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EF: How can we effectively raise awareness of the positive impact of the NHI and what strategies can we put into place so that there is a positive transition as it gets implemented?
NC: I believe there's still a considerable journey ahead before any meaningful implementation takes place. At present, although the Bill has been assented to, and there is now an Act, there are no funds allocated nor any progress on implementation because we are at the starting gates.
A major challenge arises from mounting court cases, with each party pursuing distinct legal strategies that threaten prolonged litigation, which we hear are threatened for up to two decades. Despite these adversities, we hope to swiftly resolve these issues through the challenges going to the Constitutional Court to bring clarity once and for all. The range of grounds on which the Act is contested, from trivial to substantive concerns, is quite alarming.
Moreover, our current underperforming economy poses additional difficulties, exacerbated by political settling down post-elections. Any escalation in political discord or societal unrest could further strain economic resources, thereby complicating healthcare funding even more. This situation underscores the complexity of the path ahead—it is not merely about the NHI but a multitude of interconnected challenges that demand resolution. Despite the uncertainties, we persist in our technical groundwork, focusing on enhancing digital systems and data management, which are crucial irrespective of the NHI's eventual fate. While we await political leadership clarity, our commitment to vital preparatory work continues unabated, driven by the belief that our efforts will prove valuable regardless of the energy expended.
EF: How can healthcare systems overcome the challenges of fragmented medical records and lack of data portability to enable seamless continuity of care for patients?
NC: Regarding digital health systems, the issue arises when each individual provider creates their own system, leading to a lack of portability when patients move between different levels of care or providers. Recently, I mentioned to others that over my long life, I have accumulated more than 40 medical records in this country alone, excluding other places I have lived. My records are scattered across a number of African countries with various providers, from dental to general practitioners and hospitals, making continuity of care a challenge. This is particularly critical for patients with chronic illnesses who need consistent lab results, treatments, and medical advice all in one place.
We are focused on developing interoperability standards and a common coding system to address this issue. Although some in the private sector are skeptical, it is crucial that this coding system be internationally compatible, enabling global comparisons. True international standards mean looking beyond the United States (where the private sector mirrors its coding) to include the entire world. Effective digital health systems must integrate both public and private sectors, ensuring a single patient identifier linked to a portable record. Each service delivery point/health establishment should have a unique, verified identifier to prevent malpractice and ensure the use of a common electronic medical record, even if individual practices have their own management systems. Achieving this would allow seamless referrals and continuity of care between providers. We are dedicating significant effort to strengthening digital health systems.
EF: How can we encourage collaboration among stakeholders, despite their diverse goals?
NC: We are fortunate to have a forum since 2014 that includes all public and private sector participants. In the private sector, however, information is often proprietary and used for financial gain rather than patient care. To move beyond this, legislation is necessary. While we have made progress through collaboration on protocols and system requirements, enforcing these standards through regulation is essential for true interoperability and improved patient care. We are now establishing a laboratory for vendors and users of digital systems to verify that their systems are interoperable. Soon, we will regulate that if your system cannot perform specific functions, it will be disqualified from certain operations.
Under the NHI, when implemented, providers with systems that are not interoperable will not be reimbursed, necessitating costly replacements for non-compliant systems. Therefore, it is crucial for providers to ensure their systems are up to date with the latest protocols, definitions, and data dictionaries. We will provide advance notice for any changes, such as shifts in coding systems or benefit structures, giving providers ample time—possibly over a year—to adapt. Transitioning is critical; it involves moving money, and functions, and simplifying administration gradually rather than abruptly.
Currently, South Africa has 71 medical schemes with 311 options, costing 21 billion Rand annually just for administration—almost 10% of private sector spending. Eliminating these duplications is a step-by-step process. Decisions must be made, and non-compliance with these decisions will result in exclusion from participation. This approach aims to be more cost-effective and patient-centered in the long term, despite the transitional challenges. In South Africa, much like in the United States, there is a strong belief in free market principles and individual rights. However, this often leads to greed and undermines patient care. It is essential to balance the right to work, earn, and practice autonomously with the patient's right to healthcare, as outlined in our constitution. We must reconcile these competing demands and obligations to create a fair and functional healthcare system.
EF: How can we make people see the value of NHI and that having a healthier neighbor is better for us all?
NC: The way this issue is portrayed in the media is heavily influenced by those who control the economy—about 15% of the population. The rest of the population, the 85%, rarely get a voice. The wealthiest 1% are the loudest, leveraging their resources and influence. They often omit crucial details about current healthcare spending and allocations. Currently, 49% of South Africa's healthcare expenditure is directed towards the public sector, funded by taxes, covering 85% of the population. This translates to about 5200 Rand per person annually. However, this system is plagued by duplication, corruption, and mismanagement, resulting in inefficiencies.
The private sector spends 51% of the total healthcare budget on just 14% of the population, costing over 27,000 Rand per person per year. Nearly 10% of this is purely administrative costs. Last year, a conference revealed that 28 billion Rand was lost to fraud, waste, and abuse, amounting to 11% of the total healthcare expenditure. This means that 21% of the total private healthcare spending is wasted.
Additionally, a health market inquiry revealed significant duplication and unnecessary care in the private sector. For example, almost 75% of babies in the private sector are born by Caesarean section, far exceeding the global standard of around 30%. The rate of tonsillectomies is four times the global average. This indicates a supplier-induced demand where unnecessary procedures are performed because they can be. There are substantial savings to be made in the private sector. The current system, with 71 medical schemes and 311 options, involving 7,000 brokers and 1.2 billion Rand annually spent on marketing, does not add value to patient care.
Before questioning if there is enough money, we must first ask if the current spending is wise. In the public sector, we leverage our large volumes to negotiate national tenders with fixed prices and volumes for three years, ensuring good prices. We also prioritize generics unless there is a compelling reason not to. In contrast, the private sector uses a single exit price model based on global market rates, leading to high costs for both medicines and devices due to smaller volumes and pricing strategies focused on innovative medicines rather than generics. To address this, we need to adopt a different approach, considering Africa-wide strategies, local production aimed at broader markets, and a more selective formulary.
South Africa spends 8.5% of its GDP on healthcare, which is higher than Mexico and possibly Spain, although our GDP per capita is lower in purchasing power parity. We are spending a lot of money on healthcare and we are not getting value for that money. The real question is not whether there is enough money or if the economy can continue to support healthcare spending. That is the American model, where 21% of GDP is spent on healthcare, accounting for 43% of global healthcare spending by one nation. Instead of emulating this, we should examine the experiences of middle-income countries like Mexico, Thailand, Indonesia, and Colombia over the past 25-30 years.
In South Africa, the wealthiest segment often views the country as an OECD nation, ignoring 85% of the population—the 53 million people—served by the public sector. For example, the ongoing Mpox outbreak is managed entirely by the public sector, with no financial contribution from the private sector. The government handles the procurement of medication and vaccination programs. This was also evident during the COVID-19 pandemic, where, although there was good collaboration, the public sector bore most of the management responsibilities.
The misconception persists because healthcare is viewed as a revenue-generating industry by some. Healthcare is seen as contributing to the economy through VAT, personal income taxes from high salaries, and other means. However, from a health perspective, this view is flawed. Healthcare spending should prioritize patient care over revenue generation.
We can achieve effective healthcare with 8.5% of GDP without the excessive costs currently incurred. Furthermore, the government subsidizes private medical insurance, diverting funds that could be better spent on public healthcare for the poor. Instead of subsidizing private insurance, those funds should be redirected to enhance public healthcare services.
If we start reallocating funds within the existing 8.5% of GDP spent on healthcare, we can create a more equitable and efficient system. However, some people in the private sector often portray me as uninformed, claiming that I'm neither an economist nor an actuary and have no understanding of the complexities involved. By the same token, these critics are not health systems specialists or even health practitioners. This misrepresentation is amplified because they control much of the media space, which is a significant challenge.
EF: What are the key historical, economic, and social factors driving South Africa's extreme income inequality, and what policy approaches could help address this persistent challenge?
NC: The elephant in the room in every conversation about South Africa's economy is the Gini coefficient, a measure of income and wealth inequality. South Africa's Gini coefficient is one of the worst in the world, currently just under 0.67. This stark inequality has deep historical roots, spanning 300 years of colonialism and apartheid. In South Africa, the Gini coefficient is closely tied to race: the majority of poor people are black, while the majority of wealthy people are white. Although there is a growing black middle and upper class, it remains small. A few individuals have amassed significant wealth, but the vast majority of people continue to struggle.
The country's unemployment rate is around 40%, and the legacy of disenfranchisement and lack of access to resources persists. Land ownership is a critical issue. During colonialism, land was seized by settlers—first the Dutch, then the English—depriving indigenous people of their primary assets. This loss of land and resources continues to affect economic opportunities for the majority. Despite 30 years of democracy, it is unrealistic to expect such deep-seated inequities to be resolved quickly.
Building an equitable economy requires addressing these historical injustices. Redistribution of resources and opportunities is essential. This perspective aligns with a utilitarian approach: maximizing the greatest good for the greatest number. Sharing resources more equitably can help build a stronger, more inclusive economy. In healthcare, this means reallocating funds within the existing 8.5% of GDP to ensure that everyone has access to quality care, regardless of their economic status.
The government has three critical responsibilities it cannot abdicate: health, basic education, and security. Tertiary education, while important, is not as fundamental as basic education. Literacy and numeracy are essential for economic participation. If individuals cannot read or write, they cannot contribute to the economy. Similarly, without good health, economic participation is impossible. Security is the third pillar, as safety and stability are necessary for a functioning society. If the state focuses on these core areas, other sectors like transport, logistics, factories, manufacturing, and mining can be left to the free market. However, without a solid foundation in health, education, and security, the state's citizens will not be able to engage productively in the economy. Investing in health and basic education is crucial for enabling economic participation. This is my philosophy and it is not shared by many who are anti-NHI.
EF: Do you have a final message for our readers?
NC: South Africa has always seen itself as an island in Africa, a perception rooted in its history as a white enclave with advanced technologies under a white government. This country has never fully embraced its identity as part of the African continent. My experience working in Nigeria for 16 years, spending six years in Ghana, and working across Africa, as well as growing up in Zimbabwe, has shown me that South Africa must acknowledge its place within Africa.
South Africa needs to move beyond its insular thinking. We must engage with Francophone Africa, Russia, China, and our BRICS partners, rather than limiting ourselves to Anglophone connections. Remaining an enclave is detrimental to our progress in healthcare and other areas. Our focus should be on getting healthcare, basic education, and security right while ensuring we actively participate in the global and particularly the African arena. Playing in isolation against giants like the United States is not a viable strategy. Our strength lies in collaboration and embracing our role within the broader African context.
