6 February 2024

BUSA / B4SA call on President to test constitutional integrity of NHI Bill  

Johannesburg, 4 February 2024 – BUSA and B4SA call on the President to act in accordance with his commitment in late November 2023, to test the constitutionality of the NHI Bill.

Given its numerous substantive and procedural constitutional flaws, the business groups believe the President should refer the Bill back to parliament for reconsideration and amendment prior to him signing it into law.

Cas Coovadia, CEO of BUSA says: “Following the adoption of the Bill by Parliament in November, BUSA submitted a detailed formal petition to President Ramaphosa to send the Bill back to the National Assembly on the grounds of unconstitutionality. We hope that the President considers the long-term impact and risks of assenting to a Bill that so clearly flouts the Constitution.”

BUSA and B4SA have consistently supported the policy direction towards universal health coverage, but have reservations about the NHI Bill’s design and implementation. Their inputs have been intended to remedy the constitutional, funding and practical deficiencies in the Bill in the best interests of citizens, the economy and the country.

There have been suggestions that the President only sign certain provisions of the Bill into law. However, BUSA believes that the piece-by-piece proclamation of the NHI Bill will not provide

the necessary clarity and certainty. This will hamper collaboration, impede initiatives which can put the country on a pathway to universal health coverage, as well as undermine critical investment in the healthcare sector and the economy more broadly.

“What the country needs is an NHI underpinned by the Constitution, and which is affordable and implementable. This Bill does not meet these criteria, and is not ready to be signed into law,” says Coovadia.

The business groups have consistently cautioned that the Bill, as it stands today, will materially delay access to universal health coverage, lead to disinvestment in the healthcare sector, further damage South Africa’s already fragile economy, and create significant risks for the country in terms of the availability, quality, management and governance of healthcare.

Martin Kingston, chair of the B4SA steering committee says: “We recognise that the country is in pre-election mode, and that the adoption of the NHI Bill is a cornerstone of the Government’s policy platform and its election campaign. However, the weaknesses and the material negative implications of the NHI Bill, in its current form, will have devastating consequences for the country and her people for generations to come. There is a significant obligation on the President to ensure the Bill passes constitutional muster.”

Summary of key procedural and substantive constitutional issues raised by BUSA in its petition to the President:

  1. Procedurally, BUSA noted that Parliament’s socio-economic impact assessment process was inadequate, that the Nedlac process in respect of the Bill was not followed through, that public participation inputs were not properly considered, and that multiple constructive inputs from business and other stakeholders were ignored. Parliament’s Portfolio Committee on Health also ignored an opinion by Parliamentary Legal Services, which highlighted several areas of the Bill that are unconstitutional.
  2. BUSA highlighted the fact that the process conducted by the NCOP Select Committee on Health and Social Services was rushed, inadequate in terms of its mandate, and that it failed to properly deal with reports submitted by the provinces. Importantly, the NCOP Committee failed to incorporate amendments, provincial public submissions and technical flaws noted by several provinces and even the Department of Health itself.
  3. BUSA noted that section 33 is unconstitutional in giving the Health Minister unfettered power to determine the restricted role for medical schemes, especially as this power is unnecessary for achieving the policy objectives of the Bill. This is damaging to the private health sector as a whole and there is no rational basis for this approach. BUSA noted that the single fund model (where Government will buy and pay for all healthcare services for everyone) introduces significant concentration risk and adversely impacts people’s ability to seek care in the private sector. This is also likely to result in significant strain being placed on the public sector. The amendments proposed by BUSA seek to allow for the role for medical schemes to be determined in a consultative process, in measured phases in a manner that is consistent with the policy objectives.
  4. BUSA highlighted that the procedures for accessing healthcare and appealing treatment denied by the NHI, could potentially hinder or violate the right to access health services, making them unconstitutional.
  5. The Bill provides for the adding of new taxes and altering tax policies, tasks that should be handled by the National Treasury in a Money Bill as per the Constitution. Additionally, the Bill breaches the separation of powers by giving the Minister of Health judicial discretion.
  6. BUSA also believes that the contracting provisions in Sections 11 and 26 of the Bill are unsustainable and inconsistent with the principles of value based care and strategic purchasing, which is the global trend for sustainable healthcare contracting that is patient centred. They focus on price in an unsophisticated manner which contradicts the Constitution’s criteria for lawful procurement.
  7. The roll-out envisaged in Section 57 of the Bill needs to be linked to milestones that are workable and relevant to South Africans having reasonable access to quality healthcare services, rather than dates which are arbitrary and unrealistic, and already outdated.
  8. Section 58 of the Bill introduces legislative changes that seem to take immediate effect. However, this conflicts with Sections 31 and 32 of the Bill, leading to the immediate removal of health functions from the Provinces. This affects approximately R196bn in funding from Provincial Equitable Share allocations and Conditional Additionally, the alterations to the Medical Schemes Act contradict Section 33.
  9. There are conflicts with the Competition Act and the Protection of Personal Information Act which are unnecessary to give effect to universal health care.

“All the constitutional concerns mentioned above were raised by BUSA and B4SA in its submissions, and during various engagements with relevant stakeholders and parliamentary committees. BUSA has also brought these issues to the President’s attention in its petition. This

is to ensure that, as part of due process, proper consideration is given to the fundamental procedural, and substantive constitutional flaws in the current version of the Bill.

“BUSA and B4SA are confident that, in a constitutional democracy, these views will be taken into account by the President when he assesses the constitutionality of the Bill prior to his assent,” concludes Kingston.

Ends