‘Unworkable and unconstitutional!’ NHI Bill will damage economy, business groups say

The ultramodern private-run Mediclinic Midstream Hospital. Business groups say the NHI will lead to disinvestment in the healthcare sector. Picture: Thobile Mathonsi/IndependentNewspapers

The ultramodern private-run Mediclinic Midstream Hospital. Business groups say the NHI will lead to disinvestment in the healthcare sector. Picture: Thobile Mathonsi/IndependentNewspapers

Published May 14, 2024


South Africa’s soon to be signed National Health Insurance (NHI) Bill was “unworkable”, “unconstitutional” and it would cause severe damage to the country’s healthcare system and economy, so say business leaders.

President Cyril Ramaphosa is expected to sign the NHI Bill into law on Wednesday.

Although a universal healthcare system could help address inequality in South Africa, the NHI Bill in its current form is unworkable, unaffordable and unconstitutional, said Business Unity South Africa (BUSA) chief executive Cas Coovadia.

“What is especially troubling is that the president is proceeding with the bill despite extensive constructive inputs made by a wide range of stakeholders, including doctors and healthcare professionals, civil society, public sector unions, academics and business.

“The unfortunate consequence is that this version will hamper, rather than promote, access to quality healthcare for all citizens in our country,” Coovadia added.

Everest Wealth CEO Thys van Zyl described the signing of the bill as a desperate attempt to boost support ahead of the upcoming elections on May 29.

"One of the constitutional issues is about the right to choose health care and the influence that the possible removal of medical funds will have on this.

“Questions were also repeatedly asked about the cost and financing of the NHI. Corruption and maladministration are also major causes for concern," Van Zyl said.

Damage to the economy

Business groups widely believe that the NHI will lead to disinvestment in the healthcare sector and damage the country’s already fragile economy, Reuters reports.

Everest Wealth concurs that the system will damage local and international investor sentiment as well as business confidence in general.

"Taxpayers already pay to fund the public health care system but also have to pay for private health care because the public system is inadequate.

“Those with medical funds therefore also relieve pressure on the public health care system. But when a national health insurance scheme is introduced, it will not only limit people's choices but also do away with competition,” Van Zyl added.

ALSO READ: Can South Africans expect an increase in taxes to fund the NHI?

Taxes will have to be increased to finance the system at a time when tax revenues were decreasing, he warned, which will ultimately affect the poorest of the poor.

“The government wants to come in and take over something that was built by the private sector because they failed to do it themselves," the CEO said.

State Capture 2.0

Political party ActionSA said that although the NHI was well-intentioned in terms of addressing health inequality, in its current form it would be opening the health system to corruption of the kind seen during the Covid-19 pandemic, when millions were lost through PPE and related corruption.

“The state has consistently proven unable to manage money or complex systems, as we have seen at Eskom, Transnet and SASSA, and the creation of another healthcare behemoth will therefore do little to address healthcare but instead open up the industry to state capture and abuse,” ActionSA said.

The party believes the state should instead focus its attention on improving the performance of existing government-run healthcare institutions.

Court challenges

As government pushes through with the NHI Bill, it will inevitably face legal challenges on many fronts.

BUSA said it would consider its options following the signing of the Bill on Wednesday, with a view to ensuring NHI is implemented in a way that has the entire country’s best interests at heart.

Professor Alex van den Heever of the Wits School of Governance said that numerous legal challenges would likely decimate the NHI Bill in its current form.

“The bill has not been amended despite multiple submissions that emphasised several flaws. And so, it is likely to face strong legal challenges if it is signed,” Van den Heever told Newzroom Afrika.