NHI - what are your thoughts?

South Africans should be outraged and incensed that the government is seeking to nationalise medical care.

The proposals in the National Health Insurance (NHI) White Paper, if adopted, would prove to be an unmitigated disaster, not only for health care in SA, but also for the economy in general.

The proposed NHI would essentially nationalise health care and extend the long and clumsy arm of government into that most private and personal area of our lives. The consequences are predictable:

The proposals would reduce the quality of South African health-care provision.
Drive more healthcare professionals out of the country.
Create a bureaucracy incapable of handling the huge volume of claims.
Impose an unnecessary and intolerable burden on taxpayers.

While SA is still reeling from the shock and disbelief of being plunged into financial disarray resulting from having three finance ministers in the space of one week, the Minister of Health, Dr. Aaron Motsoaledi, has quietly released the long-awaited NHI White Paper.

The lack of detail regarding how, exactly, the system will be funded, what services will be provided, and where the additional medical staff required to effectively operate a system of free health care will come from are just some of the details that are conspicuously absent.

South Africans should be outraged and incensed that the government is effectively seeking to nationalise medical care – to be clear, the provisions in the White Paper will all but destroy the private healthcare market in SA despite what the politicians would have you believe.

Under NHI, in a tight economic climate such as we are currently experiencing, how would the government officials decide which services to provide and who should receive care?

SA would not be alone in struggling to answer these questions. Patients in high-income, advanced countries such as the UK and Canada are forced to endure extraordinarily long waiting periods before they can see a doctor, and then for referral to a specialist, and finally for the recommended specialist treatment.

This is because rationing is inevitable to cope with the huge demand that occurs when ‘free care’ is offered, even during good times. At no point in the nationalised process is there any apparent incentive for service providers to be as efficient, or as effective, as they would be if functioning in a private environment.

When individuals are forced to make payments into the centrally controlled NHI fund, what will happen to them when their disposable income has been all but wiped out and they can no longer afford to pay for someone else’s ‘free’ healthcare? When people take responsibility for their own medical and other needs they are in a much better position to reallocate resources in lean times.

The government does not have to provide ‘free health care to all’ – this is a disastrous use of scarce taxpayer resources. Additional spending in any one area of the economy necessarily comes at the expense of spending in another.
The government’s role should be to finance medical care for the poor and destitute, and to purchase an increasing percentage of those services from the private providers. To do this, it must allow and encourage the rapid growth of the private healthcare sector.

South Africans have voiced their concerns over the shenanigans with the ministers of finance – the same amount of attention ought to be directed at the proposed NHI.

Under the proposed system only the very rich will be able to access private medical care while others will find it more feasible to travel abroad to obtain the medical care they desire. It will be the poor and middle class that will be subjected to the vagaries of a dysfunctional government-controlled system.

If the government truly wants the best for the country’s people, it must understand its limitations and get out of the way.

Written by
Jason Urbach
Director of the Free Market Foundation

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