NHI scheme could cause professional healthcare workers to emigrate

The National Health Insurance (NHI) bill which was tabled in parliament last week has received mixed response but the biggest concern is South Africa’s struggling middle class are going to suffer further when taxes are raised in order to fund the scheme.

The cost of outlay for the NHI

It is estimated that the NHI will cost around R256-billion and as an economist from the North-West University Business School, Raymond Parsons said, the country is unable to fund a scheme of this magnitude due to the declining tax revenues, escalating debt, the excessive public sector wage bill and continual funding of state-owned enterprises such as Eskom.

The Free Market Foundation (FMF) have warned that payroll taxes will need to increase in order to fund the NHI scheme causing more strain on the cash strapped consumers. There will also be a surcharge on personal income tax.

How many people have medical aid?

According to a report released by Stats SA in May there are 47-million South Africans who do not have medical cover, which means only 9,4-million people enjoy the benefits.

Mass emigration will cause a healthcare shortage

While the NHI promises to have a large network of healthcare professionals, fears of a mass emigration are widespread.

Around 17% of healthcare professionals emigrate annually but this figure rose to 30% in June and July according to Profmed medical aid CEO Craig Comrie.

Solidarity published research which reveals that around 83.2% of healthcare workers believe professionals will leave the country should the NHI be implemented and 43% said they themselves will consider emigrating.

A shortage of specialists, doctors, nursing staff and other healthcare workers will make it impossible to implement the scheme.

Concerns over corruption

The Citizen reported that the ANC want to centralise the money in the medical system under it’s control. Judging by the way all state-owned companies are struggling financially due to corruption, this could result in another disaster.

Job losses in the health sector

BusinessTech reported that if the state does not purchase any private hospital services under the NHI scheme there will be around 99.600 jobs lost and R31-billion shed from the GDP.

Currently Netcare, Mediclinic and Life Healthcare which are all JSE listed, contribute around R55.5-billion a year to the GDP.

Should pricing be capped at 23% lower than what they are at present, there could be job losses of around 132,000.