National Health Insurance
Profmed’s Graham Anderson to serve on National Health Insurance (NHI) task team
Graham Anderson
Graham Anderson, principal officer of Profmed, has been appointed to the Board of Healthcare Funders (BHF) task team that will address the proposed National Health Insurance (NHI) on behalf of the industry.
“The idea of the task team is to see how medical schemes and administrators can work with the Ministry of health and add expertise that will facilitate the smoother introduction of the NHI,” says Anderson. “I have some reservations about the cost in the current document, and am hoping that the white paper will provide more clarity on this.”
At the present time, the only document that has been formally submitted is an ANC document proposing the NHI. The industry is awaiting further information before commenting or advising. “As we understand, a white paper will go into greater detail on the proposal,” says Anderson. “It’s important to understand that the current document has been issued by the ANC and is not an official government document.”
The medical scheme and administration industry has an enormous amount of input to offer on the NHI in terms of the administrative capabilities they already have in place. On the other hand, Anderson has some concerns about government’s stated intention of administering the NHI in its entirety.
“Government doesn’t have a good track record of administrating such funds,” he says. “You have only to look at what’s happened with the Workmen’s Compensation Fund and the Road Accident Fund, which are badly administered and frequently on the brink of bankruptcy.”
In addition to concerns about the administrative capabilities of government, there are two other points contained in the NHI proposal document that Anderson finds troubling. The first is that it will treat every South African free of charge at any point of service – a system that he says hasn’t proven successful anywhere in the world. The second is that it relies on social solidarity with every citizen paying tax according to their ability.
“There are around 50 million people in South Africa, and around five million of those are paying 89% of the tax,” explains Anderson. “To fund the NHI, the tax burden for individuals will increase by 8% of their income. Self-employed people will be responsible for this in full, and those who are employed by companies will pay 4% out of their own pockets while their employers will cover the other 4%.”
The implications of this on the broader medical industry are also alarming. South Africans are already extremely highly taxed and the very people who will be providing the medical services will have to pay even higher taxes to fund the system. This could start a new wave of emigrations among those who have the vital medical skills that the country needs most. This additional tax burden will negatively affect the country’s growth expectancy by about 2% per year.
Anderson says that he supports the concept of a national health scheme that funds only indigent or low-income individuals that could be funded from the tax base without increasing the burden on the tax-paying minority. He says the entire industry is “waiting with bated breath for the white paper that will clarify a number of issues” on a matter that has implications for the entire nation.
“If the NHI is done correctly, it has the potential to benefit those South Africans who do not have access to decent affordable healthcare, but without due consideration, it could be crippling to the industry and the economy,” he says. “We are looking forward to giving input on the official white paper when it is released by government.”