Institute of Race Relations not a fan of the NHI Bill

The South African Institute of Race Relations (IRR) believes the National Health Insurance (NHI) Bill, in its current form, will stifle innovation and reduce efficiency in the healthcare sector.

The NHI Bill was presented to Parliament for consideration on Thursday and it has come in for some scathing criticism. Most notably for failing to suggest how much it might cost or where the money is going to come from.

The Democratic Alliance (DA) has, until this point, been the most vocal of the objectors, calling the NHI Bill a “disastrous piece of legislation“.

The official opposition is concerned by the plan to run the NHI like a state-owned enterprise (SOE), considering the current financial health of other high-profile SOEs such as Eskom, South African Airways, or the South African Broadcast Corporation.

Institute for Race Relations skeptical of NHI

The IRR has now added its dissenting voice to that of the DA, claiming the NHI will be nothing but another vehicle for corruption that will get bogged down with bureaucracy and completely starve the healthcare sector of efficiency and innovation.

“This means the state will decide on the healthcare services to be covered; the fees to be paid to doctors, specialists, and other providers; the medicines to be prescribed; the blood tests to be allowed; the medical equipment to be used; the health technologies to be permitted; and the prices to be paid for every item, from aspirins, and ARVs to sutures and CAT scanners,” it said in a statement.

It is also skeptical about claims the NHI will cut costs in the healthcare sector.

“The government claims these controls will be effective in cutting costs and enhancing quality. But the huge bureaucracy needed to implement them will be costly in itself,” the institute said.

“Pervasive regulation will also stifle innovation, reduce efficiency, and promote corruption.”

Impact on private medical aid sector

And finally, the IRR is concerned about the impact the NHI will have on private medical aid schemes, which it believes play an important role in driving innovation in healthcare.

It claimed it would be better to help low-income households afford private medical aid rather than attempting to destroy the industry altogether.

“Low-cost medical schemes and health insurance policies should be encouraged, not restricted. Tax-funded health vouchers should be provided to low-income households so that they can also afford to join these schemes or buy these policies,” the Institute of Race Relations said.

“Medical schemes and health insurers will then have to compete for their custom, which will encourage innovation, promote efficiency, and help to hold down costs far better than a massive and corruption-prone NHI bureaucracy will ever do.”