Ideas Matter | NHI will be the corrupt elite's biggest cash cow yet

Nothing can better expose the calcifying, dynamism-killing effects of government overregulation, than a crisis. As of late June, hospitals and healthcare workers in Gauteng are apparently close to being overwhelmed by new COVID-19 infections. Certain hospitals in the province cannot be used because of fire damage and stalled repairs (Gauteng Govt Still Can’t Say When Charlotte Maxeke Hospital Will Reopen) or because there aren't enough staff available (Major healthcare worker shortages – R460-million Gauteng hospital stands empty). Healthcare in the Eastern Cape is on an even more precarious footing – Minister Mkhize was informed in March 2021 that the province's health department would run out of money by July. [Note: It appears that some sections of the Charlotte Maxeke hospital may be opened on 28 June 2021].

Despite the loftiest rhetoric from those who think the proposed National Health Insurance (NHI) will miraculously fix South Africa's myriad structural and incentive-based healthcare problems, this latest crisis should serve as a foretaste of the future that all citizens will experience if the management of healthcare is monopolised and centralised in the hands of the state. Decaying hospitals, staff-shortages, and lack of access to sufficient equipment will be the order of the day.

For an additional insight on how things will 'work' under the NHI, look no further than the Digital Vibes corruption allegations currently hanging over Minister of Health Zweli Mkhize, who is on special leave, and over the whole Department of Health (DoH). The latest detail in the saga – and millions lost to corruption that could have been used to better prepare healthcare facilities for increased numbers of COVID cases – was investigated and reported by Pieter-Louis Myburgh for Scorpio.

Digital Vibes was apparently paid R1.1 million by the DoH for the creation of the NHI’s proposed mascot, a Nguni cow character named 'Dr Pelo.' Digital Vibes managed to turn a 314% profit by paying a local animation studio only R266,000 to develop Pelo – and proceeded to bill the DoH in two separate invoices, one for R800,000 and the other for R300,000.

With the massive control and discretionary powers that the NHI will bring – and the creation of the largest state-owned entity in South African history (some estimates place the yearly cost of the NHI between R400 billion and R700 billion) – it is inevitable that the NHI cash cow will be subject to waste, inefficiency, and regular instances of corruption. Milking state coffers for personal and familial enrichment will be a central feature of the NHI – that is where the incentives point, and South Africans should not be surprised when yet more corruption scandals surface in the future.

The NHI will not resolve any of the problems in either the public or private healthcare sectors. It is unclear how forcing all healthcare under the management of government – as envisioned by the NHI – will solve problems such as nurse shortages and mismanagement (and indefinite closure) of public hospitals. Pouring more money into public healthcare will not incentivise the improvement of services, and subjecting healthcare workers to yet more state bureaucracy and mismanagement will likely drive more of them overseas, thereby exacerbating staffing shortages all around the country.

For South Africa to attain a measure of quality universal health access, the strengths of the private sector should be encouraged. In other words, onerous, unnecessary licensing and inefficiencies in the training of doctors and nurses be removed. The state, on the other hand, should adopt a narrow focus on improving what is on offer in the public sector.

If South Africa proceeds to mix yet more regulation and bureaucracy with healthcare, quality of care and innovation will decline across the board. Only those with the necessary political connections will have access to some measure of good healthcare – or will simply fly to countries such as Singapore to obtain these services.

South Africans have chosen – and in many instances, been forced – to sacrifice too much over the last year. From lost education to time with loved ones, to their very businesses, many tried to do their best to limit the spread of COVID-19. For all the rhetoric of 'sacrifice' on the part of government, that ‘we are all in this together,’ the only people in society who lost livelihoods and savings were everyday people, not politicians and officials.

Now that a third wave is spreading around the country, people should rightly ask, was the only thing government officials and the politically connected were focused on, the looting of emergency funds? What happened to addressing the crisis and preparing healthcare facilities to a satisfactory level? South Africans' economic freedoms and civil liberties were gutted by government choosing 'lives over livelihoods' – as though life, and improving the average standard thereof can occur in the absence of economic activity. The mere possibility of stricter lockdowns is indicative of this government's ideological and policy failures – and ultimately citizens will have to bear the ultimate cost.

This article was first published on City Press on 29 June 2021.

Chris Hattingh

Chris Hattingh is Deputy Director at the Free Market Foundation. He sits on the Foundation's Executive Committee and Health Policy Unit. He is a member of the advisory council of the Initiative for African Trade and Prosperity, as well as a Senior Fellow at African Liberty.

Publish date: 06 July 2021
Views: 27 801

Chris Hattingh, NHI, healthcare, corruption, Healthcare

The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation. This article may be republished without prior consent but with acknowledgement to the author.

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