oa South African Health Review - A financial feasibility review of NHI proposals for South Africa : perspectives on a national health insurance

Volume 2010, Issue 1
  • ISSN : 1025-1715



National Health Insurance (NHI) has been introduced as a reform proposal for the South African health system by the African National Congress (ANC) from 2007. Until now such proposals were not seriously considered as South Africa has pursued the path of developing a public health system capable of guaranteeing universal access to health care. Proposals tabled by the ANC in September of 2010, however, propose an alternative institutional path coupled with ambitious budget bids. This chapter seeks to unpack and evaluate these most recent proposals, concentrating on their financial feasibility. Overall the chapter finds little evidence to support the central objective of the reform which seeks to raise up to 5% of Gross Domestic Product (GDP) in additional taxes to achieve a total public spend equivalent to 8% of GDP. No international precedent can be found for such a proposal, with no other developing countries spending anywhere close to this level on public health. Were such a proposal to be implemented it would require that personal tax rates rise to implausible levels, with a general doubling of tax rates. Aside from the general financial considerations the institutional proposals, involving the implementation of what is termed a "SARS-like" organisation, raise serious financial concerns. Aside from a lack of clarity over why this organisation is necessary and what institutional weaknesses it seeks to address, the ambitious list of proposed functions suggest that it will be considerably more costly than indicated. This chapter largely concludes that the ANC proposals are not implementable as proposed and are unlikely to seriously address existing weaknesses in the health system.

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