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).