Much has been said about the costs of the proposed national health insurance scheme for South Africa. In fact, the media, of late, has been replete with reports and stories about the costs that such a scheme or NHIS will cost both the country and the individual tax payer. The difficulty, however, remains, when one views the NHIS from a distance, of what it is that the architects of the NHIS propose that the average tax payer will be buying in exchange for his or her hard earned rand?

Cost versus benefit

There are two fundamental debates about NHIS and it doesn't really matter where you live and how much you earn if you are subject to a NHIS-type system, you, as the consumer, are concerned about, firstly, how much it costs you per month and, secondly, what you receive as benefits? We have had only half the debate in South Africa – in so far as one accepts that the debate that is occurring in the media is about the costs of NHIS. However, what about the other side of the debate concerning benefits? What is the NHIS to consist of from a benefits point of view that would compel me, as a consumer, to want to participate in such a scheme? These questions are fundamental to the successful existence of a lawful NHIS – not only because of commercial reasons but also because of reasons of legality.

The role of benefits in any scheme is underscored by remarks made by the Council for Medical Schemes in its Annual Report:

2011 to 2012 where the matter of prescribed minimum benefits is dealt with:

"The purpose of PMBs cannot be overstated: PMBS are there to ensure that members are protected against health events which could otherwise ruin them financially." (at page 26)

The role of the benefits in any scheme therefore, whether in a private medical scheme or a NHIS–type scheme, which is fundamentally a very large medical scheme, are important and remain central to the debate. Certainly, matters of economics, socio-economics and pharmacoeconomics are important when analysing Government's position as stated in the Green Paper published in the Government Gazette on 12 August 2011.

Matters of law

However, matters of economics are not the only issues with which we are concerned: matters of law remain equally important to establishing what will be a successful NHIS.

Part of a successful NHIS is the acceptance that the benefits provided by such a scheme are relevant, reasonable and rationale in a South African society that is based on constitutional principles of human dignity, equality and freedom. The High Court of South Africa has commented on such matters but within the context of the provision of HIV treatment in the decision of Treatment Action Campaign and Others vs the Minister of Health and Others 2002 (4) BC LR 356 (T) at page 386B to C:

"The availability of resources can only have an influence on the pace of the extension of the programme. But there must be a plan for a further roll out. Only if there is coherent plan will it be possible to obtain the further resources that are required for a nationwide programme, whether in the form of a reorganisation of priorities or by means of further budgetary allocations." One must, in fact, deal both with issues of cost and benefit in order for any NHIS to be implemented within the context of South African socio-economic conditions, its healthcare priorities and its constitutional directives.

So to borrow from the decision by the United States Court of Appeals for the Eleventh Circuit concerning the Patient Protection and Affordable Care Act (Pub.L. No. 111-148, 124 Stat. 119 (2010) in Florida ex rel Attorney General v US Department of Health and Human Services 648 F. 3d 1235 (2011) at page 25 "[t]wo key terms in the Act are: (1) 'essential health benefits package' and (2) 'minimum essential coverage.' Although they sound similar, each has a different meaning.

The term 'essential health benefits package' refers to the comprehensive benefits package that must be provided by plans in the individual and small group markets by 2014.... The Act does not impose the essential health benefits package on plans offered by large group employers to their employees. And 'essential health benefits package' must: (1) provide coverage for the 'essential health benefits' described in [section] 18022(b); (2) limit the insured's cost-sharing, as provided in [section] 18022(c); and (3) provide 'either the bronze, silver, gold or platinum level of coverage' described in [section] 18022(d) .... The Act leaves to the HHS to define the term 'essential health benefits' .... However, that definition of 'essential health benefits' must include at least these ten services:

  • Ambulatory patient services
  • Emergency services
  • Hospitalisation
  • Maternity and newborn care
  • Mental health and substance use disorder services, including behavioural health treatment.
  • Prescription drugs.
  • Rehabilitative and habilitative services and devices.
  • Laboratory services.
  • Preventive and wellness services and chronic disease management.
  • Paediatric services, including oral and vision care

Although the Appeals Court found that the prescription of belonging to the scheme, contained in the Affordable Patient Care Act, was unconstitutional in so far as it compelled Americans to purchase health insurance, the Appeals Court did consider the nature of the benefits to be provided in so far as the benefits constituted a direct and reasonable link to the expectations that Americans hold of what is or is not reasonable healthcare:

" The Government submits that healthcare and health insurance are factually unique and not susceptible of replication due to: (1) the inevitability of healthcare need; (2) the unpredictability of need; (3) the high costs of healthcare; (4) the federal requirements the hospitals treat, until stabilised, individuals with emergency medical conditions, regardless of their ability to pay; (5) and associated cost-shifting.

The first problem with the Government's proposed limiting factors is their lack of constitutional relevance. These five factual criteria comprising the Government's 'uniqueness' argument is not limiting principles rooted in any constitutional understanding of the commerce powers. Rather, they are ad hoc factors that – fortuitously – happen to apply to the health insurance and health care industry. They speak more to the complexity of the problem being regulated than the regulated decision's relation to interstate commerce. They are not limiting principles, but limiting circumstances...

At root, the government's uniqueness argument relies upon a convenient sleight of hand to deflect attention from the central issue in the case: what is the nature of the conduct being regulated by the individual mandate, and may Congress reach it? Because an individual's decision to forego purchasing a product is so incongruent with the 'activities' previously reached by Congress's commerce power, the government attempts to limit the individual mandate's far reaching implications. Accordingly, the government adroitly and narrowly re-defines the regulated activity as the uninsured's health care consumption and attendant costshifting or the timing and method of payment for such consumption." (at pages 131 and 132 and 135 to 136 of the decision).

The decision by the Appeals Court was followed by a decision by the Supreme of the United States in the decision of National Federation of Independent Business v Sebelius 132 S.Ct. 2566. In the dissenting decision by Justices Scalia Kennedy, Thomas and Alito, the following is stated:

" The primary problem with this argument is that [section] 5000A does not apply only to persons who purchase all, or most, or even any, of the health care services or goods that the mandated insurance covers. Indeed, the main objection many have to the Mandate is that they have no intention of purchasing most or even any of such goods or serves and thus no need to buy insurance for those purchases. The Government responds that the health-care market involves 'essentially universal participation,'.... The principal difficulty with this response is that it is, in the only relevant sense, not true. It is true enough that everyone consumes 'health care,' if the term is taken to include the purchase of a bottle of aspirin. But the health care 'market' that is the object of the Individual Mandate not only includes but principally consists of goods and services that the young people primarily affected by Mandate do not purchase. They are quietly simply not participants in that market, and cannot be made so (and thereby subjected to regulation) by the simple device of defining participants to include all those who will, later in their lifetime, probably purchase the goods or services covered by the mandated insurance. Such a definition of market participants is unprecedented, and where it is to be a premise for the exercise of national power, it would have no principled limits." (see pages 11 and 12 of the dissenting judgment)

The Government is presumably undergoing a process of formulating a NHIS with reference to legal principles already contained in law, most notably, the provisions of section 27(1)(a) of the Constitution of the Republic of South Africa, 1996, which has been heralded as the legal origin of the NHIS, being the right of access to healthcare services for all. However, a number of other statutes also inform this process and are of significant importance when one understands that these statutes require far more transparency of Government in relation to the formulation of benefits under the NHIS than section 27(1)(a). Statutes such as the Promotion of Administrative Justice Act No. 3 of 2000 as well as the Promotion of Equality, and the Prevention of Unfair Discrimination Act No. 2 of 2000, the National Health Act No. 61 of 2003 and the Consumer Protection Act No. 68 of 2008 inform the benefit-making process that must occur. Importantly, the National Health Act provides in section 12 that the National Department has a duty to disseminate information concerning a number of aspects relating to "...the health services for which [it is] responsible, which must include –

  • the types and availability of health services
  • the organisation of health services
  • operating schedules and time tables of visits
  • procedures for access to the health service
  • other aspects of health services which may be of use to the public
  • procedures for laying a complaint; and
  • the rights and duties of users and health care providers

The need for transparency, discourse and acceptance

In order for anybody to participate meaningfully in a NHIS debate, far greater transparency and, as a corollary, far greater acceptance of public participation is required in order to have such a meaningful debate:

" Stewardship can be defined as a function of Government responsible for the welfare of the population, and concerned about the trust and legitimacy with which its activities are viewed by the citizenry. It requires vision, intelligence and influence, primarily by the health ministry, which must oversee and guide the working and development of the nation's health actions on the Government's behalf. Outside the Government, stewardship is also a responsibility of purchasers and providers of health services who must ensure that as much health as possible results from their spending. In terms of the effective stewardship, Government's key role is one of oversight and trusteeship." (M Sama and V Nguyen eds. Governing Health Systems in Africa (2008) at page 5)

One is certainly compelled to read articles about how much NHIS will cost the country but the difficulty with the articles is that we don't know what it is that we are buying. How is one able to debate the reasonableness or otherwise of the costs of NHIS when one has no idea what it is that it represents from the point of the view of the benefit to the consumer-patient in South Africa? This glaring hole in the current debate evidences a worrying omission from the process with which NHIS is being implemented.

In so far as it is proposed that funding proposals may be published by the Government in February 2013, the proposals will need to have a context, being details about the benefits that are available through a NHIS to ordinary South Africans – both employed and unemployed. The debate about NHIS must occur within a legal framework, it must be reverent to the procedurally fair administrative action, which is ultimately the dictator of the process through which a NHIS must proceed for it to meet the requirement of legality - no matter how much it costs. In addition, further debate must be held about whether or not it is even plausible for the NHIS to exist within the confines of the Constitution in so far as the Government would have every citizen compelled to participate in such a scheme.

Constitutional discourse must occur in order for ordinary consumer-patients to understand whether or not they are being compelled to participate in a scheme for which they receive no benefit or a scheme in which they are richly rewarded for their loyalty in both participating and as South Africans enjoying and exercising fundamental rights under the Constitution:

" Of course, sub-Saharan Africa is not Haiti, and no one solution fits all. For the 48 countries, 800 languages, and more than 1000 ethnic groups in Africa, many projects are needed to address specific health problems and conditions. A requisite, however, is that African nations make every reasonable effort to promote and defend human rights. All African national have signed the Universal Declaration of Human Rights, and it is unacceptable that governments can still stand by and watch while people's rights are violated .... As Jonathan Mann stated, health and human rights are 'inextricably linked,' and only when they are taken together is human wellbeing likely to be advanced." (E Shuster "HIV/Aids in Africa: No more slogans" in P Viterbo and K Ngalamulume in Medicine and Health in Africa (2011) at page 97.


Certainly, whilst one is cognisant of the costs of such a large social engineering project, such as NHIS, one must not lose sight of the fact that a part of the engineering process is also a consideration of the benefits to be derived from its implementation. The benefits in this process remain secluded in mystery and shrouded in whispers that are completely in audible to the public.

The debate cannot meaningfully occur when so much is unknown especially in so far as benefits are concerned, which are a fundamental cornerstone in any NHIS structure along with other currently unaddressed issues such as the creation of a viable public sector that operates out of good quality and reasonably acceptable medical facilities, the existence of sufficient healthcare personnel to see to the needs of all South Africans across the country and an understanding of the South African burden of disease.

The debate that must occur is significant and it is not a debate that is to be dictated alone by costs but also by benefits and the necessity of providing good quality, efficacious and reasonable healthcare services to South Africans. Without a comprehensive debate, turning over the costs of NHIS is futile as no matter what it costs, if the benefits are simply unavailable, inadequate, unreasonable or irrational, the point of a NHIS is simply without merit - whether in law or commerce.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.