Special Reports:

National Health Insurance

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The National Health Insurance (NHI), for which membership will be compulsory, is a funding scheme that aims to address healthcare inequity in South Africa. The scheme will do this by creating a fund that the government will use to buy healthcare services at set fees from accredited public and private health providers. The NHI Bill was passed in the National Assembly in June 2023. It has to go to the National Council of Provinces for approval.

HomeArticlesThese doctors want to work in SA’s rural hospitals. But there’s no...

These doctors want to work in SA’s rural hospitals. But there’s no money to hire them

  • Health department statistics show only 3% of medical graduates in South Africa end up working in rural areas 10-20 years after graduating.
  • The Umthombo Youth Development Foundation recruits students from rural areas to study health sciences and then return to their communities to practise medicine and other health professions.
  • But provincial health departments don’t have enough money to employ the graduates.
  • For Bhekisisa’s television programme, Health Beat, Mia Malan asked the head of the NHI, Nicholas Crisp, if — and how — the scheme will help to get health workers to rural areas.

South Africa has eight doctors for every 10 000 people in the country, 2019 World Health Organisation data shows. Although this figure is higher than in most other African countries, it’s much lower than in other middle-income regions. In Latin America and the Caribbean, for instance, there are about 30 doctors per 10 000 people (when high-income countries in the region are excluded).

Public hospitals in rural areas are particularly badly hit. A 2017 study showed that in most districts in Limpopo, there’s hardly one doctor for every 10 000 patients. An analysis of the health department found less than 3% of medical graduates in South Africa end up working in rural areas 10–20 years after graduating. 

The Umthombo Youth Development Foundation addresses this by helping learners from rural areas to become health workers who are then expected to work at the hospitals in (or near) the towns or villages they grew up in after graduating, for the same number of years that the foundation supported them.

Umthombo has produced 500 such health workers since 1999. 

But they now face a problem: provincial health departments don’t have enough money to employ all the graduates. 

Mia Malan asked Nicholas Crisp, the health department’s deputy director for South Africa’s National Health Insurance (NHI), if the NHI would solve the budgetary problems — or not?

Mia Malan (MM): We don’t have enough rural health workers. The Umthombo Youth Development Foundation addresses this by training and mentoring rural health workers, but now provincial health departments don’t have the money to employ all of them. How did we end up in this mess?  

Nicholas Crisp (NC): Government spends out of the fiscus. In other words, of the tax monies that we pay, around 15% of government expenditure goes toward the health sector. It’s appropriated in parliament, and the bulk of the health budget, around 85%, goes into the provincial equitable shares and is allocated by the provincial legislatures to health. Provinces must make do with that budget to run their services. The cost of employment (COE) is included in those budgets and provinces are not allowed to exceed the cost-of-employment ceiling. Because the budgets are being decreased every year — in health it’s about a 1.1% per annum decrease — and the unit cost of employing a person is going up, because salaries, allowances and overtime go up, it means that there are fewer posts that can be filled to employ people into that space. 

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MM: If budgets are decreasing every year and we have fewer and fewer positions for health workers, how are we ever going to improve the health system?

NC: This brings us to the NHI. Up until now the country generally, and even we in government, looked at the health system as the public health system. The public health system has only 49% of the expenditure on health in the country; 51% is spent in the private sector. Private health sector money is spent on somewhere between 15% and 20% of the population. So because the money is there, the resources are there. 

Medical schemes’ premiums [generally] go up 8.5–10% per annum, so there’s more money getting into the private sector, while there’s less money going into the public sector. So, we are only seeing about 8.6-million lives covered out of a total of 60-million people [with private sector resources]. 

With the NHI, the intention is that we pool the resources. I’m not saying it will happen overnight; it won’t. But over time, we will create a central pool where the two halves — in other words, 8.5% of our gross domestic product (GDP) [the combined public and private health sector proportion of GDP spent on health] — becomes available for buying services for everybody. 

The purchaser [of health services], the NHI Fund, will buy from all health providers [both public and private sector], not just the public sector or the private sector. So a person who lives next door to a private hospital but doesn’t have a medical scheme, will be able to get their services purchased under the NHI from that facility or that provider. Over time, the Fund will build up knowledge of where services are not provided, and make plans through strategic purchasing models, to make sure that we buy services for those people.

MM: You’re saying that the NHI will help because it’ll have more funds than what provincial health departments currently have, as you’ll pull in the private sector money that the government doesn’t have access to right now. Will you then be able to provide doctors to underserved areas?

NC: At the moment, the public sector spends [about] R5 500 per person per annum. [That is] around R265-billion a year [for 80% of the population]. The private sector spends about R277-billion a year [for 20% of the population]. Now, if we had the full [estimated] R550-billion for 60-million people, we have just over R9 100 per capita to look after healthcare. That would almost double the amount of resources available for people in the public sector and it would reduce, dramatically, the amount per capita for those in the private sector. 

The size of the difference is five to one — we’re currently spending five times as much on a person in the private sector as in the public sector, and they’re not necessarily getting better healthcare. We’re all trained in the same space. [Private sector patients might get healthcare] quicker and in a better environment, with less struggle to travel, but they’re not necessarily getting better healthcare. They might be getting more healthcare. 

What happens under an NHI is that funds, over time, become available to purchase services elsewhere. 

In a rural setting, you may have people living in a small community in [the] rural Eastern Cape, where there’s no general practitioner. No healthcare worker is going to open a practice there because there aren’t enough people with money to pay for services to make it viable. Over time, the government is the only solution to put medical officers in such areas. Under the NHI, if the fund is buying a service for a population, general practitioners are guaranteed an income. 

MM: That sounds great in theory, but we often see provincial health departments not using their full budgets, because they don’t have the administrative capacity to do so. What systems will the NHI have that provincial health departments don’t have? 

NC: Instead of the money being given directly to a provincial government, it will come to the Fund and the Fund will purchase services. The incentive is now on the management and the staff at that hospital, if they want to keep their jobs, to deliver a service and produce the outcomes that are worth paying for. Otherwise, the NHI is not going to pay for the services and they won’t get the revenue. 

That is what we call a purchaser–provider split. 

It removes the responsibility of the provincial administrations, and specifically the provincial departments of health, to be the provider of the services. They will behave more like a private company does, where the managers will not get paid unless they deliver the service. [Provincial health departments] are still going to have to buy the medicines, employ the staff and do whatever else is required to deliver a service, but they’re not going to be guaranteed the money for their budget; they’re going to have to earn the money and be paid for the services that they provide.

[WATCH] Health Beat #4 | Can National Health Insurance fix SA’s rural doctor dilemma?

MM: South Africans would be concerned about corruption when there’s such a large pool of money. How are you going to safeguard against corruption in such a large fund?

NC: Every government department is required to have a risk management plan. We are identifying where the risks are. They are perverse incentives and there are opportunities for people to collude. We know when we talk to our colleagues in the private sector, they also have big problems with managing fraud and corruption. So it’s a societal issue. It’s not purely a government issue.  

For the NHI, it’s important to design out the incentive to steal. There are ways to do that, by simplifying the system and making it very transparent, so that the public can see everything that’s going on, and can see where transactions are taking place, who’s getting accredited and how they’re getting accredited. That way, it will be far more difficult to defraud the system. 

If we see a pattern, as we know is the case at the moment in the private sector (where certain practitioners will [for example] be doing large numbers of tonsillectomies that are not necessary), there’s no mechanism in the private sector to do anything about it now. Under the NHI we will definitely do something about it. We will investigate why those people are behaving in the way they are, [meaning that they are] not sticking to standard treatment guidelines or [are] deviating from what we expect. 

We then need to do something about it; there needs to be consequences. Those are all provided for in the Bill. There are ways to deregister accredited providers who behave badly. There are ways to remove people from various committees if they don’t act in the correct manner. There are ways in which we will deal with quality and defrauding within a hospital system by just not paying them if they can’t prove that they’ve done the work they say they’ve done.

Mia Malan is the founder and editor-in-chief of Bhekisisa. She has worked in newsrooms in Johannesburg, Nairobi and Washington, DC, winning more than 30 awards for her radio, print and television work.

Mohale Moloi worked at Bhekisisa as a television producer and health journalist from July 2021 to March 2024.

Linda Pretorius is Bhekisisa’s content editor. She has a PhD in biosystems from the University of Pretoria has been working as a science writer, editor and proofreader in the book industry and for academic journals over the past 15 years. At Bhekisisa she helps authors to shape and develop their stories to pack a punch.