On Which Legal Arguments are the NHI Court Cases Set to Turn? Part 2: Right to Healthcare Services
By Jesse Copelyn
The NHI Act is facing a slew of legal challenges from multiple organisations. For this special series, Spotlight combed through court papers, and spoke with legal experts to pin down what specific arguments litigants are betting on. In part one, we focused on the claim that the scheme is unaffordable and therefore unreasonable. Here, in part two, we discuss the argument that the NHI will unjustifiably compromise people’s right to access healthcare services.
Since the National Health Insurance (NHI) Act was signed into law by President Cyril Ramaphosa in May 2024, eight different groups have challenged it in court, with some filing multiple applications.
One core argument which appears in different ways across many of these submissions is that under the NHI, people will have access to fewer health services, or simply a reduced quality of care, than what they currently have.
If this was true then the NHI could be in violation of Section 27 of the country’s Constitution, according to which government has to do what it can to achieve the “progressive realisation” of the right to healthcare services (along with the right to food, water and social security). Courts have often interpreted this to mean that the government not only has to take active steps to advance people’s access to healthcare, but also that it should avoid doing things that might limit their existing rights.
Sasha Stevenson, who heads the public interest law clinic SECTION27, explained that the Constitution uses the phrase “progressive realisation” because of a “recognition that not everything can be perfect straight away, so the government needs to take steps to move toward full realisation of certain socioeconomic rights”. She added: “What that means logically is that you can’t move backwards.”
There is however some wiggle room, said Stevenson. This is because the Constitution only expects the government to take “reasonable” steps that are “within its available resources”, she said.
Thus, if the government was cash-strapped and able to show that it simply couldn’t afford to maintain its current levels of health expenditure without seriously compromising other core rights, then it may be able to take steps backward without violating the Constitution. Stevenson argued that, at its core, the key idea is simply that the state must fully justify what it is doing.
To show that the NHI Act violates Section 27 of the Constitution, litigants will need to prove that it not only limits people’s right to healthcare, but that the government hasn’t provided good enough reasons for why it is doing this.
But why are litigants arguing that the NHI would limit people’s right to healthcare in the first place? Let’s start with medical scheme members.
Cutting out medical schemes
Section 33 of the NHI Act states that once the scheme is fully implemented, medical schemes will only be allowed to cover top-up health services that aren’t covered by the NHI. In addition, the Act requires “mandatory prepayment”, meaning people will have to pay to be covered by the NHI, whether or not they want to join.
Thus, unless someone was able to afford both the mandatory prepayment for the NHI, and complimentary cover from their medical schemes, they would have to switch to relying solely on the NHI for their medical coverage.
This is an issue for the Board of Healthcare Funders (BHF), which represents the medical insurance industry, and was one of the first groups to challenge the NHI in court.
“When you look at what medical scheme members are entitled to now versus to what they’re entitled to under an NHI scheme, it’s a regressive process,” Neil Kirby, who heads the healthcare and life science practice area at Werksmans Attorneys, which represents BHF, told Spotlight.
“You probably would be entitled to less under an NHI scheme than you would under the current regime,” he said.
Of course, at present we don’t yet know exactly what health services the NHI will cover, as the package of benefits has not yet been detailed. It thus may be difficult for courts to assess this claim.
When asked about this, Kirby said: “The current assessment by various economic experts is that if one were to price the value of the current basket of prescribed minimum benefits [the services which medical schemes have to cover]… and spread that cost over the entire population covered by NHI, the NHI would be entirely unaffordable.”
As a result, he said: “There would have to be some degree of compromise in respect of the benefits to be provided under NHI in order for the state to afford to purchase those benefits”. In other words, they’d need to offer less than what medical schemes currently cover.
In response to this, the National Health Department’s NHI lead, Dr Nicholas Crisp, denied that people’s coverage would be compromised under the NHI. In a conversation with Spotlight, he argued that the NHI would not need to incur the same total payment obligations as medical schemes in order to cover a comprehensive package of health services. This is given that it could purchase services more efficiently, he said.
Crisp justified this on several grounds. One is that private health providers are currently accused of overservicing clients, which he argues could be rectified under the NHI.
For instance, Crisp pointed to the Competition Commission’s Health Market Inquiry report, which found that private health facilities are reimbursed for each consultation, operation or other service that they provide. The report found that this “creates an incentive for providers to over-service patients, to over-invest in generously remunerated services, and under-invest in poorly remunerated services [even if they have a positive impact on patient outcomes]”.
Under the NHI scheme, a different reimbursement model would be used to cover health providers both at private and public health facilities. For instance, in the primary healthcare sector, the NHI would rely on capitation. This means that health providers would be provided a fixed fee for each patient, rather than for each individual service, removing the incentive to overservice, and thus overcharge.
Crisp also argued that the government is able to procure medicines and other health services at lower prices than the private sector partly by buying in bulk. Additionally, he noted that billions of rands are reportedly lost in fraud, waste and abuse within the private health sector, due for instance to fraudulent medical claims.
According to Crisp, the NHI fund would be able to save on all of these unnecessary costs.
Pushing back on this view, Professor Alex van den Heever, from the Wits school of governance, told Spotlight that there was no reason to think the state could purchase cover more efficiently than the private medical schemes.
In the public sector, he said that “whether you have a [national] monopoly like Eskom, or a public monopoly in a province like the Gauteng Department of Health, they hardly spend their money efficiently”. Van den Heever added: “For Tembisa hospital to lose R2 billion and not get a cent back in terms of actual products is an indication of the risk.”
He was referring to a damning report by the Special Investigating Unit which confirmed large-scale looting to the tune of around R2 billion meant for patient care at Tembisa Hospital in Gauteng’s East Rand. Their investigation zoomed in on nine criminal syndicates, with three of them pocketing nearly R1.7 billion. The SIU found that R122 million in kickbacks were paid to at least 15 current and former health department officials.
“So you have to have some real evidence that [the state would] be able to procure services more efficiently, and there’s no evidence. All the historical evidence suggests they’d do worse,” Van den Heever said.
Does the state have good reasons?
If litigants are able to show that the NHI was regressive for people on medical schemes in the sense that it diminished their rights, the courts might still decide that the government had provided a good enough justification for why these limitations are reasonable.
But according to Van den Heever, the government has thus far categorically failed to do this.
“From the green paper to the white paper to the [NHI] bill, there is not a single technical document that provides a clear rationale for Section 33 [the restriction on medical schemes],” said Van den Heever. Overall, the very question about what specific problems the NHI is trying to solve and how it would do this remain elusive.
He added that one public health professor had submitted court papers in support of NHI which argued that the existence of the private health sector undermines the public sector, for instance by hoarding doctors and specialists. Yet according to Van den Heever, “no technical report has ever been produced” which provides evidence for that claim.
Additionally, he noted that doctor shortages at public facilities are evidently not driven by private sector hoarding but by financial constraints emanating from mismanagement and corruption. This prevents public hospitals from hiring people who are available for work. (Previous Spotlight reporting has also suggested that the shortage of doctors in the public sector is driven by a lack of funding, rather than a lack of doctors.)
Similarly, the Hospital Association of South Africa (HASA) argued in court papers that the NHI Act’s restrictions on medical schemes serves “no rational, reasonable or economic purpose”.
The association also argued that there are no examples of health systems that impose these restrictions, aside from a few provinces in Canada, and thus Section 33 of the NHI Act is clearly “not a requirement for a successful national health system aimed at [universal health coverage]”.
Defending the restriction on medical schemes, Crisp said that if two different streams of health financing are allowed to continue, then so will inequity. He also stated that single-payer health systems funded by the state are not unusual, even if their exact form differs across countries.
Limiting the rights of public sector users
In addition to the arguments that the NHI Act will unjustly restrict the rights of medical scheme members, some have also argued that it will be regressive for public sector users.
One organisation making this argument is the Treatment Action Campaign (TAC). It has applied to be a friend of the court in the dispute between the South African Medical Association (SAMA) and the government. The TAC argued that the governance provisions within the NHI are so weak that they threaten the entire health system, including for those relying on government health facilities.
Stevenson, whose organisation SECTION27 is represents the TAC, said that checks and balances within the governance of the NHI fund are deficient, leaving it vulnerable to corruption and mismanagement.
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Van den Heever, who is serving as an expert in the SAMA case, seconded this concern. He also said that the NHI ultimately centralises the management and purchasing of healthcare services under national institutions. This introduces inefficiencies that will compromise patient care at government facilities, he argued.
“Healthcare is [a sector] where the purchasing and management [should be] decentralised,” he said, largely because different communities have different health needs.
Even in the United Kingdom, said Van den Heever, the responsibility for the National Health Service, which provides the majority of medical services, is devolved across England, Wales, Scotland and northern Ireland, with semi-autonomous trusts, boards and hospitals in each country having a major say in operational decisions.
Van den Heever argued that not only would the centralisation of health under NHI be highly undesirable, but the actual transition to this system from one in which provinces are responsible for healthcare would be enormously disruptive, impacting patient care.
Asylum seekers compromised by NHI
An additional argument concerns the rights of asylum seekers and undocumented people, a central concern for SAMA and the TAC.
Stevenson explained that under our current system, all people, including asylum seekers and undocumented migrants, have the right to free primary healthcare services in the public sector. Just like ordinary citizens, asylum seekers also have the right to access public hospitals on a means-tested basis (meaning your level of subsidisation is determined by what you can afford).
In addition, pregnant and lactating women, as well as children under six, are entitled to all services regardless of documentation status, and the government is compelled to screen, test and treat anyone with HIV.
Under the NHI Act, all of these rights are compromised for asylum seekers and undocumented migrants. This is because Section 4 of the NHI Act states that these groups are only covered for emergency care and for services related to notifiable conditions. The country’s list of notifiable conditions includes diseases like cholera and pulmonary TB, but excludes HIV, diabetes and many other common diseases.
Stevenson argued that this not only compromises the rights of individual asylum seekers, but makes for terrible public health policy.
“It essentially means dropping part of our population off the HIV programme,” she said.
“It would also mean we’re waiting more and more for emergencies, because people can access care [at the point of emergency] but not at a primary healthcare level. So you can’t go and get yourself checked for diabetes… But when your foot is gangrenous [a symptom of untreated diabetes] and needs amputation then you’re in an emergency situation.”
Overall, the Act in its current form constitutes a clear regression for asylum seekers, said Stevenson, and the government has provided no comprehensive justification for why it is excluding this group. If the government wanted to justify the exclusion of migrants on the basis that it is too costly to cover them under the NHI then they “have to show the numbers”, Stevenson said.
Thus far, they haven’t done so.
“There has been no assessment of the so-called burden of migrants in the health sector, let alone how many people fit into which category or how much money is spent on services for people,” said Stevenson, “Instead, there has just been this persistent scapegoating, and these broad statements about the burden.”
Court documents submitted by SAMA have made similar allegations.
“There is no reliable study which shows the extension of the NHI to foreigners will have a significant effect on the affordability of the NHI,” it argued, noting that in fact the converse may be true, as the contributions of foreigners to the economy may outweigh the costs of providing them healthcare.
Asked about this, Crisp said that they were aware of the issue, and that while it was a complicated matter, the state would ultimately have to ensure healthcare for all people, in line with its domestic laws and international agreements.
Disclosure: SECTION27 is mentioned in this article. Spotlight is published by SECTION27, but is editorially independent – an independence that the editors guard jealously. Spotlight is a member of the South African Press Council and subject to the South African Press Code.
Republished from Spotlight under a Creative Commons licence.
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