The reasons are not clear to many people and the shift is, in fact, a source of concern. This is not because they do not acknowledge the critical importance of an improvement in health service delivery, but because it may lead to a reduction in the importance and impetus already placed on broader social security reform. This reform will be one of the most critical vehicles in the promotion of higher long-term savings - crucial for SA's investment and growth capacity, as well as the financial independence of households.
Meanwhile, NHI will predominantly bring forth the inverse of this outcome - namely, higher consumption expenditure overall. There is little doubt, therefore, why this policy refocus is resulting in a notable level of unease. Given the ripple effects it will have across the economy as well as the competition for dwindling resources, an integrated consideration of these two policy programmes is imperative.
Treating health as part of the broader social security need should in no way undermine the role of health insurance. Health ought to be seen and treated as a subset of social security and ought not to be dealt with in isolation from broader social security and retirement reform. In fact, if we consider that health dominates one's expenditure basket in retirement, this makes a stronger case for dealing with these matters as a package. Studies we have done show how expenditure patterns influence replacement ratios. The costs of health are significant in this regard.
In whichever direction we go and whichever policy we emphasise, each of these policies will compete for resources from the fiscus and, as such, the taxpayer. That, to a large extent, may be the concern that people have. It is not so much a concern that people do not appreciate the importance of health insurance. But rather that it has to be undertaken within a broader context, ensuring consistency and sustainability.
In order to make sure that we achieve equity and optimality in our policy design as well as implementation, it is imperative that these considerations are undertaken as a package. It is not difficult to imagine that these processes may share platforms and human resources, for collecting contributions and distributing benefits. Further, even on design, there is a host of considerations that have yet to be considered in tandem. One of these is the cross-subsidisation principle expected to drive both social security and NHI. Therefore it makes economic sense to deal with these together.
To add to these concerns, there have been undertakings to implement NHI swiftly, but it is not clear how prepared SA is for such an entity, mainly because little is known about the technical rigour it has been subjected to - particularly, the fiscal implications side by side with SA's disease burden.
Though competing policies are common, it is rare to have competition among such significant policy matters. The last such important policy choice could have been that between the recapitalisation of Eskom and the arms deal over a decade ago. It can be argued that NHI is a necessary but insufficient intervention for the problem we face as a country. Secondly, it ought to be seen as part and parcel of the broader aim of dealing with welfare, and as such should form a part of a comprehensive social security plan for SA. Should it be decided that health is the first priority for implementation, then so be it, but at a policy level it should not stand alone.
Masilela is head of Sanlam's policy analysis
Ranking the Analysts 2009
