:28:06.609 --> 00:28:08.630 there's nobody serious that really disagrees 00:28:08.630 --> 00:28:11.809 with that kind of approach. We had huge deregulation 00:28:11.809 --> 00:28:15.289 in the late 1980s and the beginning of the 1990s 00:28:15.289 --> 00:28:18.089 with the medical professions. And it is creating 00:28:18.089 --> 00:28:21.230 all kinds of results that is not working neither 00:28:21.230 --> 00:28:23.869 for private patients nor for public patients. 00:28:25.009 --> 00:28:27.710 The second so what is that the NHI in its current 00:28:27.710 --> 00:28:31.700 form is fiscally and institutionally. unimplementable. 00:28:31.900 --> 00:28:34.940 And that was Aslam Dasu of the Progressive Health 00:28:34.940 --> 00:28:37.799 Forum's eloquent summary, and one can't really 00:28:37.799 --> 00:28:41.480 improve on that. It is not fiscally and administratively 00:28:41.480 --> 00:28:45.759 or institutionally implementable. Thirdly, from 00:28:45.759 --> 00:28:48.059 all evidence, and this is really the nub of the 00:28:48.059 --> 00:28:52.180 story, a hybrid system in which NHI exists alongside 00:28:52.180 --> 00:28:55.299 private funds is the better route to wider and 00:28:55.299 --> 00:28:58.079 better healthcare. That idea of not having a 00:28:58.079 --> 00:29:01.099 monopoly, but having a hybrid and this competition 00:29:01.099 --> 00:29:06.619 between funds and suppliers is a key issue. Regulation 00:29:06.619 --> 00:29:11.299 of the private sector health sector to curb excessive 00:29:11.299 --> 00:29:14.900 costs is an essential part of reform. As I've 00:29:14.900 --> 00:29:19.680 said, the business for South Africa has calculated 00:29:19.680 --> 00:29:21.900 that if we implement the recommendations of the 00:29:21.900 --> 00:29:25.000 health market inquiry, it can lower private costs 00:29:25.000 --> 00:29:29.420 by as much as 20%. So it is something that must 00:29:29.420 --> 00:29:32.460 be part of a reform program. And I think lastly, 00:29:32.619 --> 00:29:35.500 both the Department of Health and the other side, 00:29:35.700 --> 00:29:39.279 the people who say no NHI at all costs, no, nothing, 00:29:39.380 --> 00:29:41.900 never, I think both of them must climb down a 00:29:41.900 --> 00:29:45.170 bit. and come to the middle and develop, must 00:29:45.170 --> 00:29:48.589 take a step back and come to the middle and develop 00:29:48.589 --> 00:29:50.950 a different route to the ultimate aim, which 00:29:50.950 --> 00:29:53.329 is better healthcare for all. Thank you very 00:29:53.329 --> 00:29:56.450 much. Thank you for all the work that went into 00:29:56.450 --> 00:29:59.029 this because there is so much information out 00:29:59.029 --> 00:30:03.710 there and to get it into a structured form is 00:30:03.710 --> 00:30:07.599 an achievement. Thank you very much. Thank you 00:30:07.599 --> 00:30:10.140 for listening to the So What Podcast. If you 00:30:10.140 --> 00:30:12.980 enjoy this content, please don't forget to leave 00:30:12.980 --> 00:30:15.940 a review and a rating, and please consider subscribing 00:30:15.940 --> 00:30:19.160 so you don't miss any future episodes. Also, 00:30:19.279 --> 00:30:22.299 tell your friends. Remember, you can find a written 00:30:22.299 --> 00:30:26.200 version of all JP's content at jplandman .co 00:30:26.200 --> 00:30:26.880 .za.