# LETTER: NHI will do more harm than good

- Link: https://dearsouthafrica.co.za/2019/10/28/letter-nhi-will-do-more-harm-than-good/
- Published: 2019-10-28T16:27:06+02:00
- Author: dearSA

![](https://cdn.dearsouthafrica.co.za/wp-content/uploads/2019/10/20191228/Screenshot-
2019-10-28T162502.373.png "Screenshot - 2019-10-28T162502.373")

### Proposed national health insurance will not improve efficiency and reduce costs, but will be a magnet for fraud and corruption

Universal health coverage is an important goal, which SA can attain with the right
policies. However, the proposed national health insurance (NHI) will do far more
harm than good (NHI will help create a more equal, productive society, October 24).

NHI proponents (in the presidency’s policy unit and NHI “war room”) assert, without
evidence, that the NHI will end queues, improve efficiency, reduce costs, promote
innovation and contribute to economic growth and socioeconomic stability”.

The reverse is true. Waiting times will double, as they have in (wealthy) Canada
under its broadly similar “single-payer” system. Emigration will reduce the number
of health professionals, increasing the burden on those that remain.

Costs will rise sharply, if only to pay for the huge bureaucracy needed to administer
NHI controls over fees, prices, medicines, treatment protocols and medical technologies.
Centralised top-down planning will stifle innovation and erode efficiency. Stock-
outs and already defective maintenance will worsen as suppliers wait for payment
from the NHI, the only permitted purchaser countrywide.

The NHI fund’s enormous revenue (about R450bn a year at the start) will be a magnet
for fraud and corruption. Major additional taxes will also have to be imposed on
a small and already overburdened tax base, ostensibly to fund the NHI. But without
legislation ring-fencing this additional revenue for NHI purposes (the Treasury 
is averse to ring-fencing), the extra monies will soon be diverted to public service
wages or more bailouts for state-owned enterprises.

Reduced choice, diminished quality, long waiting times and increased taxes will 
give the skilled middle class yet more reason to emigrate, curtailing economic growth,
making it harder to sustain the social wage, and adding to destitution and despair.

Section 27 of the constitution does indeed require the state to “take measures” 
to expand access to health care. But it says these must be “reasonable” and match“
available resources”. The NHI fails both these crucial constitutional tests.

**Dr Anthea Jeffery
 
_Institute of Race Relations_