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15 May 2009

Mantashe raises 'unhealthy' expectations

The health-care industry is sceptical about the statement by Mr Gwede Mantashe, secretary general of the ANC, that SA should have a national health insurance scheme within a year.

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The health-care industry is sceptical about the statement by Mr Gwede Mantashe, secretary general of the ANC, that South Africa should have a national health insurance scheme (NHIS) within a year.

In its view it would take much longer to implement an effective NHIS.

However, at a Numsa conference yesterday Mantashe said that an NHIS had to be implemented within the next year, and expanded over the next five years.

Extensive research needed
There are no documents on an NHIS model in South Africa, and role players in the industry believe extensive research in the South African context is still required.

Furthermore, the existing tax system will have to be changed and all state health facilities will need to be upgraded.

Dr Jonathan Broomberg, head of strategic and risk management at Discovery Health, says it is very difficult to express an informed opinion on the possible NHIS.

“There are no official documents for the establishment of such a system in South Africa. Any reform of this magnitude will be extremely complex.

“It would take a long time to do it properly."

One year too soon
According to Mr Mike Schüssler, economist of Economists.co.za, one year is far too soon. “We already have a high tax rate. If it is raised further, it would make it very difficult for companies to show a profit. Welfare expenditure would in all likelihood have to be cut, as one cannot simply increase the taxpayer's burden. It could become problematic.”

According to analysts, the drop in life insurers' share prices on the JSE yesterday was not fuelled by Mantashe's statement.

The share prices of insurers involved in the health-care industry fell yesterday. Discovery Holdings closed 3,9% down at R25,85, Sanlam was down 3,28% and closed at R17,10, and Old Mutual dropped by 7,02% to R8,35.

Mr Alwyn van der Merwe, investment director of Sanlam Private Investments, says the market was generally weak. “It (Mr Mantashe's statement) could have played a role, but the market declined as a whole.”

(Letitia Watson, Sake Rapport, May 2009)

 
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