South Africa is no stranger to having foreign models of governance thrust onto it without any consideration of its unique circumstances.

Among the cut-and-paste models of policy and governance from abroad to have been given a whirl of South African failure are the Japanese concept of Outcomes-Based Education, the Colombian Bus Rapid Transit public transportation system, and even – despite its failure in settings as diverse as Malaysia, the United States and India ­– affirmative action. One cannot put a square peg into a round hole.

Yet, trying to get a square peg into a round hole is exactly what the government is attempting to do with the implementation of the National Health Insurance (NHI) scheme.

Of course, it would be ideal if South Africa could provide quality healthcare for all who live here, but the proposed NHI solution of effectively nationalising healthcare and insurance would result in worse health outcomes for all. It would also likely mean worse employment prospects for doctors and healthcare professionals.


Media reports indicate that newly graduated doctors in South Africa are sitting idle because there are no jobs for them. This is, simply put, a travesty. If NHI were to be implemented this number would increase.

Seeing that NHI aims to pool all funds into one gargantuan fund this will mean that doctors will effectively have only one entry point into the medical sector. Given what we know about how poorly-managed government entities and funds generally are, nobody should imagine that the NHI will be managed any better.

Even without factoring in corruption, the South African government has a record of being inefficient and wasteful in spending money compared to the private sector. In an upcoming paper on South Africa’s public finances, the Institute of Race Relations (IRR) shows that government expenditure has risen tremendously relative to GDP, despite service delivery getting worse. As the law of diminishing returns would have it, as the government expands in size, eventually it reaches a point where overcrowding diminishes the quality of its services. This decline eventually leads to regression, as can be seen in Eskom and Transnet, which are becoming great burdens on the state.

The government is long past the point of being productive and of adding value to the economy, and merely channelling more resources to a bloated state only makes matters worse. Signing the NHI bill into law will lead to a world-class, competitive health insurance sector being slaughtered at the altar of wasteful expenditure. Coupled with taxpayer abuse and government inertia, there is little doubt that the NHI will suffer a similar fate to the rest of the state entities that have buckled under these pressures.

BEE premium

When it comes to NHI, the issues of the Black Economic Empowerment (BEE) premium and corruption cannot be ignored and must be accounted for. The NHI will encounter the BEE-imposed conflict between value-for-money procurement and diversity, as well as the premium paid for this diversity. If diversity wins ­– which, as both Judge Raymond Zondo and the IRR note, it usually does – it will be at higher stakes than usual, because this time it will be at the cost of access to quality healthcare.

It will also be at the expense of doctors and all other medical professionals who will have to settle for less pay, since the cost of a government-administered national health insurance will eat into salaries and costs associated with quality healthcare, from medical procedures to equipment to medication.

More doctors would be put out of work if South Africa implemented this colossal universal health coverage system, which would spend more than the private sector for the same, or lower-quality, services. Add to that the BEE premium on the supply of goods and services, and the force of diversity over value-for-money procurement and what you ultimately have is a cancerous system for which no radiation treatment or chemotherapy could offer a cure.

South African healthcare needs reforming, but the NHI is not the way to do it. The government should rather look to slashing bureaucracy in the health sector to enable transparency, ease of entry into the market, and more competition. This would grow the healthcare industry, create more jobs, and enrich the economy, with more opportunities arising from the health sector.

Signing off on the NHI Bill will add yet another life-threatening condition to the government’s already long list of chronic maladies and disorders, only this time it will be at the expense of people’s lives, and the livelihoods of doctors and healthcare practitioners who try their best to keep us alive.

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Makone Maja is Campaign Manager at the Institute of Race Relations, and a former political analyst at the Centre for Risk Analysis. She is partial to topics in comparative politics and political economy.