South Africa: The debate on National Health Insurance

Issue No. 231/232 (Nov/Dec 2009)

In July this year, the ruling African National Congress (ANC) party in South Africa unveiled its proposal for a National Health Insurance scheme pledged in its 2009 elections manifesto.  Leonard Gentle surveys the debate on the proposal and considers the claim that it represents a break from the free-market, neoliberal model of economic development hitherto pursued by the ANC government.

IN its 2009 elections manifesto the African National Congress (ANC) government in South Africa promised to set up a National Health Insurance (NHI) scheme. In July an ANC task force reported on its proposal to the National Executive Committee (NEC). Since then the NHI has been debated in the media and taken up as a cause by the Congress of South African Trade Unions (COSATU) and some NGOs.

But what is the NHI?

The National Health Insurance is a system whereby the state will tax people who are employed to generate a pot of money. This money can then be accessed by anyone - whether employed or unemployed - to pay for medical care, which can either be from private doctors and private hospitals or public clinics and hospitals.

The NHI is not a National Health Service - the system of public health practised by some countries in Europe which set up welfare states with free healthcare after World War 2.  Rather, it can be thought of as a complement to the medical aid schemes whereby people make contributions to a fund which they can draw upon to get private or public medical care.

The government says that it is putting into practice a promise made in 1996 and which was part of the ANC decisions at Polokwane and the 2009 elections manifesto. It says that this scheme will give everyone access to healthcare and address the inequalities in the health system.  

The current state of healthcare in South Africa

About 15% of South Africans are in medical aid schemes which account for 46% of healthcare spending, mainly on private hospitals. Eighty-five per cent of South Africans use the public sector which only gets 41% of health resources. Ninety per cent of doctors and chemists are in the private sector. Since the adoption of the Growth, Employment and Redistribution (GEAR) economic policy framework in 1996, the state actually spent less per person on healthcare and only slightly increased this after 2005.

The working class and the poor have simply been abandoned. Babies die of infections in public hospitals in the Eastern Cape, anti-retrovirals are stopped in the Free State because budgets have been cut for public healthcare. In the Western Cape beds were cut at Groote Schuur at the same time as money was suddenly found for the World Cup football stadium in 2007.

Unionised workers have themselves swelled the rush to join medical aid schemes and use private healthcare because public clinics and hospitals are under-resourced or over-crowded. This is however not an option open to the majority of the working class.

At the same time South African private medical companies - such as Medi-Clinic, Fedhealth and Netcare - have become transnational corporations (TNCs) dominating in Africa, and even expanding into the private healthcare business in Britain. All of these TNCs boast of their BEE (Black Economic Empowerment) credentials and political connections in the ruling party.                               

Responses of the ruling class to the NHI

While the early responses from parties such as the opposition Democratic Alliance, and some journalists, have been to attack the NHI, accusing it of damaging the private sector, important sections of big business have given the NHI their blessing.

The Board of Healthcare Funders (BHF), which represents 95% of medical schemes in Southern Africa, has welcomed the NHI. Clarence Mini, chairman of the board's regulatory and policy committee, said: 'We think we will be able to play a very meaningful role.' Mini also said the NHI could provide additional business opportunities for medical schemes to extend their reach beyond the current 7.5 million members to the pool of the estimated 49 million people living in South Africa.

At the same time, in his welcome speech on the NHI, Malcolm Kahn, chairman of Fedhealth, said: 'The process needs to be phased in over several years with key issues the substantial upgrading of public sector hospitals, the training of more doctors, nurses and ... staff, and exploring new avenues of funding.'

In response to this kind of question, the ANC NEC sub-committee chair on the NHI, Zweli Mkhize, said: '.it has been generally accepted that the revitalisation of all hospitals, improvement of the remuneration packages of the healthcare workers and transformation and capacity building of management is a prerequisite for the NHI. This means that there is need for tremendous investment into the public health services. Hence the President announced that this revitalisation of public health institutions requires a public-private partnership.'

The ANC has itself moved to reassure big business that the NHI will mean opportunities for business. In its online service, ANC Today, it stated: 'One of the main concerns that have been raised by various commentators on the NHI is the future role of the private sector. We have stated clearly in past engagements and various forums that the policy of government and the ANC is that the private sector is an important role-player in the delivery of healthcare.

'NHI will be simply a financing system, with government collecting and allocating money for healthcare. Healthcare is provided by private and public sectors but paid for publicly by NHI.'

Responses to the NHI from below

Across the country activists fighting the service-delivery struggles have so far had other battles on their hands and have not taken up this matter. But activists in COSATU and the South African Communist Party (SACP) have taken up the NHI as something to go to battle over, whilst activists in initiatives such as the People's Health Movement (PHM) are offering critical support.

After its 10th Congress in September, COSATU announced: 'We are appalled by the state of healthcare in South Africa. Private healthcare continues to take the lion's share of health resources while serving fewer than 20% of the population...At the other end is a poorly resourced and over-burdened public healthcare system, which caters for the poor. It is against this background that we will work hard to ensure the creation of a National Health Insurance Scheme.'

The SACP's Blade Nzimande went further: 'The SACP, together with progressive health unions, health NGOs, and other mass formations, will in the coming weeks be embarking on a massive mobilisation and education campaign in support of the NHI and in the process exposing the hypocrisy and greediness of private capitalist health providers wherever they are, both inside and outside our own movement and government.'  

Questions for activists

One key question which activists may want to debate is: who are the beneficiaries of the current health system? The private monopolies like Netcare, Medi-Clinic, the medical aid schemes and the pharmaceutical companies. The system has made them rich beyond their wildest dreams. They look at the NHI as another vehicle to enrich themselves further. Why do any of the current proposals around the NHI not address the issue of limiting their power?

Secondly, the concept of a pot of money - possibly billions of rand - to be administered is the very thing that opens private financiers' eyes to the opportunities to speculate on capital markets globally. This is why Syfrets, Investec, Old Mutual, Alan Gray and dozens of other fund managers have grabbed the opportunity to manage pension funds so that they can speculate. The Treasury even joined the rush by setting up the Public Investment Corporation (PIC), using public sector workers' pensions, to buy shares all over the Johannesburg Stock Exchange and other stock markets. This is the very type of financialisation that got the capitalist world into the global mess it is in today. 

If the NHI is a pot of money to be used to access private or public services, why should anyone then not choose the private hospitals and thereby make them richer? Some of the critical supporters of the NHI then argue that it will mean that the state will have to invest billions in the public health system. This whilst the state is already saying that the current economic crisis is causing a massive loss of tax revenue? In this regard the government is already taking a position - any investment will be on the basis of a public-private partnership - code for further privatisation and commercialisation of public health services! Why then not simply campaign for more public money for decent public services?  

Underlying all the optimism about the NHI seems to be an assumption about the government of President Jacob Zuma - that it really marks a move away from GEAR and neoliberalism. Activists will have to debate whether this optimism is based on their actual experience over the last few months.                

Leonard Gentle is Director of the International Labour Research and Information Group (ILRIG) in South Africa. This article is reproduced from Workers World News (No. 55, October 2009), which is published by ILRIG.

*Third World Resurgence No. 231/232, November-December 2009, pp 10-11