The Minister of Health, Zweli Mkhize, has released the 60-page NHI Bill. This will now be debated in the National Assembly. This latest Bill is said to contain more specific information regarding aspects of NHI such as funding, how doctors will be reimbursed and the role that medical schemes and the private sector will play.
The source of funding for NHI will be a combination of general tax revenue, reallocating the current medical tax credits, payroll tax from the employer and employee, and a surcharge on personal income tax.
Considering the fact that cash-strapped South Africans are already contributing a significant amount of their income toward taxes, the loss of medical tax credits and the increase in personal income tax is likely to prove an unpopular move.
These two proposed sources of funding for NHI will surely be a prominent topic of debate when the NHI Bill is presented in the National Assembly.
Payment of healthcare service providers
Healthcare providers will need to ensure they are properly accredited in order to be reimbursed by the NHI fund.
An interesting development is the way by which specialists and hospitals will be reimbursed. The Bill states that all payments must be all-inclusive (no co-payments or shortfalls) and based on the performance of the healthcare service provider, health establishment or supplier of health goods.
The intention is to ensure that there is quality in the outcome; however, how the performance of the providers is to be measured and the level at which they are deemed of acceptable quality is yet to be determined.
The role of medical schemes
The NHI Bill contains a single brief paragraph regarding the role of medical schemes once NHI is implemented.
It states that medical schemes may only offer complimentary cover to services not reimbursable by the NHI fund.
The current medical scheme system is very complicated, and this will be an interesting point of debate when the Bill is discussed in the National Assembly.
The current medical scheme system is too complex to be moved aside and defined in such simple terms. In fact, the system is governed by its own organisation, the Council for Medical Schemes, because of the complexity associated with running medical schemes.
In countries around the world that have a universal healthcare system, there are still private medical schemes providing a similar benefit to South African Medical Schemes and there is no reason why they shouldn’t continue under NHI.
It is very likely that a large portion of the current membership will no longer be able to afford medical scheme contributions as they will be required to pay taxes toward the funding of NHI.
The current community rating system – which makes contributions the same for everyone regardless of their risk and age – will clearly need to be re-evaluated. Medical schemes may not be sustainable if they cannot risk rate their contributions.
What’s next for NHI rollout?
The implementation of NHI is based on two phases, according to the latest National Health Insurance Bill. Phase 1 commenced in 2017 and is expected to end in 2022, and phase 2 will run from 2022 to 2026.
Both these phases focus on the development of infrastructure, training and development and establishing the fund.
Perhaps the most significant part of this process is the extent to which current legislation needs to be amended. There are 11 acts that need to be changed and subsections within these acts.
It is our contention that the timeline for implementation is very ambitious. We believe that this process is likely to take longer than 10 years to be fully operational.