Who Owns Whom


Information on the healthcare sector is plentiful and summarised in the latest WOW report on the healthcare sector in South Africa.

Besides the issue of the relatively large number of qualified doctors whom the Department of Health (DoH) cannot absorb in the system despite the shortage of doctors due to budget constraints, the key topic dominating media reports and public discourse is the National Health Insurance (NHI). Why is it so controversial? 

National Health Insurance

Government’s fixation on NHI needs some debunking. A few high-level numbers offer some insights and highlight the percentage of health budgets versus spent per person in South Africa.

The private medical aid spends rounded R30,000 per member per annum for about 9 million people; the public sector spends only R5,500 per person for 51 million people. The discrepancy between the two has to do with the quality of healthcare being provided through a multitude of channels, private doctors, specialists, healthcare professionals, private clinics and hospitals who all have some cost base. So how is the government going to deliver quality healthcare to all 60 million people? Even if it can somehow reduce the cost from say R30,000 as it currently stands in the private sector to say R23,500, it would have to spend an extra R18,000 on 51 million people currently part of the public sector healthcare delivery. It would mean an additional spending of more than 900bn on healthcare.

The South African Government already runs a very high budget deficit of 4.9% of GPD, adding to the already high levels of debt at over 70% of GDP. Increasing taxation on individuals even if the NHI is implemented in stages would become excessive. The sentiment conveyed in the press is also that medical doctors and healthcare specialists are not enamoured with the NHI with some seriously thinking of greener pastures on more welcoming countries which would cripple NHI’s capacity to deliver when South Africa already has a shortage of doctors and nurses.

South African healthcare spending compared to other countries

Comparing South African health spending with other countries lays bare inconsistencies and the utter ineffectiveness of public sector healthcare management.

South Africa spends about the same percentage of its GDP on health as central European EU member states, yet the service delivered is unmistakenly different. Many countries in a similar spending range as South Africa provide better and more universal healthcare. The US is an outlier, spending much more than any other country as confirmed in the OECD table below. The OECD study about “Understanding differences in health expenditure between the United States and OECD countries of September 2022” did not provide a clear answer as to why, especially given that the quality of care does not differ from other develop countries listed.

Not so evident from the statistics is that the UK, which has a national healthcare system that would closely resemble South Africa’s proposed NHI, does not have a good record of service delivery according to the British Journal of Nursing. The Journal further states that they have seen several Never Events in NHS England (2023) where wrong procedures took place, or the wrong patient was treated

Source: OECD

Locally, WOW highlights maladministration, poor maintenance and corruption on a grand scale, including lack of protection for whistleblowers, in the public health sector as the main cause of poor service delivery.

Is the NHI the best model for South Africa?

While the NHI aims to provide healthcare coverage that addresses disparities, the implementation of such a system requires a concerted effort to address existing challenges such as maladministration and inefficiencies to utilise the high spending in a manner commensurate with service delivery, ahead of extending public sector management to the entire healthcare industry in South Africa.

A blended solution, as found in many developed countries, combining innovation and efficiencies of the private sector with broader public sector funded model might be beneficial to address the inequalities in the South African economy.

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