Phasing in of NHI could be key to its success

The National Health Insurance (NHI) initiative is expected to take 14 years to phase in and will cost about R500-million for the pilot stage alone. But it is still not clear in medium-term budget policy statement who will foot the bill.

The government has prioritised the initiative that will kick off in 10 pilot districts. These will test the feasibility and scale of proposals outlined in the NHI green paper, which focuses on primary healthcare, health promotion and preventative care.

Finance Minister Pravin Gordhan said there were several options to acquire the necessary funding without imposing a huge burden on ordinary South Africans. One was increased taxes, but he said the NHI project would be run in a fiscally sustainable way.

“We all agree it’s a noble goal,” said Carmen Christian, an economics lecturer at the University of the Western Cape, “but the question remains: Is it a feasible solution given the economic climate, the fiscal implications and the lack of research?”

Initial estimates expected the initiative to cost R255-billion by 2025 on completion of the rollout but Christian said it was difficult to look at costing at this stage as there is a lack of detail in the green paper.

Ryan Lobban, a healthcare research analyst at Frost & Sullivan, said that he expected a conditional grant would be made during the pilot phase but obviously the monetary figure still had not been finalised. “The government has acknowledged that a 100% accurate estimation of the cost of NHI is not possible as it depends on the utilisation rates and size of the population as well as unit costs,” he said.

Shan Naidoo, the head of the department of community health at Wits, said the NHI was a human right and its development was therefore inevitable. “The NHI principles and objectives cannot be contested because it underpins respect for social justice.”

When the NHI policy document was approved this year, it produced an outcry over the heavy taxes that would be needed to fund it. But a slow, incremental approach could be the key to its success. Naidoo described phasing it in as its saving grace.

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn

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