South Africa Healthcare National Health Insurance

National Health Insurance in South Africa: An Update

The National Health Insurance (NHI) Bill was passed through parliament almost unanimously by the National Council of Provinces (NCOP) on December 6, 2023. It is currently waiting to be signed into law by President Ramaphosa.

The bill, a fund intended to provide universal health access for all legal residents in South Africa, has been moving through the parliamentary process since 2019, and while most agree that universal healthcare has noble intentions, the bill in its current form is controversial, drawing much criticism from many quarters.

The bill is extremely vague on how it will be funded, as well as its implementation models. Several critics have raised concerns over its constitutionality. The Western Cape province (who rejected the bill) questioned its legality if healthcare services, usually the prerogative of the provincial government, would now be centralized and administered by an organ of the national government. There are questions about the Government’s ability to administer the fund appropriately and transparently.

According to the National Health Minister, Joe Phaala, legislation will proceed in stages if the bill is signed by the President. The door would not be closed on further consultations with key stakeholders and more details will emerge as further policy and implementation plans are fleshed out. The full process of standing up the NHI will take several years as various committees, counsels, advisories, and staff still need to be developed who will craft the Act and then implement it.

Currently, South Africa operates on a two-tier system. Approximately 15 percent of the population who can afford insurance make use of private healthcare which is considered world-class. Most of the population uses the public system, which is underfunded and plagued by chronic medicine and staff shortages, as well as dilapidated infrastructure. Under NHI, private healthcare would fall away, and the South African Government would be the main purchaser of healthcare goods and services, and the regulation of prices.

Although NHI is several years away from implementation, and much of the technical aspects, as well as its funding remain nebulous, the following could have a potential impact on U.S. companies:
Procurers, i.e. the South African Government, will likely make extensive use of generic medicine, which may pose a challenge for U.S. pharmaceutical innovator companies.

South Africa is a price-sensitive market, even more so under NHI, meaning that procurers are likely to focus on price at the expense of quality as they emphasize adequate care, rather than best-in-class. 
The main objective of NHI will be the provision of primary and emergency healthcare. Elective procedures will take a backseat. Providers may find themselves in a much smaller market.

Depending on how NHI will be managed and administered, longer wait times for payment.

For more information, please reach out to Commercial Specialist Felicity Nagel, felicity.nagel@trade.gov in Cape Town, South Africa.

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