NHI: Signed, sealed - but who will pay? - Patrick McLaughlin

Key topics:

• NHI progresses without a clear or detailed funding strategy

• Treasury remains silent on financing South Africa’s universal healthcare

• Political timing overshadows practical and fiscal implementation plans

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By Patrick McLaughlin

At a recent meeting of Parliament’s Portfolio Committee on Health, the Department of Health painted a picture of progress and purpose. Minister Aaron Motsoaledi, with his ever-determined deputy Dr Nicholas Crisp, described the Department’s 99.4% expenditure rate and “steady movement” towards the implementation of National Health Insurance (NHI). On paper, it sounded like a department in control of its destiny.

But beneath the confident language of reform lies an uncomfortable truth: no one — not the Minister, not the Department, and certainly not the National Treasury — has yet explained how this vast national project is to be financed. Nor has anyone provided clarity on the machinery of management, engineering, and logistics required to make it real.

A plan without a price tag

The NHI has become South Africa’s most ambitious social undertaking since 1994 — and arguably its most uncertain. It is not merely a new health policy; it is, in practice, a complete rebuild of a nation’s medical infrastructure. It would require re-equipping hundreds of hospitals, replacing worn-out medical technology, refurbishing operating theatres, and rebuilding support systems from refrigeration and laundry to waste management.

That scale of overhaul is closer to a 30-year engineering and logistics programme than a five-year social policy. Yet, in the committee’s presentation, there was no reference to capital procurement frameworks, maintenance cycles, or project engineering teams. The NHI rollout appears still to rest on the same two figures: Minister Motsoaledi, the political visionary, and Dr Crisp, the policy architect.

No mention was made of specialist implementation units or partnerships with the engineering and medical manufacturing sectors. No visible evidence exists of coordination with Treasury, whose fiscal reality must eventually collide with the Department’s ideological optimism.

Treasury’s missing voice

That silence from Treasury has become striking. In the months since the President’s ceremonial signing of the NHI Bill — a political milestone hailed as a triumph for universal healthcare — neither the Minister of Finance nor senior Treasury officials have offered any statement on how this colossal reform will be funded.

No tax instruments, medical scheme reallocations, or ring-fenced levies have been proposed. For what is effectively a multi-trillion-rand national commitment, the absence of financial leadership borders on the extraordinary.

South Africans have seen this movie before: bold promises of transformation announced with fanfare, followed by months or years of silence when the bills arrive. What makes the NHI case exceptional is that the fiscal planning appears not to have begun at all.

The politics of timing

That raises a second question — not of economics, but of timing. With local elections approaching, the NHI’s public promotion looks less like a phased policy and more like a ready-made headline for the ANC manifesto.

The Department’s confident briefings, full of promise and symbolism, serve a political function even if implementation lags far behind. They suggest delivery, resolve, and purpose — the ingredients of an election narrative. But the absence of a coherent financial or technical base suggests something else: that the NHI has become a political theatre piece, a dream presented to the public for applause, not scrutiny.

The President’s own role in this story only deepens that impression. His signing ceremony earlier this year was grandly staged, but no subsequent engagement with the fiscal or administrative realities has followed. The symbolism of the act — ink on paper, cameras flashing — has replaced the hard questions of governance.

Engineering the impossible

Even the best-intentioned dreams require structure. Implementing the NHI will demand a level of administrative coordination and systems design that the public sector, at present, simply does not possess.

South Africa’s public hospitals already struggle to maintain basic infrastructure. Procurement delays for equipment such as scanners, dialysis machines, and theatre instruments are routine. In some provinces, maintenance backlogs exceed 70%. Yet, under NHI, these same systems are expected to manage a nationalised equipment, staffing, and payment model covering tens of millions more citizens.

The logistical requirements are immense:

• New IT systems for patient records and hospital management.

• A unified procurement system for all medical consumables and capital items.

• Rural and township clinic upgrades.

• A new distribution network for pharmaceuticals and medical devices.

To imagine this being achieved without a technically competent project management body — and without Treasury’s deep involvement — is to engage in fantasy.

The illusion of expenditure

The Department’s reported 99.4% expenditure rate was presented as evidence of efficiency. But a closer look suggests that it may be little more than the full use of available funds — not proof of outcomes. High expenditure rates are common across departments under pressure to demonstrate progress, yet they often disguise serious project inefficiencies or last-minute spending to meet targets.

If 99.4% of available funds have been spent, yet the system remains overstretched, under-equipped, and short-staffed, what confidence can be drawn from the number? The figure demonstrates activity, not achievement.

Business and investors take note

For the business sector, the implications are significant. The NHI’s eventual funding model — whatever form it takes — could involve:

• New taxes or levies;

• Mandatory contributions from employers and medical schemes; or

• Redirected VAT and income tax allocations.

Until Treasury breaks its silence, companies cannot plan for these outcomes. Nor can private hospitals, medical aid administrators, or insurers anticipate what regulatory framework they will operate under in two or three years’ time.

At present, the NHI Bill exists as a legal shell — politically enacted but financially hollow.

A dream without numbers

Minister Motsoaledi’s commitment to universal healthcare is genuine; few doubt his sincerity or moral passion. But sincerity does not build hospitals or balance budgets. The gap between the Department’s ambition and the state’s capacity has never been wider.

Until the Department of Health, National Treasury, and the Presidency speak with one voice on the financial reality of NHI, the project remains a vision — a noble but unsustainable dream.

For now, the NHI is a policy signed in ink, not in numbers.