NHI: A Constitutional Imperative for Universal Healthcare

By Faiez Jacobs

This article responds to Dr. Karl Le Roux, DA Deputy Spokesperson on Health, whose recent criticism of the National Health Insurance (NHI) Act appeared in Business Day on 9 December 2024. The DA, which once had “50 reasons” and then “5 reasons” why the NHI would fail, has toned down its public opposition, as reported in Daily Maverick.

Among these critics, the DA has been particularly vocal, claiming that the government is engaging in “magical thinking” about funding the NHI. However, such views often reflect a lack of historical understanding of universal healthcare implementations globally and a failure to appreciate the moral imperative of equitable healthcare.

However, beneath the surface, their arguments remain fundamentally opposed to the transformative vision of universal healthcare as outlined in South Africa’s Constitution.

The DA simply do not care for people . The DA’s insistence on maintaining the status quo, where quality healthcare is a privilege for the wealthy, is morally indefensible. Universal healthcare is a hallmark of a progressive and just society. South Africa must prioritize this moral responsibility, as have countries like the UK, Canada, Thailand, South Korea, and Taiwan, which have all successfully implemented universal healthcare systems.

Through this article will not only counter their claims factually and morally but also expose the real reason for their resistance: private sector profits.

The Constitutional Mandate for Universal Access to Healthcare

Section 27 of South Africa’s Constitution is unequivocal: "Everyone has the right to have access to healthcare services, including reproductive healthcare." This is not a negotiable goal—it is a legal and moral obligation. Yet, 30 years into democracy, access to quality healthcare remains profoundly unequal.

While 16% of the population (about 9.6 million people) benefits from private healthcare, consuming over 50% of total healthcare expenditure, the remaining 84% rely on an underfunded and overburdened public system. This disparity perpetuates structural inequality, denying the majority of South Africans the dignity of quality healthcare. The NHI aims to redress this imbalance by ensuring that no one is excluded from healthcare based on their income or socio-economic status.

The NHI seeks to fulfil the promise of the Constitution by ensuring that access to healthcare is based on need, not income. It aims to dismantle the apartheid-era dual system that perpetuates inequality. This is not just about healthcare; it’s about justice, redress, healing dignity, and equity.

Exposing the True Motive: Private Sector Profits

It is essential to confront the reality that much of the opposition to the NHI is driven by financial interests. The private healthcare sector in South Africa has been one of the most profitable industries over the past two decades. Consider the following:

Private Hospital Groups:

Netcare reported profits of R4 billion in 2023, up from R2.9 billion in 2020.
Mediclinic earned annual profits of over R3 billion, driven by high patient fees.
Life Healthcare saw R2.5 billion in profits, despite the economic downturn.

Medical Aid Schemes:

Discovery Health's medical scheme administration fees have ballooned, earning the company R3 billion annually.
Bonitas and Momentum Health also generate significant profits from member contributions, while limiting coverage.

Profit Margins:

Over the past 20 years, private healthcare profits have grown exponentially, often outpacing inflation and GDP growth. These profits come at the expense of affordability and accessibility for ordinary South Africans.

The private sector’s lucrative financial model is built on exclusivity and high costs. It is no surprise that this sector—and the DA, which often aligns with its interests—opposes a system like the NHI, which aims to redistribute resources and ensure universal access.

Countering the DA’s Arguments

Claim: The NHI Is Fiscally Unsustainable

The DA’s claim that the NHI will bankrupt the country is based on misrepresentations and exaggerations. Momentum claims the NHI will cost R1.3 trillion, but this figure assumes a Rolls-Royce system that mirrors private healthcare for all. A closer look at international examples shows that universal healthcare systems are not only affordable but also improve overall health outcomes:

Thailand: Universal coverage costs just 2.7% of GDP, while improving life expectancy and reducing poverty.
South Korea: Its phased approach to universal health, starting with industrial workers, proved fiscally sustainable and was later expanded. Its costs during its expansion phase were approximately 4.5% of GDP.
Canada: Despite initial cost concerns, its system now delivers excellent healthcare at 10% of GDP, lower than South Africa’s combined public-private expenditure.

For South Africa, based on a GDP of R7 trillion, this translates to:

R189 billion (Thailand’s model) to R315 billion (South Korea’s model) annually.

Even with a blended per capita cost of R8,625 (weighted average of public and private expenditures), the estimated cost for NHI is R750 billion – R890 billion, far below the alarmist R1.3 trillion figure.

For South Africa, the NHI’s estimated cost of R750 billion to R890 billion annually can be funded through progressive payroll taxes, reallocation of existing resources, and efficiency gains from bulk procurement.

Private Sector Integration:Integrating private healthcare infrastructure into the NHI system reduces capital costs for new facilities. While private hospitals will require compensation, economies of scale and centralized procurement can save 10%-15% annually, equivalent to R67 billion – R139 billion.

Administrative Costs:Global studies show that single-payer systems often reduce administrative overheads, costing just 3%-8% of total healthcare expenditure. For NHI, this equates to R33 billion – R46 billion, manageable within the existing fiscal framework. This is significantly lower than the current fragmented system.

How to Fund the NHI: Potential and Possibilities

Critics fail to acknowledge that universal healthcare systems worldwide rely on innovative funding mechanisms that South Africa can adopt:

Progressive Taxation: A modest payroll tax of 2%-3%, coupled with employer contributions, can generate significant revenue. For example, Taiwan funds its NHI through a premium equal to 5.17% of wages, ensuring sustainability.
Reallocation of Existing Resources: The current healthcare budget of R259 billion can be supplemented by redirecting wasteful expenditures and tackling corruption, which costs the public sector billions annually.
Dual Contribution Model: A phased approach allows voluntary private insurance to coexist, enabling citizens to top up their coverage while ensuring universal baseline care.

Claim: The Public Healthcare System Is Too Weak

The DA points to the challenges in public hospitals as evidence that the NHI will fail. This argument ignores the fact that the NHI is designed to address these very issues:

Centralised funding and oversight will improve accountability.
Pooling resources will reduce disparities between urban and rural healthcare facilities.
Bulk procurement of medicines and equipment will lower costs, benefiting both public and private sectors.

Critics conveniently ignore that many public hospitals, despite challenges, continue to save lives every day. My own 95-year-old grandmother, Amina Khan, was recently treated at a public hospital for a severe infection. For the 5 day she was hospitalised she received compassionate and effective care, despite the hospital's resource constraints. Her story is a reminder that the public healthcare system is not broken—it is burdened. We all at some stage in our life would need accessible affordable health care. The NHI will help lift this burden.

Lessons from Global Successes

Countries that have implemented universal healthcare systems faced similar scepticism. Yet, their experiences prove that these systems can be transformative:

The UK: Despite initial cost concerns, the NHS became a global benchmark for universal healthcare.
Taiwan: After nearly a decade of planning, its single-payer system improved health outcomes while keeping costs low.
South Korea: Its dual insurance model balances public and private contributions, offering a potential blueprint for South Africa.

If we compared ourselves to USA especially during COVID we did very well. We want a health care system that serves all the people not profits for a few. South Africa must learn from both good and bad examples. Let’s have a phased, iterative approach to implementation. Start with high-need districts, refine the system based on real-world experience, and expand coverage progressively.

A Call to Courage

The ANC government must show the courage to move forward with the NHI. There will always be naysayers, but we cannot let fear of the unknown stall progress. The NHI represents an opportunity to build a healthier, more equitable society.

Minister of Health Dr. Motsoaledi and his team must conduct and publish detailed cost estimates, as these will help counter misinformation and build public trust. While the Department of Health’s costing efforts need refinement, international precedents demonstrate that universal healthcare is feasible with incremental implementation.

More importantly, they must begin implementation without delay. START NOW. Target high-need districts first to manage costs and build capacity.

Let us confront these challenges , head on—like poor management, lack of accountability, and underfunding. They are precisely why the NHI is necessary. By centralizing funding and oversight, the NHI can:

Improve accountability through standardized service delivery.
Ensure equitable resource allocation across provinces and facilities.
Address staff shortages with better recruitment and training incentives.

As Maya Angelou said, "Do the best you can until you know better. Then, when you know better, do better." The NHI will not be perfect from day one, but with iterative learning and refinement, it can achieve its goals.

Conclusion: A Healthcare System for All

The NHI is not just a policy—it is a promise to every South African that their health and dignity matter. The DA’s opposition, rooted in the protection of private sector profits, is both factually flawed and morally indefensible. The ANC must seize this moment to fulfil the constitutional mandate of universal healthcare. It is time to start, to learn, and to build a system that serves all, not just the privileged few. Let us not be held hostage by a few and lets move beyond narrow political agendas and embrace the transformative potential of the NHI. South Africa deserves a healthcare system that reflects the values of equity, dignity, and justice. With collective will and evidence-based planning, we can make the NHI a reality—accessible, sustainable, and fair for all.

Let us remember my grandmother, Amina Khan, and the millions like her who rely on the public healthcare system. They deserve better. South Africa deserves better. Together, we can make the NHI a reality.

* Faiez Jacobs, former Member of Parliament and advocate for equity and justice.

** The views expressed do not necessarily reflect the views of IOL or Independent Media.