Proposed NHI

The Health Minister Aaron Motsoaledi released two bills on Thursday that could lead to big changes to the South African healthcare system. Both are likely to lead to heated debates in industry and civil society, and could directly affect our investments in Discovery and Mediclinic.

We should note that the ANC leadership is under huge pressure to implement the NHI, as they have been mandated to do this by every ANC policy conference over the last two decades. Most sane observers agree that the current state health system is a mess, and there is no money to pay for expanded services, so all this may just be political posturing ahead of the 2019 elections.

The first piece, the National Health Insurance Bill seeks to establish a single fund that will contract with accredited public and private sector providers to pay for healthcare services for its beneficiaries. It's not clear who is in and who is out, on either end. It is hard to see how this could all be compulsory, without breaching parts of the Constitution.

In its initial rollout, it is also not clear how the NHI Fund will be funded. To start with, it will probably snaffle the current medical aid tax deductions, so those who are lucky enough to belong to a medical aid fund should expect their future income tax bill to be a bit larger. The Minister earmarked 2026 as an implementation date. I would not be surprised to see that pushed out, again.

Of course, commentators have already warned that the governance structure envisaged for the NHI Fund is vulnerable to corruption. Who is going to be in charge? Brian Molefe?

Motsoaledi seems to be obsessed (in a bad way) with the reality that doctors charge differently for their services. He seems to think that he should regulate tariffs, so that there is one price for every procedure. That makes no sense to me? Some specialists are in high demand because they are better at their jobs, or use more sophisticated tools?

The second proposal, the Medical Schemes Amendment Bill, apparently contains lots of waffle about improving scheme governance, expanding mandatory benefits and regulating broker fees more closely. Discovery is the market leader in this sector, and is probably already in full compliance.

In our view, the state should get its act together and make sure that its taxpayer-funded facilities provide effective, basic care to all citizens. There is nothing wrong with well-off people setting aside their own money to pay for high-quality private healthcare services provided by world-class practitioners. Leave them alone!