The African National Congress (ANC) yesterday released details of its proposed National Health Insurance (NHI) that suggested the ruling party had tempered its initial hurried approach to the implementation of a programme that will have huge demands on the public purse and introduce big changes to the private health sector.

Key information released yesterday included a plan to stagger its introduction over three phases starting in 2012, and provided details on cost estimates.

They include:

- An initial five-year phase that will focus on rural areas, which will cost R128bn in its first year - significantly lower than private sector research that suggested more than R200bn was required to kick-start the NHI.

- Costs are expected to rise to R376bn by 2025.

- Private facilities were not obliged to be part of the NHI, and could carry on as private operators if they wished to.

Delegates to the ANC's national general council will discuss the NHI today.

Zweli Mkhize, head of the ANC's health committee, said a lot of preparatory work had been done and he was confident about the implementation in 2012.

Some in the ANC are impatient with the slow progress of the NHI that was adopted at the 2007 conference in Polokwane.

It is expected that some delegates will today push to have the NHI implemented sooner, as health is a priority of President Jacob Zuma's government.

The decision to stagger its introduction could have been influenced by the practical problems related to the dire state of public health infrastructure, a shortage of critical skills and funding difficulties.

Allowing private hospitals the choice of remaining so is expected to be a relief to private health operators that were uncertain of their future role.

It was initially feared that all private health operators would be forced to be part of the insurance that will combine public and private institutions.

Olive Shisana, who serves on the committee, said private hospitals could choose to remain private if they wanted to.

She said, however, they would forfeit the right to be funded from the state.

"If a private hospital is not accredited to become part of the NHI it will not get funded from the NHI," she said. "All hospitals must get accredited for quality and affordable services."

The aim is to have 25% of hospitals NHI-accredited by the start of the implementation phase in 2012.

Dr Mkhize said: "Membership to the NHI would be compulsory for the whole population, but the public can choose whether to continue with voluntary medical scheme cover."

The proposal suggests that the NHI be funded from various sources including a surcharge on taxable income, payroll taxes for employees and employers, and an increase in value-added tax which is earmarked for the NHI.

"The main source of revenue for the NHI fund will be allocations from general taxation," he said.

All of this will be combined in the NHI fund, from which all services covered by the NHI system will be paid for.

The funding model was being thrashed out with the Treasury.

Dr Mkhize said the NHI was "affordable", and that view was backed by a report of the International Monetary Fund.

The ANC estimates that R200bn is being spent on health services in SA this financial year, including money paid to private health schemes. The government allocated R101bn to health this financial year. He said the gap between the required money and the available funds was not "huge".

In 2008, R78bn was spent on private health schemes alone.

Early indications were that the government's overall health allocation needed to increase from 12% to 14,5% of the state budget.

"The NHI will provide comprehensive quality healthcare at less than the current spending by public and private sectors," he said.

Dr Mkhize said the government would aim to train extra healthcare workers and look externally for more medical specialists.

"The South African health system requires more doctors and nurses," he said.

"But we will be dealing with that. We need to improve the quality of our facilities and the number of staff, technicians and so on.

"The idea is to get good quality healthcare for everyone," he said. With Sapa

mkokelis@bdfm.co.za