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NHI Act – Let the litigation begin

04 June 2024 | Story Dr Larisse Prinsen | Photo Supplied

Opinion article by Dr Larisse Prinsen, Department of Public Law, Faculty of Law, University of the Free State

On 15 May 2024, the National Health Insurance (NHI) Bill was signed into law by President Ramaphosa during a public ceremony. This did not come as a surprise as Minister in the Presidency, Khumbudzo Ntshavheni, had already stated in January that enactment would take place before the 2024 elections. Universal access to health care is an ANC promise, after all, which has led to some calling this public display – as well as the remarks made before the signing – electioneering, considering the closeness of the election to be held at the end of the month.

Now that the Bill has become an Act, however, its actual real-life implementation may be stalled for some time. As the President himself stated during the signing ceremony, the Act is to be implemented in stages. This could potentially take many years if the example of the previous, pivotal piece of health-related legislation, the National Health Act – which took more than a decade to become fully operational – is anything to go by. Each stage of implementation will also bring the potential for a slew of unique legal challenges for the Act and its implementation.

Legislation that could combat the implementation of the NHI Act

There is also the issue of the missing money bill. An Act such as the NHI Act, which has massive financial and economic ramifications, should be accompanied by a money bill drafted by the National Treasury, setting out the financial aspects of the primary Act. So far, no money bill has been drafted, which pauses the implementation of the NHI Act. Should the implementation of the NHI proceed without clarification of the rand-and-cent aspects, legal challenges may be brought.

Further pieces of legislation that could possibly be used to combat the implementation of the NHI Act include the Consumer Protection Act, which aims to establish and protect consumer rights, such as the right to quality goods and services and to select the supplier of your choice; the Competition Act, which fights against restrictive practices and the abuse of a dominant position; or the Protection of Personal Information Act, which may have implications for the large gathering of personal information that will be necessary for the NHI system to be workable. Another notable piece of legislation to consider is the Promotion of Administrative Justice Act.

Various constitutional challenges

Various constitutional challenges are also rumoured to be in the pipeline, with Solidarity, the Democratic Alliance, the Health Funders Association, the South African Medical Association, the Board of Healthcare Funders, the South African Health Professionals Collaboration, as well as Business Unity South Africa all having previously suggested that they may consider, or outright declaring that they will take legal action against the Act as soon as Ramaphosa’s ‘special pen’ touches paper.

The NHI Act may be constitutionally challenged on various grounds. To start with, there are concerns regarding the rule of law’s requirement that the law be clear, unambiguous, and not vague. The lack of clarity on the benefits and cover provided by the NHI scheme has raised many issues. Not only is the ‘what will be covered?’ but also the ‘who will be covered?’ unclear. This not only constitutes legislative vagueness, but this uncertainty also makes it almost impossible to apply our system of checks and balances whereby a determination may be made whether the State is truly adhering to its mandate in Section 27 of the Constitution to take progressive steps to realise the rights enshrined in the Bill of Rights. Litigation may also be instituted based on arguments that Section 33 of the NHI Act, which may lead to the demise of medical aid schemes, is unconstitutional and that it limits the constitutional provision of access to health-care services. In terms of the limitation clause of the Constitution, a limitation is only justified when, among other requirements, there are no less restrictive measures by which the purpose of the limitation may be achieved. Challenges could also be brought against the NHI Act based on nonadherence to requirements of procedural fairness and the principles of participatory democracy, as the consultation processes preceding the enactment have largely been labelled as mere lip service to consultation requirements without having seriously considered the various concerns, objections, submissions, and comments, and even blatantly dismissing them. Other possible causes of action are related to the infringement of the right to autonomy, privacy, association, freedom of expression, as well as freedom of trade, occupation, and profession.

Law and health care intersect

As the ink dries on the NHI Act, the stage is set for many legal dramas to unfold, indicating that the Act’s destiny will be decided by a gavel rather than a pen. While the ceremonial signing marked a historical milestone in the attempt to promote equality in South Africa, the road to implementation is fraught with challenges. With no accompanying money bill in sight and a landscape ripe for constitutional scrutiny, the Act's journey forward is likely to be tumultuous. As stakeholders gear up to challenge its provisions on various fronts – from procedural fairness to constitutional rights – the NHI Act is poised to become a battleground where the nuances of law and health care intersect. As the curtains rise on this legal saga, the true test of the Act's viability and constitutionality awaits.

More institutional experts can be found at: https://www.ufs.ac.za/media/leading-researchers

News Archive

Inaugural lecture: Prof. Phillipe Burger

2007-11-26

Attending the lecture were, from the left: Prof. Tienie Crous (Dean of the Faculty of Economic and Management Sciences at the UFS), Prof. Phillipe Burger (Departmental Chairperson of the Department of Economics at the UFS), and Prof. Frederick Fourie (Rector and Vice-Chancellor of the UFS).
Photo: Stephen Collet

A summary of an inaugural lecture presented by Prof. Phillipe Burger on the topic: “The ups and downs of the South African Economy: Rough seas or smooth sailing?”

South African business cycle shows reduction in volatility

Better monetary policy and improvements in the financial sector that place less liquidity constraints on individuals is one of the main reasons for the reduction in the volatility of the South African economy. The improvement in access to the financial sector also enables individuals to manage their debt better.

These are some of the findings in an analysis on the volatility of the South African business cycle done by Prof. Philippe Burger, Departmental Chairperson of the University of the Free State’s (UFS) Department of Economics.

Prof. Burger delivered his inaugural lecture last night (22 November 2007) on the Main Campus in Bloemfontein on the topic “The ups and downs of the South African Economy: Rough seas or smooth sailing?”

In his lecture, Prof. Burger emphasised a few key aspects of the South African business cycle and indicated how it changed during the periods 1960-1976, 1976-1994 en 1994-2006.

With the Gross Domestic Product (GDP) as an indicator of the business cycle, the analysis identified the variables that showed the highest correlation with the GDP. During the periods 1976-1994 and 1994-2006, these included durable consumption, manufacturing investment, private sector investment, as well as investment in machinery and non-residential buildings. Other variables that also show a high correlation with the GDP are imports, non-durable consumption, investment in the financial services sector, investment by general government, as well as investment in residential buildings.

Prof. Burger’s analysis also shows that changes in durable consumption, investment in the manufacturing sector, investment in the private sector, as well as investment in non-residential buildings preceded changes in the GDP. If changes in a variable such as durable consumption precede changes in the GDP, it is an indication that durable consumption is one of the drivers of the business cycle. The up or down swing of durable consumption may, in other words, just as well contribute to an up or down swing in the business cycle.

A surprising finding of the analysis is the particularly strong role durable consumption has played in the business cycle since 1994. This finding is especially surprising due to the fact that durable consumption only constitutes about 12% of the total household consumption.

A further surprising finding is the particularly small role exports have been playing since 1960 as a driver of the business cycle. In South Africa it is still generally accepted that exports are one of the most important drivers of the business cycle. It is generally accepted that, should the business cycles of South Africa’s most important trade partners show an upward phase; these partners will purchase more from South Africa. This increase in exports will contribute to the South African economy moving upward. Prof. Burger’s analyses shows, however, that exports have generally never fulfil this role.

Over and above the identification of the drivers of the South African business cycle, Prof. Burger’s analysis also investigated the volatility of the business cycle.

When the periods 1976-1994 and 1994-2006 are compared, the analysis shows that the volatility of the business cycle has reduced since 1994 with more than half. The reduction in volatility can be traced to the reduction in the volatility of household consumption (especially durables and services), as well as a reduction in the volatility of investment in machinery, non-residential buildings and transport equipment. The last three coincide with the general reduction in the volatility of investment in the manufacturing sector. Investment in sectors such as electricity and transport (not to be confused with investment in transport equipment by various sectors) which are strongly dominated by the government, did not contribute to the decrease in volatility.

In his analysis, Prof. Burger supplies reasons for the reduction in volatility. One of the explanations is the reduction in the shocks affecting the economy – especially in the South African context. Another explanation is the application of an improved monetary policy by the South African Reserve Bank since the mid 1990’s. A third explanation is the better access to liquidity and credit since the mid 1990’s, which enables the better management of household finance and the absorption of financial shocks.

A further reason which contributed to the reduction in volatility in countries such as the United States of America’s business cycle is better inventory management. While the volatility of inventory in South Africa has also reduced there is, according to Prof. Burger, little proof that better inventory management contributed to the reduction in volatility of the GDP.

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