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NHI fund to be established this year

Second phase approaching.

The National Health Insurance (NHI) fund is to be established this year, according to finance minister Pravin Gordhan. 

The fund will initially focus on improving access to a common set of maternal health, ante-natal and family planning services; expanding integrated school health programmes, including spectacle and hearing aid provision; and improving services for people with disabilities, mentally ill patients and the elderly.

“The service package financed by the NHI Fund will be progressively expanded,” Gordhan said. “In setting up the fund, we will look at various funding options, including possible adjustments to the tax credit on medical scheme contributions. Further details will be provided in the adjustments budget in October this year, and in the course of the legislative process.”

According to the NHI White Paper published in December 2015 by the Department of Health, the fund will be capable of buying personal health services from accredited and contracted public and private providers at primary health care level and public hospitals. The fund is to be governed by the NHI Commission, which will include civil society representatives.

In due course, the NHI Commission as well as a management team and a stakeholder representative forum will be appointed.

Phase II

Government is now moving toward the next phase of implementing the NHI.

We are still in the first, preparatory phase which, according to Gordhan, involves “strengthening of the service delivery platform and the overall improvement of quality in the public health sector,” and extends from the 2012/2013 to the 2016/2017 financial years.

Phase II will extend from 2017/18 to 2019/21 and is to include the mobilisation of additional resources, a review of state subsidies to medical schemes (into GEMS, Polmed, Parmed and other private medical schemes to which the state makes contributions) which will be reallocated into the NHI, the establishment of the NHI Fund and governance structures as well as amendments to the Medical Scheme’s Act.

Phase three will extend from 2021/22 to 2024/25.

One-hundred-and-sixty submissions were received from the public on the NHI White Paper. As such, Gordhan said “National Treasury and the Department of Health are working together to revise and finalise the NHI White Paper and the longer-term financing arrangements. There will be consultations with stakeholders over the period ahead on reform of the medical scheme environment, including consolidation of public sector funds.”

Eleven pilot projects had “yielded valuable insights” on which government would build, including designing contracts with general practitioners, more effective dispensing of chronic medicine, strengthening district health services through clinical specialist teams, ward-based outreach teams and school health services, and supportive information systems.

In his 2016 speech, Gordhan said R4.5 billion had been budgeted over the medium term for “revitalising health facilities in the eleven NHI pilot districts, and related health system reforms”.

Industry comment on NHI

NHI has come under heavy criticism and been met with scepticism.

The Institute of Race Relations in an article entitled, NHI: Risking lives for no good reason, stated that the NHI would put an end to private healthcare. “The medical schemes that currently sustain private practice will mostly not survive once they are confined to providing cover ‘complementary’ to that supplied by the NHI. In addition, state controls will be so extensive that practitioners will have little autonomy in running their own practices.”

Commenting on SA’s questionable long-term fiscal sustainability, Arthur Kamp of Sanlam Investments said: “There is no room for a downturn in growth (indeed the budget relies on a sustained economic upswing) and there is no room for spending on NHI (although the minister indicated a review of medical tax credits to possibly help with funding down the line).

The Council for Medical Schemes however, is of the opinion that private healthcare will co-exist with the public sector, although it may be in a different format to how it is currently structured, according to general manager of stakeholder relations, Elsabe Conradie.


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I would like to add my cynicism to the pot. Not just NHI, but the “planned” National Pension Scheme. And the idea of wasting billions on nuclear energy just makes it even worse.

I fully appreciate that minister Gordhan has his back against the wall, however, growth is said to be the critical thing in the SA economy including by Gordhan himself. Well then make the budget pro-growth. I cannot see how this budget can be seen to be pro-growth, if anything it will slow growth. I appreciate the income disparities and that a budget should be redistributive and so on, but growth is the only way out and this is acknowledged by the minister himself. We need to address inefficiencies, bloated cabinet and the hard decisions that are being kicked down the road at some stage. Maybe now is not the time, but the time must come sooner or later as increasing tax cannot carry on indefinitely.

Sorry, read several articles and added this comment to the wrong one.

Why is government getting into the healthcare business? Surely the job of government is to set the rules, not play the match.

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