Picture: THE TIMES
Picture: THE TIMES

THE Treasury’s discussion document on financing mechanisms for National Health Insurance (NHI), originally due for publication last April, is now expected to be published for comment only later this year, Finance Minister Pravin Gordhan told reporters on Wednesday. "The delay is ... to ensure all important stakeholders have been consulted," he said.

The government wants to introduce NHI to deal with inequalities in the health services.

Exactly what form NHI will take and how South Africa will pay for it are questions the government has yet to answer. The discussion document will "examine arrangements for risk and revenue pooling, mechanisms for the purchasing of health services, including the size of the cost of the health benefits package and the mix of public and private provision of healthcare", says the budget review.

Better-off consumers are likely to pay higher taxes in one form or another to supplement what the government allocates directly from the fiscus, a point alluded to by Mr Gordhan in his budget speech. "The initial phase of NHI development will not place new revenue demands on the fiscus," he said. "Over the longer term, however, it is anticipated that a tax increase will be needed."

The affordability of NHI hinged on the growth of the economy, he said. "If we succeed in driving growth towards 5% a year and government revenue doubles in the next 20 years, major infrastructure projects and new policy initiatives such as NHI will be affordable with limited adjustments to tax policy. But if growth continues along the present trajectory, substantial spending commitments would require significant adjustments in revenue and (spending) reductions."

The Treasury’s chief director for health and social development, Mark Blecher, told delegates at a conference at Wits last month that the NHI proposals would require an extra R80bn to be raised over and above the health budget by the fiscal year 2025-26. Payroll taxes, increased VAT or a surcharge on taxable income were possible mechanisms to do this.

Last week Dr Blecher told Parliament’s standing committee on appropriations that a 100-page document had been prepared and discussed by the ministers of finance and health. It was now being discussed by their directors-general and would likely be released "around the same time" as the White Paper on NHI, which follows on from the Green Paper on NHI released in August 2011.

Wits health economist Alex van den Heever said the grant reform was merely "shuffling the deckchairs" and was unlikely to have any significant impact on provincial health departments’ capacity to spend money efficiently. His analysis showed these departments had received a 58% real increase in funding between 2006 and 2013 to about R127bn, yet in many parts of South Africa patients were unable to get quality healthcare.