1.

Introduction
In South Africa, public and private health systems exist alongside each other. The public
health care system provides services to the majority of the population, but is terribly
underfunded and understaffed. Those who belong in the category of the wealthiest in the
country use the private system and receive much better services. Most of the countries
doctors work in private sector due to the amount of hours they have to work and having to
take home salary-cuts also due to lack of funding. On introducing the National Insurance
Fund (NHIF) and government gearing towards nationalising healthcare in the country, the
way forward seems promising, especially for the poor. The Privatisation of healthcare has its
roots before the apartheid era and usually only serviced those who were wealthy. Since we
are a developing country even though structures of private healthcare exists like medical aid
schemes and hospital plans, citizens who enjoy these benefits pay exorbitant fees.
Considering the majority of the population who are either middle class or are in the low
income bracket, privatising healthcare would just cripple the economy. This essay will firstly
define private and public goods and services. Secondly, it will define nationalisation and
privatisation. Thirdly, it will discuss healthcare reform in South Africa. Fifthly, it will discuss
the nationalisation of healthcare services in South Africa National Health Insurance (NHI).
Sixth, it will discuss those who are in favour of the NHI. Then it will discuss privatisation as
not being an option for the healthcare structure in South Africa. Hence, I will state my
opinion based upon my research found. Lastly, it will conclude and summarise the findings
discussed within the essay.

2. Defining Private and Public Goods and Services

Consumers in todays world, have a variety of goods and services available for them to
purchase. They can purchase their basic necessities like food and clothing and at the same
time enjoy the convenience of having street lights lit at night. (Mohr & Seymor, 2012)
However, there are characteristics that differentiates the one from the other, because certain
goods and services we utilise are either purchased or provided for free of charge. For
example, purchasing goods such as dinner at a restaurant, branded clothing or medical aid
cover can be listed as a private goods and services. The reason for it being listed under a
private good and service because of the characteristic of excludability. This implies that the

customer can be excluded from utilizing these goods and services if they cannot afford it or
are not able to pay the seller for it. (Experimental Economics Centre, 2006)
Conversely, Public goods and services are the total opposite, in that everyone can benefit
from the goods and services. There is no excludability, for example, these are goods and
services like traffic lights on our roads which is utilized by all citizens in the country. No
person can be excluded from utilising this service provided for by government as it is
available to all. (Mohr & Seymor, 2012)

3. Defining Privatisation & Nationalisation

Privatisation has various definitions for different people. According to (Dupuis, 2005, p.4)
privatisation is the selling off of state-owned enterprises to the private sector. It could also
be that government sells off shares or other equity of a state-owned enterprise to private
companies, hence giving up control of that public enterprise. This is just one specific form of
privatisation, however it can take place in many ways.
On the other hand, nationalisation is where the State wants to have entire oversight over an
organisation or a property. As stated in (Dupuis, 2005, p.6) its the taking of control by the
government over assets and over a corporation, usually by acquiring the majority or the
whole stake in the corporation. The way in which this happens is either through buying
assets in the company from its legal owners, through seizing it or via appropriation.

4. Healthcare reform in South Africa

Presently there are huge gaps in the way citizens receive healthcare in South Africa. Most of
the population receive healthcare from State owned hospitals. On the other hand, a small
majority of the population have Medical-aid or belong to hospital plans. There has been much
debate on Nationalising healthcare because of huge inconsistences in the way people receive
these services amongst various racial groups. Thus, the government of South Africa has
presented the people with a creative project in financing the Healthcare of citizens. The way
the State has done this is through the National Health Insurance, the green paper launched in
the year 2011, generally called the NHI. This new policy plan will guarantee that all citizens
receive suitable, excellent and adequate healthcare services. According to (National Health

Insurance in South Africa, 2011, p. 4) the NHI is intended to bring about reform that will
improve service provision. It will promote equity and efficiency so as to ensure that all South
Africans have access to affordable, quality healthcare services regardless of their socioeconomic status. Therefore, the NHI can be classified as a public good and service, as there
is no exclusion as to whom should enjoy or benefit from this service.
However, the structure of healthcare financing in South Africa varies. Implying that, funding
for healthcare is either provided for through personal cash payments, hospital plans or
medical aid schemes. These financing agreements furnishes private clients with cover.
Healthcare options like these have either been purchased by the client themselves, who
choose the benefit plan and medical-aid scheme of their choice or it has been subsidised by
their employer, and this includes both the private sector and the State. As stated in (National
Health Insurance in South Africa, 2011, p. 4) The other portion is funded through the fiscus
and is mainly for public sector users. Lastly, only clients in the above categories can either
choose a medical-aid scheme or benefit plan of their choice from companies who provide
these services in public sector. The rest of the population who does not fall in these categories
are excluded from these services.

5. The Nationalisation of Healthcare Services in South Africa - NHI

The debates for Nationalising South Africas healthcare dates way back before apartheid,
approximately more than 70 years. This all started in the year 1941, when J. Collie issued the
first health insurance plan in the South African Medical Journal. He was the Chairperson of
the committee of Enquiry into the National Health Insurance. His policy agenda as stated in
(Politics Web, 2009) proposed a health insurance scheme that would cover people of all
races except those who lived in rural areas. The policy plan, at the time, was never carried
out as many came into opposition against the proposal. However, one sees this proposal being
introduced again in the states plan to nationalise healthcare through the NHI. The policy
intends that there be one specific fund for health insurance in South Africa. The fund then is
planned to obtain funds through the common taxes paid and also a type of subsidy from
government for health insurance. The implementation of this policy plan began in the year
2012 and was set to be carried out over a period of 14 years. (Sapa, 2010) Since then, a Plan
of Action was also implemented to help with the implementation of the policy plan.
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There has been much progress in governments plans to nationalise healthcare. As stated in
the (South African Health Review, 2012/13, p.22) the Department Of Health has had
meetings with medical scheme administrators, labour, the pharmaceutical industry,
professional

associations

for

different

occupations,

statutory

bodies,

government

departments, academia, civil society and parliament. Additionally, there has also been over
one hundred submissions to the National Department of Health and furthermore, in 2011,
specialists from various countries and organisations also conducted an International
conference proposing specific plans for national Health insurance. Lastly, the Minister of
health also conducted road shows which involved provinces where the NHI programme has
been implemented and also met with various stakeholders. All information gathered from
these meetings was to further develop the States goal towards the formation of the White
Paper for National Health Insurance which was released in August 2011. (South African
Health Review, 2012/13)

6. Those in favour of the NHI

There have been positive responses from various political parties who were in favour of the
National Health Insurance Policy. In March of 2014, the Treatment Action Campaign (TAC)
released its Peoples Health Manifesto posing a set of eleven questions to political parties
ahead of the elections at the time. There were various questions asked and one of them were,
if they supported the National Insurance Policy. In response to these questions only eight
parties responded to these questions out of the twenty that were asked. Regarding these
questions, the Democratic Alliance (DA), showed support for the policy plan. According to
(Gonzalez, 2014) they stated that DA supports the underlying principle in the National
Health Insurance (NHI) strategy that there must be better cooperation between the public and
private sectors and that partnerships between these two spheres can improve health services
for all. Including, AgangSA who approves the National Health Insurance plan, but grants
that it can only work if we have an efficient government and if specialists in healthcare
operate at all administration levels. Lastly, as stated in (Gonzalez, 2014) that It is
internationally proven that NHI takes between 40 and 60 years to develop and implement in a
country. Therefore many are not in favour of the NHI because the public health framework
4

would need to be upgraded and especially the gap between the rich and the poor before the
country can consider National Health Insurance.

7. Privatisation of South Africas Healthcare System not an alternative

Privatizing South Africas healthcare system is not an option at the present moment. Due to
the majority of the population being in the low income bracket. Thus, privatizing the
healthcare system will just cripple the economy further. The Pan Africanist movement (PAM)
does not endorse the National Insurance plan, but states in (Gonzalez, 2014) We believe that
health must be the sole responsibility of the state and that private hospitals must be
nationalised to serve the health needs of all citizens. Including the Patriotic Alliance (PA),
who also does not support the NHI programme and totally sees the implementation to fail as
it cannot better the foundations public healthcare system.

8. My opinion based on my research found

In my opinion I have opted for the Nationalisation of the public healthcare system. This
health insurance plan does seem fair to all citizens and also helps bring about the notion of
equality between the rich and the poor in the area of healthcare, since our country is a
democracy. Even though the system is optional for those in the private sector they would still
have to make a contribution to the National Health Insurance fund. Currently there are many
inconsistences and lack of funding to carry out the policy plan, but I firmly believe if
everyone works together especially the government officials in charge, and funds get used
wisely and for what it is intended this policy plan can be a success. Presently there are
citizens in various provinces with no or improper access to healthcare which is greatly
saddening, because outlined in the countrys constitution, everyone is entitled to have access
to healthcare services. Lastly, government should focus on carrying out the policy plan and
fully train the officials in charge. They should also focus on educating those involved to their
full capacity to leave no room for failure. Then our country will have great success in
transforming its healthcare system.

9. Conclusion
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Finally, Nationalisation of South Africa has begun and it is now up to the various government
departments to carry out the policy plan accordingly. This essay has firstly defined private
and public goods and services. Secondly, it has defined nationalisation and privatisation.
Thirdly, it has discussed healthcare reform in South Africa. Fifthly, it has discussed the
nationalisation of healthcare services in South Africa National Health Insurance (NHI).
Sixth, it has discussed those who are in favour of the NHI. Then, it has discussed
privatisation as not being an option for the healthcare structure in South Africa. To conclude,
I have stated my opinion based upon my research found.