R1.4 billion in budget for NHI: what does that mean?

While the president said laughingly in his State of the Nation speech that he is just looking for a pen to sign the National Health Insurance (NHI) Bill into law, the minister of finance in his budget speech set aside R1.4 billion for the scheme for the current financial year. What does this mean?

Hopefully, a pragmatic approach to NHI, Yugen Pillay, head of public sector at BDO South Africa, says.

“As the impending NHI Bill looms large on South Africa’s political horizon, it is critical that we take a pragmatic approach to its implementation. President Cyril Ramaphosa’s remarks in his Sona, followed by minister Enoch Godongwana 2024 Budget, coupled with the palpable urgency within government structures to use the bill for electioneering, indicate a swift progression towards its enactment.”

However, he warns, we must not overlook the daunting constraints that accompany such a monumental undertaking.

“The NHI undoubtedly represents more than just a healthcare reform bill. It is a symbolic assertion by the governing party of its commitment to address the nation’s healthcare disparities. But amid the fervour surrounding it, we cannot afford to ignore the elephant in the room: the budgetary constraints that threaten to stifle its realisation.”

ALSO READ: What happens if Ramaphosa finds a pen and signs the NHI Bill into law?

Can South Africa afford NHI?

Pillay says at the heart of the matter lies a simple yet important question: Can we afford NHI?

“Despite its noble intentions, the stark reality is that our current fiscal landscape is ill-equipped to shoulder the financial burden NHI entails. With a burgeoning budget deficit, less than desirable growth and dwindling tax revenue, the prospect of financing the NHI through conventional means appears increasingly untenable,” he says.

What does it mean then that Godongwana set aside R1.4 billion for the scheme during the next financial year?

Pillay says it reiterates government’s intention to begin rolling out NHI, but the question is to what extent? While some estimate NHI will cost about R200 billion in total, its true cost remains unknown. And then there is the matter of the state of our current healthcare services.

“Consider that almost 800 qualified doctors are currently without jobs in the country due to budget constraints. Even if we have the necessary facilities, we cannot even afford to place the doctors we currently have, let alone the many more we will require, not to mention the exodus of skilled medical practitioners, which presents a further obstacle. How can we hope to implement a comprehensive healthcare scheme when we lack the necessary workforce to sustain it?”

ALSO READ: Budget 2024: NHI receives R1.4 billion allocation

Can the current health system sustain NHI?

Healthcare is the heartbeat of the nation, Pillay says.

“There is no point to have a system that does not work, leading to a population that is continuously sick. That in turn affects productivity and the economy, creating a vicious cycle.”

Therefore, he says, to navigate these challenges instead, we must adopt a multifaceted strategy that prioritises economic growth and human capital development.

“Rather than rushing headlong into NHI implementation, we should focus on laying the groundwork for its success.

“This entails devising a comprehensive budgetary plan, at least a three-year phased implementation strategy and concerted efforts to retain our medical talent.”

In his budget speech Godongwana did identify several areas where the NHI still needed to be developed before its rollout. Pillay says this should provide some comfort as it indicates that government realises that in its current form they cannot afford to fully implement the scheme.

ALSO READ: ‘NHI Bill must pass constitutional muster’: Call on Ramaphosa not to sign it into law

Prepare for the inevitable rollout of NHI

But what are some of the ways the country can better prepare itself for the inevitable rollout of NHI?

Pillay says it is critical that we engage with healthcare professionals to understand their concerns and address the systemic issues driving their departure.

“By fostering an environment conducive to their growth and development together with the Health Professions Council of South Africa (HPCSA), we can stem the brain drain and fortify our healthcare infrastructure from within.”

In addition, he says, we cannot afford to overlook the invaluable expertise of our senior specialists. Their mentorship and guidance are indispensable in nurturing the next generation of healthcare professionals and optimising the utilisation of our existing resources.

Although the minister acknowledged that further developments are required before NHI can be rolled out at scale, the incoming seventh administration, even if it is a coalition government, may be more aggressive in implementing NHI in a show to radically transform the health sector, he warns.

“But for now, reason and logic prevail.”   

Ultimately, the success of the NHI hinges not only on its legislative passage but on the concerted efforts of all stakeholders to address the underlying constraints and seize the opportunity to redefine the future of healthcare in South Africa, Pillay says.

“It is compulsory for all of us to rise to the occasion and ensure that the promise of universal healthcare becomes a reality for all South Africans, without compromising the fiscal integrity of our nation.”

ALSO READ: ‘NHI hopelessly unworkable’: BLSA says health sector getting worse with no recovery in sight

Pivotal moment for SA’s healthcare landscape

Blessing Utete, managing executive of Old Mutual Corporate Consultants, points out that the allocation of R1.4 billion to the NHI as part of the department of health’s R848 billion budget for the 2024 medium-term, underscores a pivotal moment for South Africa’s healthcare landscape.

“Godongwana emphasised government’s unwavering commitment to the NHI policy but also highlighted the enormity of preparatory work required to pivot South Africa towards a more inclusive and equitable healthcare system.”