South Africa's bold new proposal for universal health coverage in the face of stiff opposition from private health care providers is likely to become a model for providing sustainable health care for much of the developing world. The proposal, called National Health Insurance, or NHI for short, has set off quite a debate within South African society. But health care experts believe it’s the first real step in post-apartheid South Africa towards bringing equity in health care.

"South Africa has a deeply divided health system," said a recent report of the non-profit group Global Health Watch, going on to list the proposed reform's main goals: "To begin by rebuilding the public health system, with a particular emphasis on primary healthcare; to increase management authority in public hospitals and districts, accompanied by improved governance and accountability mechanisms; to increase tax funding for health services; and to introduce an NHI Fund as a strategic or active purchaser of services at a later stage. These reforms have the potential to move South Africa towards a universal health system,”

While India is yet to roll out the ambitious, but thus far vague, National Health Assurance Mission, South Africa is going ahead with a plan to increase taxes to pay for a government-run health scheme that will combat escalating private healthcare costs in the country. National Health Insurance was nominally launched in 2014, in one of 11 under-served districts across South Africa.

While the pilot has had far-reaching impact on health care delivery, the question of most minds in South Africa is where will the money come for a wide scale increase?

On this front, the South African government is committed to boldly going where most governments fear to tread – an increase in taxes. In an exclusive interview, South African health minister Aaron Motsoaledi staunchly defended increasing taxes to fund free point-of-care delivery of services.

“I understand why people ask about money for NHI,” he said. "Governments all over the world earn money from tax payers – that’s how governments run. That is how health and education are funded, through taxation. There’s no other way that governments get money except through taxation."

The clear structure of the programme is yet to be adecided, he added. “I don’t determine taxes. That’s determined by the minister of treasury. We have a new committee that will soon come up with a new tax regime for South Africa. So the new committee will address this question as well,” Motsoaledi said.

Universal health care

Currently, 83% of the South African population is heavily dependent on tax-funded public-sector services, particularly for specialist care, according to the Global Health Watch report. The other 17% of the population, comprising the richest groups, have private health insurance, MedicAid, and use privately run hospitals.

The debate is being keenly followed in India, which is looking at methods to fund the Modi government's ambitious National Health Assurance Mission. “The issue of the elite not trusting state-provided or state-supported care over private insurance is almost universal,” said Dr Amit Sengupta, public health expert with Jan Swasthya Abhiyan, Indian chapter of the People's Health Movement.

“This is the main debate and concerns mainly tertiary care in many Latin American countries, including Brazil,” Sengupta explained. "This is also a consequence of segmentation of care ‒ public-sector and government hospitals are poorly resourced, while the rich have access to better care by way of the private sector."

"Invariably, the middle class and elite migrate out from the public sector, and the latter then loses what is potentially the most vocal advocate for change in favour of the public," he said. "In contrast, in the UK, for example, because there was minimal segmentation, the middle classes continue to defend the [public] NHS [National Health Service] as they have a stake in its survival and strengthening."

Funding questions

Sure enough, many in South Africa are concerned about the proposed changes. Robert Westhill, a successful entrepreneur in Cape Town who pays approximately $500 for health insurance per year, is worried that the new scheme will limit the quality of health care he receives.

“We already pay some of the highest health insurance rates in the world, but at least we know we have access to quality care.," he said. "With this new scheme, I worry that the government will not only increase my taxes, but also dictate what kind of health care I receive. It’s no secret that the government hospitals in this country are a mess, and as long as I can afford private care, I would much rather have that".

Like Westhill, others are also worried that a health insurance model based on the United Kingdom’s National Health Service will place a disproportional burden on the small taxpayer. According to the South African Revenue Service, 3.3 million of the country's citizens pay 99% of the tax in a country of 53 million people.

“Like with NHS, taxes will become very high, and a small section of us will have to bear the burden and also come to terms with a drop in the quality of health care. Doesn’t seem very fair, does it?” said Westhill.

In South Africa, funding for public-sector health services declined in the mid-1990s, around the time the HIV epidemic was exploding, thus placing a growing burden on the under-resourced public health system. Much like India, in government run hospitals in South Africa, there is no fee for care at public primary-level facilities and minimal user fees are charged at public hospitals.

India vs South Africa

There are many similarities between India's ambitious plan and the proposed reforms in South Africa: to begin by strengthening the government hospitals, with a specific thrust on primary care and to increase tax funding for health services. But where the schemes differ is that the South African proposal is not an insurance scheme; it is aimed to boost public-sector hospitals by allocating resources, which allows poor, middle-class and uber-rich patients to access the same quality of care.

In India, with the budget allocation for health hovering around Rs 33,152 crore , barely enough to keep the existing schemes running, its plan has so far been a non-starter. Fourteen months since the new government took over, the vision map for the policy, budget layout and pilot programmes to roll it are yet to be made public.

Public health experts in India have consistently expressed concerns about the likelihood of the government outsourcing healthcare provisioning to the private sector, instead of taking the South African route and strengthening government hospitals.

This is the second part in a series that attempts to draw parallels between the health systems of India and South Africa, which face a similar set of challenges when it comes to expanding health programmes within budgetary constraints. Read the others stories here.

Reporting for the series is supported by a grant from the International Reporting Project.