Professor Nicholas Crisp, Deputy Director General, National Health Insurance, discusses the country’s efforts to implement a National Health Insurance (NHI) system
South Africa is a country steeped in a history of complexity, from the harsh realities of apartheid to the present-day struggle for justice and equality. It has been a very unjust society to grow up in and that is reflected in our health system. And while race remains a visible marker of inequality, the real driver today is socio-economic. A tiny fraction of the population enjoys the benefits of any quality care, while the rest are left with little more than the bare minimum of variable quality.
The current fragmented healthcare system consists of a large private sector catering to a small portion of the population and the public sector struggling to meet the needs of the majority. The NHI aims to establish a single-payer system for more than 62m people that would provide universal healthcare coverage, funded through taxes. This new system involves long-term, complex reforms including integrating public and private providers, improving digital infrastructure, and addressing medical legal issues.
Addressing the challenges
South Africa’s constitution embraces a concept of consultation and dialogue in policy formulation, ensuring that decisions are made with the input of various stakeholders. This process has often resulted in delays and inefficiencies, particularly in healthcare. The constitution’s emphasis on rights and consultation, rather than immediate action, has created a situation where well-meaning policies take years, if not decades, to fully implement.
The health system has become a microcosm of the larger societal issues we face. South Africa’s Gini coefficient, a measure of income inequality, is the highest in the world at around 63-65. Some 40 per cent of the population is unemployed while a small elite controls both wealth and income. Those who can afford private health insurance enjoy access to any services—doctors, hospitals, diagnostic equipment—while the majority of South Africans are left to rely on a public system that is chronically underfunded and underresourced.
Around 9m people are covered by some form of voluntary health insurance. The private sector largely services this 15 per cent of the population and has the lion’s share of healthcare professionals and resources. More than 90 per cent of dentists, 95 per cent of optometrists and audiologists, and 67 per cent of medical specialists work in this sector. A recent evaluation by the Office of Health Standards Compliance found that the outcomes and quality of care in the private sector were not markedly better than in the public sector. In many cases, the private sector suffers from the perverse incentives of over-servicing and profit-driven care. While the public sector is constantly under pressure, struggling to provide care to an overwhelming number of patients, it still manages to deliver quality healthcare, often with fewer resources and under more difficult conditions.
The majority of the population is served by young new graduates and those diehards and academics who have remained faithful to the public service. The number of patients they look after grows ever greater until they eventually can’t cope anymore and find themselves burning out and either leaving the country or being squeezed out into the private sector.
This stark contrast between the two fragmented and complex systems— the over-resourced private sector and the underfunded public system—has created huge inefficiencies. I believe that simplifying the system will ensure everybody has the right of access to exactly the same quality of healthcare and that we pay for it in a manner that is efficient.
The National Health Insurance (NHI) Act is a piece of legislation that seeks to establish a single-payer healthcare system which has been 20 years in the making, with five years spent in parliament debating its content. But while the NHI Act offers a hopeful vision for the future, the reality is that achieving true equity will not be an easy or quick process.
Restructuring the funding
South Africa cannot continue to sustain parallel healthcare systems that deliberately allocate health based on the ability to pay. The private sector spends at least five time per capita of what the public sector spends because it is hospi-centric, curative and very heavily specialist. To move towards universal coverage, we must shift the focus of this spending from curative health services to more comprehensive, coordinated care preventive services. Rather than continuing to rely on the more than 80 administrative systems and varying payment mechanisms, we need publicly funded healthcare and to consolidate and streamline the system, ensuring that every citizen has access to the same level of care regardless of their financial status.
But achieving this requires a complete overhaul, starting with better management of the resources that are already in place. The government must focus on using existing funding more efficiently – investing in primary healthcare services, integrating multidisciplinary care, and expanding the use of digital systems to improve patient tracking, reduce duplication of tests, and enhance overall efficiency.
One of the key components of the NHI is the creation of a central fund that will be responsible for paying healthcare providers. This fund will be financed through taxes, including those already paying for the health system, which will then be used to purchase services from healthcare providers, ensuring that all South Africans have access to the same level of care. This means that funding will no longer be dependent on the ability to pay, and the focus will shift from profitdriven care to patient-centred, equitable service delivery.
To support this transition, we are implementing digital health systems that allow for seamless access to patient records across the entire healthcare system. A single patient identifier will make it easier for healthcare providers to access patient histories, reducing the need for duplicate investigations and ensuring that treatment plans are based on accurate, up-to date information. Such systems will also allow for more efficient resource allocation, reducing waste and improving care outcomes.
However, these reforms will take time to implement. The first three years of the NHI’s implementation will focus on strengthening governance structures, developing the necessary policies, and building the digital infrastructure to support the system. While some of these reforms will lead to long-term efficiencies, the immediate reality is that some additional funding will be required to establish this corporate capacity.
The Act provides for several ways to generate revenue for the NHI fund. These avenues include redirecting subsidies currently given to beneficiaries of private healthcare insurers and looking at alternative revenue models, such as payroll taxes or levies. But these options will require careful consideration and planning, and it is unlikely that they will not provide an immediate solution to the deepening crisis. The immediate need is to simplify the system and use the efficiency gains to fund the gaps.
The NHI offers a path towards reform, but we must remain realistic about the challenges ahead – it will take time, patience, and a collective commitment. The future of South African healthcare lies in our hands, and if we take the right steps now, we can build a system that is truly reflective of the values of justice, equity, and care for all.
HealthBeats is hosted by Steve Gardner, Healthcare World Managing Director, for Abu Dhabi Global Health Week
CONTACT INFORMATION