NHI will only ‘plague’ private sector with public health corruption – Chris Hattingh

According to the South African government, the National Health Insurance (NHI) is a “financing system that will ensure all South Africa citizens have access to essential healthcare, regardless of their employment status and ability to make a direct monetary contribution to the NHI Fund.” This is because healthcare is a “human right” and it “should not depend on how rich we are or where we happen to live”. However, Chris Hattingh of the Free Market Foundation believes that the NHI will only expose the private sector to the same corruption and inefficiencies that currently plague the public health sector, and that we cannot risk destroying those parts of the healthcare system that actually work. – Claire Badenhorst 

By Chris Hattingh*

At the time of writing, the Special Investigating Unit is probing Covid-19 funding-related contracts worth R5.08bn. A new report from Corruption Watch, “X-Ray: The critical state of the health sector in SA”, exposes the endemic, debilitating level of corruption in the public health sector. The report makes clear the myriad administrative problems in the public healthcare sector in South Africa and casts more doubt on the effectiveness of the state managing everyone’s healthcare needs in the form of the proposed National Health Insurance (NHI).

Based on whistle-blower accounts received from 2012 to 2019, the Corruption Watch report breaks down corruption incidents by province. The report highlights just how debilitating the effects of corruption are for people who seek assistance from the state but do not find it forthcoming. It should be a wake-up call for the duty the government has undertaken, and the crucial importance of cleaning up its mistakes and ensuring corruption is eliminated as much as possible, that service delivery can be as efficient as possible in the future.

The report highlights just how debilitating the effects of corruption are for people who seek assistance from the state but do not find it forthcoming

The report comes in the midst of the Covid pandemic and lockdown and should serve as a timely reminder that pro-NHI voices in government, and society generally, should very carefully re-evaluate their position. The NHI will centralise the management of all healthcare under the government, exposing the private sector to the same corruption and inefficiencies that plague the public sector. South Africa cannot accept the risk of destroying those parts of the healthcare system that work, albeit imperfectly. The state should focus on getting its own house in order, and providing those services it has promised to poor citizens.

Read also: Step aside govt, let private sector build capacity in the health sector – Martin van Staden

Greater state control increases the possibility for corruption. The more resources in the control of a highly centralised state, the more the bureaucrats in charge decide who wins and who loses. Friends, family, political connections – these are favoured, not necessarily those who can deliver goods and services as contractually agreed. And instead of agile, expedited responses to crises such as Covid, people are forced to contend with reams of red-tape and bureaucracy clogging the pipeline of resource allocation (in terms of both human expertise and equipment) to the most vulnerable areas.

Given that the state has assumed the role of providing healthcare to poorer members of society, it is tragic that said provision is severely hobbled by deep corruption. Covid showed just how many cracks there are in the South African government’s ability to provide services to people in poorer communities. However, the pressure the virus has exerted should also be something from which South Africa learns: The state should consolidate the resources and skills at its disposal, make it easier for each province to tackle its own health challenges, and ensure it can provide services to those who cannot afford them. It is through acknowledging its own faults and rectifying systemic issues regarding delivery that the government can improve its relationship with citizens. Simply proposing to nationalise the management of private healthcare will do nothing to solve the current problems in the public sector.

South Africa’s debt-to-GDP ratio will if it keeps on growing at the current pace, reach 100% within the next four years

There can be no doubt that the private healthcare sector has problems. But it is folly of the highest order to assume these problems can be solved through centralised government management of the sector. Covid has shown just how difficult it is for central planners, all around the world, to manage and plan for people’s decisions and actions. Competing market forces act as an incentive for private-sector competitors to improve their services and try to lower their prices. While this does not always happen, the incentive itself exists, whereas nothing of the sort is at play in the public sector.

Read also: NHI is morally bankrupt and why free healthcare is a myth – Hattingh

South Africa’s debt-to-GDP ratio will if it keeps on growing at the current pace, reach 100% within the next four years. There is simply no more wiggle room in the fiscus, and most assuredly not any kind of funding necessary to finance a plan that aims to manage the healthcare needs of over 50 million South Africans. Adding more resources into the system will not ensure that the system itself runs more efficiently. The government must take stock of the resources currently at its disposal, and assess how to administer those more efficiently.

South Africa cannot make the deadly mistake of assuming that corruption problems will simply disappear if the NHI is implemented. Indeed, when more funds are concentrated in the hands of politicians and bureaucrats – who can decide who receives which contract – the probability of corruption is only increased. Heading out of Covid South Africa has an excellent opportunity to adopt the necessary reforms that make innovation and growth easier; the NHI is yet another example of the state trying to concentrate yet more resources and control in its hands, something that the country should limit as much as possible in coming years.

  • Chris Hattingh is Project Manager at the Free Market Foundation. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.
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