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The Negative Consequences of NHI

Despite the overall positive ontology surrounding the NHI plan, many fears and objections to it come into play. South Africa is known for its excellence in policy making and legislation but its fundamental downfall lies within it implementation and execution of its policies.

The NHI is seen as an overly ambitious idea, and many professionals feel that currently South Africa is not able to successfully implement this plan given its current conditions. The country is facing an increasing year on year public debt (currently at 6%) which hinders growth, development and places an expensive burden on our already ailing fiscus through high interest rates.

The NHI is set to cost R450 Billion rand according to the IRR, which further constrains our fiscal budget.

South African’s confidence in the state’s capacity and ability to run such large institutions is at a record low, thanks to the growing evidence of public sector corruption, mismanagement and the financial crises affecting state-owned entities such as Eskom, PRASA, SAA and many more, and yet the bill does nothing to assuage fears that the NHI Fund will not just create a new source of money for the corrupt.

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The lack of confidence in SOE’s and Institutions acts as evidence and proof of the NHI’s path to liquidation and inevitably the sinking of not just the public health sector (which is already ailing) but drowning the Private Sector (the only adequate and capable health sector) along with it. The private sector has managed to act as a magnet in retaining our health graduates and professionals, thus acting as a pull factor in preventing the further emigration of such valued human resources.

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The NHI brings fears that it will escalate levels of professionals who bring skills, community value, education, jobs and income to emigrate, which further reduces government’s already declining TAX/VAT base.
It has been speculated that the NHI will do away with Medical Aid schemes, which will cause a knock-on effect and closure of highly effective and competitive businesses. This will, in turn, induce more retrenchments as well as increase unemployment and business closures.

The panic and uncertainty around the NHI, has and will further decrease business and consumer confidence, along with foreign direct investment due to the linkages between the sense of panic (an economic phenomenon) and its negative impact on GDP growth.

The negative effects of an NHI are clearly visible and are most prominently stemmed from a poor management and implementation of the NHI.

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The Negative Consequences of NHI. (2020, May 22). Retrieved from https://studymoose.com/the-negative-consequences-of-nhi-essay

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