The ANC-led government has framed NHI as its effort to deliver ‘nationalised health care’, writes Financial Mail editor Rob Rose.

'Any version in which the private sector retains leverage would be anathema to the ANC’s ideological statists. Ideology aside, it’s the lack of funding for NHI (which will cost R400bn a year by government’s estimates, and R700bn a year by trade union Solidarity’s estimates) that may ultimately determine the fate of the plan.’

In a near-bankrupt state, asks Rose, where trade-offs have to be made, how do you create an entirely new healthcare system that will cost, at its most conservative reckoning, R400bn every year – a sizeable chunk of SA's nominal R7trn GDP?

'The unavoidable answer is higher taxes. Business for SA (B4SA) puts some scary numbers to this: to finance NHI, it would require an increase in VAT from 15% to 21%, or an increase in personal taxes of 31%, or an increase of 60% in corporate taxes. Raising more taxes from a shrinking tax base is not feasible or sustainable. Even if the R200bn could be raised, the NHI fund would only be able to provide very basic healthcare,’ Rose quotes Roseanne Harris, an actuary working for Discovery who is helping craft B4SA’s submissions, as saying.

'Also, critics ask, given the country’s experience of corruption in state funds, surely this will only get worse when you have a single state fund buying all medical services, especially one run by people appointed by politicians?'

While money – or the lack of it – may determine the fate of NHI, there’s another immense issue that could be just as destructive, writes Rose: the gulf between the promises that the governing ANC has made on NHI, and what it can deliver.

The promises made of ‘comprehensive, private sector-level unlimited care to everyone’ are wildly unrealistic, he writes.

Rose quotes experts saying trade-offs will have to be made, but the public is being told they can have a top-quality system, for free, without any sacrifices.

‘Maybe, given the lacklustre debate in Parliament about the implications, that’s because the politicians selling the dream haven’t grappled with the trade-offs. Or maybe they think that if it all goes to hell, it’ll be someone else’s problem.’

Full Financial Mail report