GOVERNMENT MUST POUR IN RESOURCES, TO UPLIFT THE HEALTH SYSTEM TO MEET THE DEMANDS FOR UNIVERSAL COVERAGE
NHI AND AUSTERITY IDEOLOGY CAN’T LIVE SIDE BY SIDE
BUT MAJOR WEAKNESSES IN THE ACT MUST BE URGENTLY ADDRESSED
The South African Federation of Trade Unions (SAFTU) cautiously welcomes the signing of the National Health Insurance (NHI) into law. SAFTU’s support for NHI is based on our insistence that the current status quo is not sustainable. The NHI seeks to achieve “the realization of the right of access to quality personal health care services” by establishing a fund to pool resources for this purpose.
SAFTU insists that NHI takes us forward to a totally decommodified healthcare system – i.e., not just the ‘single payer and single buyer’ as the current bill envisions but also a National Health Service which must address the current crisis and not make it even worse.
SAFTU has always lamented the two-tier, class-apartheid health system, in which the rich and economically affluent sections of our society get quality healthcare services in private hospitals whilst the overwhelming majority of the poor access inadequate healthcare services in public hospitals and clinics.
The state still subsidises the richest 14% of the population who get medical aid tax credits to the tune of up to R4 368 per annum, costing the fiscus R37 billion per year. That system has allowed the private healthcare financing component to use 51% of resources, amounting to R277 billion in 2023, with 49% (R265 billion) spread over the other 85% of society. This money should be redirected towards the NHI.
Integrating the two tiers into one super-efficient healthcare financing service is our priority, and the NHI brings us closer to this ideal. The sloth, unnecessary luxury (emblematised by Discovery’s R3 billion Sandton headquarters) and duplications associated with hundreds of medical aid schemes, can be ended. Much greater ‘economies of scale’ can be won when a single state agency negotiates with private sector suppliers, of not only healthcare services, but unreasonably expensive pharmaceutical products, medical equipment, and hospital and clinic facilities.
Most importantly, two improvements on access can be expected. First, pulling healthcare facilities together into a single financing network and listing the minimum health conditions that should be treated in these facilities for all users is a great step toward creating access to quality healthcare. It means, the poorest of the poor who could not access certain services in the public sector because of incapacity and poor resourcing, will now access these services from the network of healthcare facilities pulled together under NHI.
Secondly, it should also end the tyranny of medical aid schemes which has manifested through turning down needed treatment or rejecting claims by General Practitioners (GPs).
We also advocate for the introduction of a National Health Service in which all healthcare services are brought into the public sphere, as is the norm in Europe, won during the early- and mid-20th century. For us, the first progressive step to that end, is to bring all health-related financing into the NHI. Once the R540 billion in healthcare spending can be rationalised and healthcare financing rapidly becomes a genuinely fair, efficient system, then our struggle for fully-decommodified health services will be far easier.
SAFTU will collaborate with our working-class allies to ensure that the NHI addresses the current outcomes, the same way trade unionists worked tirelessly with the Treatment Action Campaign (TAC) in the early 2000s, to change public policy and to ensure effective roll-out of AIDS medicines. The result was a rise in life expectancy from 54 in 2004 to 66 just before Covid-19 hit.
SAFTU also insists that the current shortage of healthcare staff is addressed with immediate effect. Vacancies must urgently be filled, and more healthcare personnel must be trained and employed. The current situation where there are 40 000 vacancies in the public healthcare is totally unacceptable. Currently,
• Public sector doctors are in short supply. There are only 13 600 to service more than 85% of the population. The World Health Organization (WHO) recommends a doctor to population ratio of 1:1,000 yet in our country according to the Minister of Health, Dr Joe Phaahla, the country’s doctor to patient ratio is 1:3 198 – 0.31 doctors per 1 000 patients;
• There is a dire shortage of dentists in the public sector with only around 1,100 practicing throughout South Africa;
• Medical specialists are in the shortest supply, leading to a situation where in Limpopo the ratio is 1,5 per 100,000 people;
• Mpumalanga only has one psychologist for every 100,000 residents.
There are not enough hospitals. Consequently, the existing ones are overstretched, as demonstrated by insufficient wards and lack of equipment.
SAFTU demands insourcing of all frontline healthcare workers and all contract workers! The Community Health Workers (CHWs) and nurses should be employed in sufficient numbers to provide primary care of a good standard without being overstressed. They should be insourced (as Gauteng CHWs won after a long battle), recognised, accredited, and employed formally by the health system for fair conditions of service and remuneration. The CHWs and nurses have a critical and fundamental role in the functioning of the NHI and therefore their participation in the decision-making on NHI implementation is crucial. All security and cleaning workers must be insourced to form part of the integrated universal health care system.
But the poor state of the public sector is all the more reason the vast majority of South Africans need universal access to decommodified healthcare. This should not mean that poor healthcare drags the whole healthcare system into an inefficient system, or that both private and state corruption in healthcare should ever be tolerated. We anticipate the uplifting of all healthcare, once integrated – and insist on a Just Transition for many private healthcare financing workers in medical aids who also need to help populate the NHI machinery, albeit with a very different ethos, one of service and not of profiteering.
Fiscal austerity is the greatest threat to decommodified universal healthcare
Underpinning all these problems that characterise the public health sector currently is fiscal austerity.
Partly as a result of underspending, there has been a collapse of the public health system as well as a worsening crisis in the private health sector. Austerity was obviously on the agenda in late February 2020 when even in the face of the COVID-19 pandemic, Finance Minister Tito Mboweni cut health spending by R3.9 billion in February 2020. A few years earlier, his predecessor Pravin Gordhan cut national-to-provincial health spending by 13% in real terms. One devastating outcome of this fiscal austerity was the decision by Gauteng Health Department to outsource mental-health patients, which led to many deaths in a tragedy that came to be known as Life Esidimeni.
Spending cuts were hard-wired into Treasury’s logic in mid-2020, when Mboweni contracted an IMF loan which had fiscal austerity as one of the conditions. This was followed by World Bank loans from 2021-23 with the same conditions, even though Mboweni was replaced by Enoch Godongwana. The latter admitted his ‘grave mistake’ in allowing trillions of Rands to escape South Africa in his 2022 relaxation of exchange controls, thus limiting the scope for taxation of financial assets and hence also contributing to fiscal squeeze.
Through fiscal austerity, the government has underfunded public health, impacting infrastructure development, equipment and medicine, and the enrolment of healthcare workers of all professions. Even after the #FeesMustFall protests won allocation of more than R40 billion annually to higher education, Godongwana is rolling this back, leaving thousands of tertiary students underfunded.
Fiscal austerity, which has collapsed public healthcare and public services in general, is the greatest single threat to the NHI apart from corruption. Investing in NHI requires that the government increase financial allocation to the healthcare system to prevent the same fate that public healthcare has faced. Should the government carry on fiscal austerity, it will not be able to raise the necessary funds to fund the NHI, thus leading to the total collapse of the healthcare system. This will vindicate the doomsayers within the capitalist class whose resistance is based amongst others on the argument that NHI is unaffordable and will be looted dry by the hyenas. SAFTU is not dismissing these concerns; they are not invalid.
SAFTU rejects any suggestion that the marginalised majority must fund the NHI. We resist the increase of VAT in the streets. The introduction of the NHI provides an opportunity for the government to introduce the solidarity/wealth tax. In addition to that we demand that government review the corporate taxes that were 52.5% at their peak in 1992 but that have since been slashed to 27%. Government must ensure that the up to R400 billion rands that leaves our country through illicit financial outflows and transfer pricing is used to fund the NHI. Matters degenerated so far that even a grey listing by the Financial Action Task Force in February 2023 has not been sufficient to block illicit financial flows; tough exchange controls are needed. Government must implement Judge Dennis Davis’ tax commission recommendations so that when big business dodges their responsibility to the tax system by a minimum of R50 billion annually (as Davis found), government takes steps to stop the stealing of its procurement budget. According to the senior Treasury official, Kenneth Brown, the government was in 2016 losing between 35-40% of its procurement budget to private sector stealing.
Other concerns with the Act
SAFTU’s submission to the NCOP and President has been totally ignored. SAFTU insist that these concerns if not addressed will open the Act to litigation. We list two concerns out of a number of them contained in our submission:
- The National Health Insurance Act will potentially override labour legislation such as the Basic Conditions of Employment Act, the Labour Relations Act, the Employment Equity Act, the Skills Development Act, the Compensation for Occupational Injuries and Diseases Act, etc., and constitutionally mandated legislation. For example:
the Public Service Act,
the promotion of the Administrative Just Act
the Promotion of Equality and unfair Discrimination Act and
the Promotion of Access to Information Act.
The Act states that if there is a conflict between the NHI Bill (as an Act) and the other labour legislation, since section 3 of the NHI Bill states:
When read in the context of section 3 of the Bill, this definition means that the Minister or the Fund can issue a directive that overrides all other legislation except the Constitution and the Public Finance Management Act. This includes labour legislation. Additionally, the Minister will also be able to make regulations and issue rules or notices under the NHI Act that override other legislation. We believe this may possibly be unconstitutional since it interferes with the functions of both Parliament and the National Executive.
- The provisions of the NHI Bill will affect employment contracts that specify the subsidization of medical scheme membership by the employer as an employment benefit. At this stage there are indications that several employers may be all too happy to allow the NHI to replace this benefit entirely. Employee remuneration packages are a complex issue that required more detail regarding the manner the NHI will be funded. As such, we demand clarity on this issue.
If a payroll tax is implemented as stated in section 49(2)(iii) of the Bill, this may impact workers take – home pay because there may be a strong temptation for employers to effectively shift the cost of the tax to employees especially in a weakened economy. The current Bill does not contain any further details on how NHI will be financed. The introduction of the requisite Money Bill by the Minister of Finance may shed more light on the matter, yet we demand this be concomitant with the NHI Bill so that clarity is provided.
SAFTU and its allies are demanding the immediate engagement with these concerns as well as the expansion of spending for the public health system so that NHI can be implemented without hurdles, without delay. The state of the clinics and district hospitals is dire. These hospitals need to be rebuilt and capacitated with both healthcare workers and equipment/medicine.
A statement issued on behalf of SAFTU by the General Secretary, Zwelinzima Vavi.
