National Health Insurance Funding (NHI)

Written on 01/04/2022
Nexia SAB&T

Nicholas Crisp, deputy director-general for the NHI, recently briefed Parliament on the NHI Bill following extensive public hearings. He tabled that government proposed to levy surcharges on personal income tax, payroll tax, and reallocating funding for medical scheme tax credits. These are some of the "chief sources of income" for the government's proposed National Health Insurance (NHI).

He further advised "Private financing through medical schemes will be unnecessary. It is then that a payroll tax will be considered (as one alternative collection method) since it replaces our need to buy care through medical schemes."

Some further quotes from his presentation:

"The NHI fund will pay providers in a way that creates appropriate incentives for efficiency and for the provision of quality and accessible care. In consultation with the minister, the fund will determine its own pricing and reimbursement mechanisms using a uniform reimbursement strategy"

"South Africa is currently the 33rd largest economy in the world. The current spending is high compared with peers. The problem is inefficiency (including fraud, corruption and medico-legal claims) in both public and private sectors.”

The implementation of the NHI remains a very contentious issue. Government has shown itself to be inefficient in the management of resources and taxpayers will be reluctant to allocate further hard-earned cash to government to manage on their behalf.

Discovery Health’s CEO Dr Ryan Noach recently made presentations on the NHI to parliament including a workable, blended-funding model aimed at sustainably achieving Universal Health Coverage (UHC).

“A blended funding model will ensure:

1.  All South Africans receive the same minimum package of healthcare services, leveraging all available healthcare skills and assets in the country

2.  Sharing of the public healthcare sector’s load in terms of funding and provision of healthcare services

3.  Phased implementation that is affordable and sustainable with significantly lower transitional risks

4.  A multi-funder system that affords consumers a choice of funder and provider

5.  Funders and providers are incentivised to compete and innovate.”

We will keep you informed on developments in this regard.

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