Thinking on a future funding system: NHI Stellenbosch Business School Skip to main content
It’s important to note that the National Health Insurance (NHI) is a funding system. Not a delivery system.

The NHI is most probably one of the most misunderstood term in health care In South Africa. Its real meaning is sometimes augmented and most frequently diminished to represent something that it should not be or will not be.  The concept seems to be a good political tool and is sold to the voter as the solution to our health care problems.

It is not a strategy or a health structure. Far from that. The NHI is actually only a funding system where money for health care is centrally managed – not the process or quality of care.

Universal health care means that people have universal access to health care. Ideally, the quality of such health care should be good enough to improve the health status of the community and of the individual when needed. A good universal health care model will therefore define the areas of health concern for communities and individuals. It will plan for and service those needs through good planning of high quality services that include health system reviews, adequate staffing and leadership and effective management, understandable care processes, accessible efficient facilities, health data acquisition and proper budgeting and budget control.

But people, not governments, pay for healthcare. Present South African healthcare is funded by individuals (for themselves) and by the taxpayer (read: mainly the same individuals that fund their private health insurance) for the public sector.  The funding per individual in the two sectors (private and public) is therefore highly unequal, mainly due to the small taxpaying base that South Africa has.  If quantified, a private sector health care medical scheme member will pay for his/her and his/her family’s private health insurance according to what they can afford in benefits. These taxpayers will, collectively also pay about 60% of the care in the public sector through taxes.

The NHI is one way to fund universal health coverage.  It uses (mainly) tax money to fund health care for all and the taxpayer is therefore mainly responsible for footing the bill. It also, in the SA guise, may reduce the ability of the individual to continue to pay for e.g. no- NHI benefits in a medical scheme. This may be unappetizing for certain taxpayers and voters.

The quality of care in the two sectors (public and private) are also (with some very infrequent exceptions) very different. Where it costs more, the service is normally better but not yet optimal for the money spent.  Although more expensive than the private sector, the care in the private sector is mostly, but not always, comparable to services in some first world countries. In these countries the per capita expenditure in real money on health (not percentages of Gross Domestic Product as is frequently used) is 6 (UK) to 9 to 10 times (USA) what it is in the South Africa Private sector.

Market inefficiencies, market enquiries and other reports have shown this.  These cracks are not very large or unsurmountable to rectify, in the private sector.  Even if the fault-lines are fully fixed and amount to ZAR10 – 15Bn savings, this will not be enough, if efficiently funneled in some way or another to prop up a failing public sector. There is much less money per capita in the public sector. Management of money can improve patient benefit. Compared to the private sector, the quality of care in the public sector is frequently low and is fraught with solvable problems: bad access or when accessed, frequently suboptimal care, overcrowding and more than occasionally, a non-caring attitude from health professionals that are closest to the patient. There are reports of drug outages, non-availability of existing theatre and other treating facilities due to lack of qualified staff to man open workspaces and other problems that may elevate this to a potential perfect storm that will threaten health care on the ground.

When we fund, we must know what we are paying for and how much we need to deliver those services.

The NHI as funding system can only work if there are predefined health care benefits covered under this system. These must be carefully defined and quantified. This calls for gap analysis on facility and personnel needs and concerted efforts to improve these.  It calls for a list of carefully planned, NHI funded health care benefits that will be universally available.

This will lead to a clear idea of the quantum of funds needed and how funds will be spent if procured.  It will also afford South Africa well-grounded motivation to secure funds and to speed up funding for a good health system overseas.  Investors in countries’ well-being want to know what they are funding.

So where to with the possibilities of NHI? How can it work?

A pragmatic approach to implementation of a funding system such as NHI is needed. It is not adequate to say that it is a political decision and that if we implement it, we will start to plan the nuts and bolts of who and what will be funded.  The NHI will not solve the other problems that make health care in South Africa a very challenging space.  It will not solve for infrastructure, scarce leadership and management, the attitudes of health professionals, how it will service ill people and look after the health of those that are healthy.

Deeper, pragmatic modelling of care systems on the ground, concerted implementation of such good planning, infrastructure, care system logistics, supply of consumables to meet demand and prevent outages, staffing and good leadership and management skills (including financial planning and management skills) are needed. We need to use the time that we have available, very efficiently.

Can universal health coverage funded by and NII mechanism improve health for South Africans? Yes – if we do the right things right! If the above is quantified and properly implemented well-rounded planned universal health coverage, funded by adequate amounts of money with services delivered by good facilities with motivated staff, may be possible.



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