No more government-supplied healthcare!


POLITICIANS thrive on the routine of meddling in people’s lives. To maintain power, influence, and control, politicians do anything to disrupt the operations of the private sector or…


POLITICIANS thrive on the routine of meddling in people’s lives. To maintain power, influence, and control, politicians do anything to disrupt the operations of the private sector or the market economy. Individuals producing, buying and selling as they wish in the market, is anathema to power-hungry politicians.

This meddling by politicians comes in various forms. It could be in the form of strict government regulations in the labour market, or strict regulations imposed on businesses, or the establishment and control of state-owned companies such as banks, as well as the creation of monopolies like Eskom.

Leaving the operations of the economy in the hands of the individuals who know better about their needs and wants is against the interests of politicians. Now that leads me to the subject of South Africa’s proposed National Health Insurance (NHI).

In Parliament this week, President Cyril Ramaphosa said that his government will push ahead with the NHI, South Africa’s own version of universal healthcare proposed by the African National Congress (ANC) government. Ramaphosa says that the objective of the NHI is to improve healthcare and reduce inequality in South Africa.

I think NHI will be one of the most inefficient, expensive, corrupt government programs in the country.  South Africans must not be manipulated, there’s nothing better about universal healthcare.   Maintaining universal healthcare becomes a huge cost, and that cost is not worth it. If you want to see how expensive universal healthcare is, check the countries that have it around the world, taxpayers pay a lot of money in those countries.

We already do have government healthcare in South Africa and it’s a disaster, with the overcrowding and a hospital system that is in a deplorable state. NHI will multiply these dire conditions.

The South African government must rather concentrate on fixing the existing state-owned healthcare system and encourage growth of the private sector healthcare whose operations must be driven by the fundamentals of demand and supply that determine prices.

It’s more supply of healthcare that will keep prices in control, while ensuring the provision of high-quality healthcare. There must always be competition between government healthcare and private healthcare, such competition is healthy.

Of course, every South African should have access to quality health care. At least that must be the goal of policymakers. But NHI is not the way to go.

To reduce costs, government policies that raise production costs must be repealed. These policies can be the form of regulations that are costly, and rising taxes as well.

It is mind-boggling that with all the mess that has been caused by the government in nationalised institutions, some people still think that the very government will now provide improved universal healthcare to South Africans.

One of South Africa’s renowned public policy experts, Dr. Anthea Jeffrey, has argued that NHI will devastate private healthcare.

In June 2021, Anthea wrote that NHI will require “a plethora of new or expanded bureaucratic entities beginning with the NHI Fund and its nine sub-units and extending to many other structures”. The NHI program will be an opportunity for theft by the corrupt elite.

It is a shame that something as critical as healthcare will be in the hands of the political elite whose daily mission is to ensure that they secure votes in the next election.

Anthea has also argued that spending on public health care has risen over the past two decades.  The number of GPs in the public sector also shot up, doubling between 2002 and 2020. The number of specialists went up too.

Yet, despite this increase in resources, the outcomes remain poor in South Africa’s public healthcare, with lack of hygiene, shortage of medicines, and long queues for special treatments. If you rely on public healthcare as an individual, then you face a serious problem in South Africa. That’s just the reality we live in the country.

If you want to understand the shortcomings of universal healthcare, you should read a book by Sally C. Pipes of the Pacific Research Institute titled The Top Ten Myths of American Healthcare.

You will think Sally’s book is solely focused on American healthcare. No, it is not. It explores the downsides of government-controlled healthcare in various countries around the world. These are the downsides the mainstream media chooses to ignore.

It’s a fascinating book that enlightens on matters of healthcare around the world. About this book, economist Thomas Sowell said that it can “literally be a lifesaver”.

Thomas Sowell himself has written about the problems of government controls in healthcare. His book Applied Economics – Thinking Beyond Stage One, explains in detail the problems of socialised healthcare.

Here are two paragraphs from Sowell’s insightful book, in a chapter entitled The Economics of Medical Care:

“Those in politics or in the media who do not think beyond stage one may see in government control a means of bringing down the prices of existing medicines, without thinking through whether this will also bring down the rate of discovery of new medicines.

However, these efforts at bringing down prices through collective action are usually successful in the short run. That is because seldom is a given medicine the only one that can be used in treating a given disease, so a drug company’s ability to hold out against the Canadian or other governments is very limited, when those governments can buy someone else’s medications if they do not get the price they want from a particular pharmaceutical company. Moreover, in a country with a government-controlled comprehensive medical care system, there may be little or no market for a given medicine from the small, or non-existent, private sector.”

I consider Sowell’s analysis amongst the brilliant in the world. It’s full of logic.

My hope is that South African members of parliament will read this article before they debate the NHI bill in parliament. We have already seen the damage done by government controls in the world, and in South Africa. The NHI will hurt South Africans. Every rational, informed South African must be opposed to it. PM

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