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Can SA’s reality support the NHI dream? Here are the challenges

2019-08-28 17:01

South Africans can talk about the National Health Insurance and say from a political point of view that “we want this” and “we must do that”, but at some point the country needs to contend with its political and economic realities.

This was the view of Marius Oosthuizen, member of faculty at Gibs, who was speaking at the Gibs Health Industry Insights and Innovation 2019 Conference in Johannesburg on Wednesday.

Oosthuizen was responding to the health minister, who said during his address that, despite high levels of unemployment and inequality, the introduction of the National Health Insurance act was an imperative to help bridge that gap.

“The level of inequality poses a threat to the future economic and political stability in the country and its got to be addressed,” said Health Minister Zweli Mkhize.

Referring in particular to the inequality in the health sector, Mkhize was at pains to explain the vision for South Africa once NHI is implemented.

“What we want to see in a health system is that it will have the outcomes of giving you the best health indicators, which includes a longer lifespan, lower mortality rates, mothers who don’t die when giving birth and babies who are delivered without a problem – even those who come from poorer backgrounds – and the control of preventable diseases. On the other side we have non-communicable diseases, rising as a second kind of epidemic in the country,” he said.

Mkhize said that the ideal health system would be one that was able to control both sides of this and “invests in the wellness of the population”.

He added that the vision was to have the capacity to handle patients through well-trained staff, shorter queues, the security of supply of medication, easy access to facilities and the early prevention and screening of diseases.

“We all put in the resources, but then those who are the sickest would need it more than those who are healthier. The issue is one of social solidarity. The trick is to manage this fund, and that we must be able to procure health services on behalf of all the people,” he said.

With the full implementation set to take place by the end of 2026, the NHI has left more questions than answers, however.

The challenges

Oosthuizen outlined the economic implications for NHI.

“The reality is that NHI has to take place with real challenges in place,” he said.

“There is room for, as the minister called it, ‘conversation’, to get us to this long-term aspiration of NHI,” he said.

Some key takeouts included the introduction of e-healthcare, open innovation and technologies and body sensors or wearable devices.

“This creates a very interesting environment in the next five to 10 years where healthcare starts to become personal and digitised. It raises important questions for the state about how we think about these opportunities.”

Oosthuizen addressed the political, economic and social trends.

“The minister alluded to differences of ideological opinion, but really what we are seeing is three trends,” he said.

These include political fracture, where it has implications for the policy environment, the institutional reform such as the work that is being done by the National Prosecuting Authority and the Zondo Commission to root out corruption and maladministration and a rise in populist policies.

“On the economic side there is low growth, there is fiscal fragility. SA’s fiscal deficit is now above 4%. If we have very low tax revenue that fiscal deficit will then widen and this adds to South Africa’s debt burden, which puts us at risk of an economic downgrade in October.

“So we can talk about NHI and we can say from a political point of view that ‘we want this’ and ‘we must do that’, but at some point we have to contend with the political and economic realities that we face in the country,” Oosthuizen cautioned.

Speaking about the social trends, he said that the country has a young, socially-vulnerable population that is unequal.

“When we talk about bringing the NHI to South Africa in the short term, we are going to have to contend with the political, economical and social realities.

“At the moment SA is stuck in what we have termed from a futuristic perspective, a vicious cycle. The vicious cycle is where the social inequality and exclusion drives the political fracture which drives the slow growth and fragility from a fiscal point of view.”

He cautioned that this cycle could lead to downgrades.

Is there hope? Yes. Oosthuizen says it is not all doom and gloom.

“There are some flickers of light which will likely improve business confidence by 2020, and in turn drive business by 2021, which drives growth by 2022, and this begins to drive job growth by 2023 or 2024 over the next 10 years. We’ll see through job creation that upward mobility will be formed and this will bring social cohesion. In turn, this is when we will see the country being ‘fixed’. But this is a process and if we get everything right.”

The alternate trajectory across which South Africa could be headed should we not get everything right, is the radical agenda.

“That agenda which increases the populism will lower business confidence in October or November and will lead to a downgrade, which will lead to divestment and in our analysis, will lead to a currency crisis where the currency will weaken between 10% and 20%.”

Oosthuizen said that if this happened, NHI would be unlikely to happen.

“South Africa really has to choose which direction we go in, within the next three to six months. It’s dependent on whether or not President Cyril Ramaphosa can deliver on his agenda.”


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October 13 2019