This could be the death of private healthcare in South Africa, warns government body

The National Planning Commission (NPC) has recommended that the medical scheme industry should be allowed to continue operating indefinitely, despite the planned introduction of the new National Health Insurance (NHI).

The NHI Bill is currently undergoing a public consultation process, with a number of healthcare, civil society and political groups presenting on why the new system should or should not be introduced. The commission was established in 2010 to develop a long-term vision and strategic plan for South Africa and falls under the Presidency.

Section 33 of the Bill states that once the NHI has been fully implemented, medical schemes may only offer complimentary cover to services not reimbursable by the NHI Fund.

However, the NPC has warned that this clause has significant implications for the South African economy, particularly the private healthcare sector.

In its submission to parliament this week, the commission noted that while it was broadly in favour of universal healthcare, the country would be better served by ‘harnessing’ private healthcare facilities rather than phasing them out solely in favour of the government-run NHI.

Limiting the role of the private sector risks potentially destroying both private and public sectors, simultaneously, it said.

Regulate rather than destroy

Rather than dismissing private health cover completely, the NPC said that medical schemes and related administration markets require regulatory interventions essential to make the industry more affordable.

It added that the following  should be considered:

  • Current medical scheme administration and payment systems are world-class and must be used to benefit the economy and the nation;
  • The tax contributions by the industry is significant;
  • The industry is a significant contributor towards employment and tax;
  • The private sector is currently better placed to drive future innovation which can be used to grow the South African economy by servicing other markets on the continent and globally.

“Although with the risk of perpetuating the two-tier system, the medical scheme industry should be allowed to continue operating indefinitely.

“Regulation of the industry (should be introduced) to improve efficiencies and manage costs for the benefit of users should continue as planned and be reviewed at regular intervals.”

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