Over the past three decades, South Africa’s healthcare system has deteriorated exponentially due to poor management and fragmented financing – in spite of nearly 9% of the Gross Domestic Product (GDP) being spent on the sector. These and other issues have left the public sector unable to meet healthcare demands.
In response to these challenges, the government has signed into law the National Health Insurance (NHI) scheme with the aim of reducing costs through better price negotiations and efficiency measures.
UKZN academic Dr Hilary Muguto presented research on the scheme at the Graduate School of Business and Leadership seminar series asking the question: Healing or Hurting? The Precarious Promise of the South African National Health Insurance Scheme.
The paper, which Muguto co-authored with his PhD supervisors Professor Paul Muzindutsi and Professor Josue Mbonigaba, aims to address the concerns that have arisen regarding the NHI scheme’s financial feasibility despite its nobility.
Several systemic threats, including administrative inadequacy, resource constraints and structural defects are just some of the concerns that may erode the country’s financial sustainability. Further, Muguto’s research examined the alleged cost-revenue imbalances and revealed that the expected cost of implementing the scheme is significantly higher than the current healthcare spending.
‘The revenue needed to support the scheme would have to grow at an unlikely rate, given the current economic conditions and existing tax structures,’ said Muguto.
‘The scheme may be prohibitively expensive, with insufficient revenue to cover escalating costs. The government should consider gradual implementation of the scheme to align with available resources while prioritising critical primary care services to prevent overwhelming the system,’ he added.
Words: Lungile Ngubelanga
Photograph: Supplied