Health Minister Dr Aaron Motsoaledi has argued that societal imbalances favoured the rich. Photo: Cindy Waxa/Independent Newspapers
The National Health Insurance (NHI) Act could not garner the full support of members of the National Council of Provinces (NCOP) yesterday, as it was largely criticised as not being the silver bullet to solving corruption, poor management, access to hospitals and the basics of the healthcare system.
This is as Health Minister Dr Aaron Motsoaledi argued that societal imbalances favoured the rich.
Motsoaledi recently said the private health sector was subsidised for up to R70 billion a year through government spending on medical schemes for its workforce, which shored up the sector.
Arguing for the phased implementation of the NHI Bill, which was signed into law in May, Motsoaledi yesterday told the NCOP hybrid debate that the R62.2bn budget tabled by his department would go into levelling the playing field in universal healthcare in the country.
Motsoaledi said no less than R100bn moved annually from the fiscus to subsidise the rich, money poor people were not entitled to.
“We will have to start implementing the NHI in phases, as we are already in Phase 2. The rest of the building blocks of health will easily fall into place,” he said.
Motsoaledi said the arguments against the NHI on the grounds of corruption, poor management, and maintenance of healthcare facilities could not be denied.
However, he said South Africa already spent 8.5% of its gross domestic product (GDP) on health, equal to European countries, against a 5% benchmark with little benefit for the wider population.
“South Africa far surpassed the 5% recommendation. We are already at 8.5%, which European countries are averaging. Our healthcare system looks like chalk and cheese,” he said.
“I will not deny the charges of corruption, poor management, and poor maintenance. The central question is the manner in which the 8.5% of the country’s GDP is divided as against other countries.”
Motsoaledi said 51% spent from the Department of Health’s funding benefited only 14% of the population employed in the civil service and other state institutions, with about R70bn a year spent on the private healthcare sector, which subsequently subsidised those with medical aid.
The minister said the public healthcare sector was “haemorrhaging” its skilled personnel to the private sector because of remuneration imbalances.
He said South Africa’s healthcare system had structural defects in financing Universal Health Coverage or the NHI against global standards set by the World Health Organization (WHO).
According to the National Health Department, about 90% or (R173.9bn) of the budget of R192.3bn over the medium-term expenditure framework (MTEF) period comprises transfers to provincial departments of health for conditional grants.
Total spending is projected to increase at an average annual rate of 4.3% from R58.6bn in 2023/24 to R66.4bn in 2026/27.
This is due to additional allocations of R1.2bn in 2024/25; R1.3bn in 2025/26; and R1.3bn in 2026/27; for conditional grants to support provinces to partly absorb the implications of the 2023 public sector wage agreement.
These additions also partially offset Cabinet-approved reductions of R1.5bn in 2024/25; R3bn in 2025/26; and R3.3bn in 2026/27.
Motsoaledi said the state’s 1.3 million public servants, plus all members of Parliament and the legislatures, and all the judges in the country were subsidised by the fiscus to the tune of R70bn per annum.
“This is done by subsidising them individually in the medical schemes they have joined. Any person in our country who is on a medical aid, regardless of who they work for receives tax rebates from Sars,” Motsoaledi said.
“I am made to understand that these tax rebates amount to approximately R30bn,” he added.
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