His Lordship’s unassailable healthcare manor… How Digital Vibes is a warning against NHI

This piece is essential reading for anyone stuck in the moralistic argument that we’ll fail in our duty of care as a nation if we don’t implement universal health insurance. They forget that it’s all about context – in SA’s case pretty murky. These authors neatly lay out the fatal design of the NHI castle and how the Lord of the Manor (read whichever incumbent or acting health minister) will rule supreme over its budget allocation, where his tenants may work, under what strictures, and what they’ll get paid. Their seemingly irrefutable logic makes nonsense of utterances by the immediate predecessor to the disgraced and turfed most recent ministerial incumbent. Dr Aaron Motsoaledi was fond of saying South Africa couldn’t afford not to have an NHI and many academics have since climbed on the politically correct bandwagon – a sleek, ethically attractive vehicle that confers instant status. Then along comes Dr Zweli Mkhize and his chief butler to remind us of the dangers of Lords and Manors… – Chris Bateman 

SIU report on Digital Vibes is a strong warning against NHI

By Michael Settas and Chris Hattingh*

The Special Investigating Unit (SIU)’s report interrogating the tender award to Digital Vibes for communications work on the proposed National Health Insurance (NHI), should serve as a strong warning on the dangers of government’s dogmatic desire to control ever greater levers of power within the economy. The NHI Bill seeks to monopolise the management of all healthcare services in the country – private and public – while dramatically increasing arbitrary and discretionary powers of the Minister of Health, thus enabling even greater levels of corruption.

Chris Hattingh

The SIU report found that former acting Director-General, Dr Anban Pillay, committed fraud, gross misconduct, negligence, and dereliction of duty. The report maintains that he should be prosecuted for his alleged “main actor” role in the irregular awarding of the R150 million contract to Digital Vibes. But the actions of Dr Pillay appear to have been under direct influence at the time from then health minister, Dr Zweli Mkhize. In court papers filed in July 2021, the SIU said evidence showed Mkhize had received gratifications from Digital Vibes, citing R3.8 million that flowed to his son.

An article by Peter-Louis Myburgh in the Daily Maverick indicates that when the decision was made to allocate budget for the communications project, Dr Mkhize already mentioned that the project would be run by Digital Vibes – well before the tender process started. That any Cabinet member so heavily interferes in operational matters is a guarantee that tender appointments will be manipulated for all the wrong reasons. This emulates the ANC’s bedrock cadre deployment policy and, as we heard in August from President Ramaphosa at the Zondo Commission, the ANC are unapologetic for continuing the sordid practice.

Some poor people who are subjected to sub-standard public healthcare and some frustrated, overworked medical personnel in the public sector have welcomed the NHI proposals, believing that it will alleviate current delivery problems. Alarmingly, even some academics provide unwavering support for NHI, under the guise of being based on constitutionally sound principles.

However, under the politically expedient pretext of improving healthcare, the design of this proposal has much more to do with feeding patronage networks. The policy proposes to centralise vast sums of money within the NHI Fund, that will be under the autocratic control of the health minister.

Even a neutral observer to this proposal would pose critical questions as to why it is being implemented when the ten NHI pilot projects were failures, when no in-depth technical assessment, no comprehensive costing, no institutional feasibility studies of the proposals have been undertaken during the 12-year policy process and why it is necessary to sweep aside two very substantial assets – the private and public health sectors – to be replaced with an untested and unworkable policy?

The policy involves removing the provincial equitable share and conditional grants that go to the provinces and direct these into the NHI Fund. It also proposes new dedicated NHI personal taxes to create a monolithic NHI Fund with a proposed annual budget of about R450 billion (in 2019 values).

If you have any doubt on our concerns, here is the control accorded to the Minister of Health (MoH) in the NHI Bill, that was passed by the National Assembly in 2019: NHI Fund board members are all appointed by the MoH through an ad hoc committee. The committee, also appointed by the MoH, will conduct interviews of candidates, and make recommendations to the MoH for final approval.

  • The MoH has sole discretion on the appointment of the chairperson and deputy chairperson and the removal of any board member
  • The CEO of the NHI Fund may not appoint or dismiss members of staff at executive management level without the prior written approval of the MoH’s board.

Here are a few extracts from the NHI Bill on other governance matters:

  • “The [NHI] Fund performs its functions in accordance with health policies approved by the Minister.” (Sec 10(3))
  • “The Fund, in consultation with the Minister, must determine the nature of provider payment mechanisms.” (Sec 41(1))
  • “The Board, in consultation with the Minister, must establish an Office of Health Products Procurement, which sets parameters for the public procurement of health-related products.” (Sec 38)
  • “The Fund, in consultation with the Minister, must purchase health care services, determined by the Benefits Advisory Committee.” (Sec 4(1))
  • “The members of the Benefits Advisory Committee, appointed by the Minister, ….” (Sec 25)

These powers allow the MoH to determine health policies, how much doctors will be paid, what benefits the NHI will provide and from whom health products can be procured.

Additionally, the current Office of Health Standards Compliance (OHSC) must accredit all medical institutions – private and public – in order for them to qualify to contract with the NHI Fund. Since the NHI is a monopoly proposal, wherein the private sector will not be permitted to freely operate as they currently do, failing accreditation from the OHSC will put an institution out of business. Conversely, achieving accreditation from the OHSC means guaranteed access to contracts to deliver services and get paid by the NHI Fund. In many cases these contracts will involve vast sums of money. Guess who currently appoints the entire leadership of the OHSC? Again, the Minister of Health.

Such extensive commercial influence accorded to the OHSC under the NHI policy, requires its independence from the executive. The current proposal is analogous to having the Auditor-General and their board appointed at the sole discretion of the Minister of Finance, with no fixed term or security of tenure. It is abundantly clear that de facto control of the NHI Fund will reside entirely with the MoH. The MoH would easily have control over procurement of R450 billion in services and the accreditation process of the OHSC, that will determine what public or private health establishments are able to contract with the NHI Fund.

The NHI Board, under such hegemonic control, will simply be a smokescreen through which to artificially project legitimacy of good governance.Not only does the NHI Bill effectively give a single politician easy access to an incomprehensible amount of money, it also establishes a dictatorship in the healthcare matters of every single South African.

The conjuring up of this NHI Bill is the starkest example you will find of immutable cravings for the Marxist and statist ideologies of central planning, unfettered access to public monies and the dissolution of free market enterprise. And we all know where that will leave our health services.

  • Michael Settas is Chairman of the Free Market Foundation’s Health Policy Unit. Chris Hattingh is Deputy Director at the Foundation.
  • The views expressed in this article are the authors’ and not necessarily shared by the members of the Foundation.
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