NHI Snippets (3): Will NHI lose jobs?

Today I read an article in The Star’s business report entitled Private hospitals highlight danger of job losses (page 15 with a follow-up on page 16).

One of the points made is that the private hospital industry makes a large contribution to the economy, both directly and indirectly, through job creation and tax contributions.  If patients who were formerly privately insured were no longer able to afford private cover (and use private hospitals) because they were obliged to pay mandatory NHI contributions, this could result in job losses, at least according to the article.

I think it is valid to explore the impact of any proposed reform on the economy (as long as one balances this against other benefits) and I would be very interested in seeing modelling exercises that attempt to estimate this impact comprehensively.

Off the top of my head, though, I question the logic of the article on the following grounds:

1. The public health sector is already a massive employer, far larger than the private sector, and is set to grow under NHI.  This is because NHI is intended to expand health care coverage dramatically.  This will require an expanded workforce, especially in the public sector but quite possibly also in the private sector, especially at the primary care level.

2. As the article states, only a quarter of those who gain employment because of the existence of private hospitals are directly employed by those hospitals.  The other three-quarters are employed by companies that service private hospitals in some way.  If patients were to shift to public hospitals under NHI, presumably there would be a similar positive knock-on effect for entities (both public and private) that service public hospitals. 

3. NHI is intended to make financial protection for health care more affordable for everyone, including employers who currently pay large subsidies towards workers’ medical scheme cover.  This should make it cheaper for employers more generally to take on additional staff and boost employment.   

3. In the long term, improving the health of a country’s population leads to economic growth (at some stage I’ll haul out some evidence for this).  

So I can’t see NHI damaging employment, at least if it is designed and implemented well.  In any case, I think the heart of the affordability problem is really the high cost of private care, especially in hospitals.  We can talk later about the reasons for this but, in the meantime, you might like to read some facts about the efficiency of the private sector in a related post (click here).


NHI Snippets (2): Poor health in South Africa

Oops, an earlier version of this post had incorrect information! – I copied it from what I thought was a reliable source but didn’t check it.  This is what happens when writing late at night!  In future, if any readers notice mistakes, please let me know.  Here is the corrected version …

“In my previous post I made two points – one, that South Africa spends a large amount on private health care and, two, that the health of South Africans is poor in comparison to other countries of equivalent wealth.

I’m going to elaborate the second point here.

Set aside for a moment the question of why health is poor, and concentrate on grasping some simple health indicators.

One of the most shocking statistics is that, every year, 147 women die from causes linked to child birth for every 100,000 births.  This is known as ‘the maternal mortality rate’ and is around 4 times higher than the target of 38 set for the Millennium Development Goals (high-income countries usually have rates that are in the single digits as shown here). 

Of course, one could argue that South Africa’s high maternal mortality rate reflects the HIV/AIDS epidemic.  This is true to some extent:  it is estimated that just under half (around 44%) of maternal deaths can be attributed to HIV/AIDS.1  Yet this still leaves South Africa with a high non-HIV/AIDs-related maternal mortality rate and, in any case, a good health system should be able to reduce the impact of HIV/AIDS on maternal mortality.

Here are some indicators that reflect the poor health of children in South Africa:



(around 2008)

2015 Millennium Development Goal target

Number of children who die before they reach the age of 5 for every 1,000 who are born



Number of children who die before they reach the age of 1 for every 1,000 who are born



For a later post I’ll find you some graphs that show how this performance compares to other upper middle-income countries.

I’ll also see whether I can source some more up-to-date statistics for South Africa from the Medical Research Council’s Burden of Disease Unit.”


1.  Burden of Disease Unit.  2008.  Every death counts:  saving the lives of mothers, babies and children in South Africa – data supplement.  Cape Town:  Medical Research Council.  (Click on the link to read this easy-to-understand policy brief or click here to read the academic article that was published in The Lancet.)

2.  National Department of Health.  2011.  Human Resources For Health South Africa.  HRH Strategy for the Health Sector 2012/13-2016/17.  Pretoria:  National Department of Health.

NHI Snippets (1): Where do I start?

National Health Insurance in South Africa:  Where do I start? 

“Start with something sensational,” said a friend, “otherwise no-one will read your blog.” 

The trouble is, though, that National Health Insurance is a complex concept.  It’s hard to explain and it’s hard to tease out all the arguments underlying the way it has been conceptualised. 

So I think this blog needs an audience that is willing to put an effort into understanding NHI, whether or not I write sensationally.  Let me put my faith in you …


To start, then, I think there are two basic facts about the South African health system that we need to know to gain some perspective on the NHI debate:

Fact 1: 

South Africa channels as much money through medical schemes as it gives in taxes to health care services.1  There is no other country in the world that relies to such an extent on private health insurance.2 

Fact 2:

The health of the average South African is poor relative to the wealth of the country.  South Africa is an outlier on graphs that compare the health indicators of countries against their GDP per capita.3

The poor performance of both the public and private health care sectors lies behind these two facts.  It is this that has driven the development of the NHI proposal.


P.S.  Don’t worry if you don’t understand the term ‘National Health Insurance’ or what the South African government is currently proposing.  I will deal with this in later posts.




1.  McIntyre DE, Doherty JE, Ataguba JE. (forthcoming). Health care financing and expenditure – progress since 1994 and remaining challenges. Health and health care in South Africa (2nd edition). Van Rensburg H. Pretoria: van Schaik Publishers.

2.  Drechsler D, Jutting J. (2005). Is there a role for private health insurance in developing countries?  Berlin:  German Institute for Economic Research.

3.  Langenbrunner J. (2011).  Presentation to National Health Insurance Conference:  Lessons for South Africa, 7-8 December 2011,  Gallagher Estate, Midrand, South Africa

NHI Snippets: Introduction

A Happy New Year to you all!

2012 is an important year for the South African health system as it will see the first steps in the implementation of the government’s National Health Insurance proposal.  These first steps include pilot sites to develop the design of NHI and test its feasibility.

NHI has the potential to reform the health system in fundamental ways.  It is also a complex reform that requires sustained effort, skill and ingenuity.

Why is NHI being proposed for South Africa?  Is NHI the best solution to South Africa’s health problems?  What design features or processes would make NHI work well?

South Africans need to debate these and other questions in order to ensure the best health outcomes for our country.  I would like to contribute to this debate by making available research evidence – from South Africa and elsewhere – that is in an easy-to-understand format and focussed on clarifying the debate. 

So I am starting a new series of blog posts under the heading ‘NHI Snippets.’  I will write a new ‘Snippet’ every Sunday, beginning with the concept of ‘universal health care coverage.’  I hope that with time some of you will respond to these ‘Snippets’ with information and ideas of your own.

My blog will NOT promote a specific policy or seek to answer all possible questions.