Written by: Baone Twala, SECTION27. Edits by: Lynn Bust, PHM SA and Prof Louis Reynolds, PHM SA
People’s health in South Africa is in the midst of a severe crisis, with a high burden of disease, and
fragmented and dysfunctional health services. We are re-igniting our Critical Health Perspectives
(CHP) series with a fresh face. Our first focus is on the health system transformation we would like to
see with the implementation of National Health Insurance (NHI) currently under way. Our first issue
gave a brief history and basic introduction to the NHI process. The second issue looked at financing
of NHI and involvement of the private sector. This, the third NHI unpacks governance in relation to
NHI and the policy process. First, it unpacks the meaning of governance and accountability, then un-
packs current governance in the public health system, and finally explores the current governance in
the current NHI Bill and how this relates to both participation and financing of NHI.
WHAT ARE GOVERNANCE AND ACCOUNTABILITY, AND WHY ARE THEY IMPORTANT?
HOW IS THE GOVERNANCE IN THE PUBLIC HEALTH SYSTEM CURRENTLY STRUCTURED?
DOES THE CURRENT NHI BILL GUARANTEE GOOD GOVERNANCE?
HOW WILL FUNDS BE ALLOCATED UNDER THE NHI?
Critical Health Perspectives (CHP), published by the People’s Health Movement-South Africa (PHM-SA), are short editions critically analysing the health system of South Africa. They aim to take a deeper dive into some of the health problems we currently face, scrutinising their root causes and discussing potential solutions to these complex issues. Originally started in 2005, CHPs are written by activists, academics, and experts in their field to spark debate on the most pressing issues in health today. The views expressed here do not necessarily reflect the view of all those who have identified with PHM-SA.
South Africa’s public health system is in desperate need of reform. It is plagued by poor service
delivery and the inability to meet the need for public sector health services.
The proposed National Health Insurance (NHI), laid out in the NHI Bill, is touted to resolve these problems by establishing an NHI Fund as the basis of a new public health care financing system. However, the current proposal overlooks lessons from the shortcomings of the present system, notably the critical importance of good governance and accountability to the efficiency and effective-
ness of public health systems. It lacks effective measures to ensure transparency, accountability and meaningful community participation.
In this article, we outline governance and accountability and their importance in public health care delivery and the eventual goal of universal health care. We then describe how they go wrong in the current health system and the shortcomings in governance and accountability in the current NHI proposal. Finally, we make recommendations for how NHI can incorporate governance and accountability mechanisms and how to achieve true public health reform effectively.
What are governance and accountability,
and why are they important?
Governance is a critical element in effective public health systems. It includes tangible and intangible
factors such as regulatory and managerial systems, strategy and goal setting, and key values such
as equity and transparency. Good governance is a constitutional imperative — it is required from all
organs of state. Accountability facilitates good governance.  Accountability means holding public
officials, individuals and organisations charged with a public mandate accountable to the public for
their actions and decisions in their public roles.  Accountability requires performance criteria for
public officials and “oversight mechanisms that ensure that standards are met”.
Good governance systems and accountability mechanisms require implementation to be effective.
The problems with the current health system show that this is easier said than done.
However, there are some excellent examples of how good governance may be incorporated
into a system and its benefits, particularly when seeking to provide universal health coverage.
The proposed NHI should correct the failings and improve on the stronger elements of the
current governance system, while adopting an overall reformative approach. However,
the proposed NHI Bill adopts a “system reset” approach without recognising the importance of solid and
clear provisions on governance. This does not bode well for the success of NHI.
Universal health coverage systems require principles of good governance, such as transparency and participation.
Participation implies meaningful involvement in the law-making process. Participatory governance seeks
to go beyond “information sharing” to “create relationships based as much or more on trust and reciprocity
than advocacy, strategic behaviour, and deceit”. [2, p.458] Participatory governance,,
therefore, requires “the development of a wide and transparent exchange of knowledge and information,
the establishment of collaborative partnerships, an emphasis on inter-institutional dialogue, and greater
accountability”. [2, p.458] Participatory governance requires the provision of the means
People’s Health Movement – Critical Health Perspectives 2022#3 – December 2023
necessary to engage individuals and organisations outside government through political
networks as well as institutional arrangements that facilitate supportive collaborative-based
discursive relationships among public and private sectors. Participatory governance is effective
when it is legislated into universal health coverage provisions in addition to public participation in
the law-making process.  Participatory governance is directly linked to successful health governance in
health systems seeking to achieve universal health care. Effective public participation
increases the responsiveness of the system; this would contribute to building public trust in the NHI
Does the current NHI Bill
guarantee good governance?
The NHI Bill is a critical part of the attainment of universal health coverage as it is the enabling
legislation for the NHI in the same way the NHA is the enabling legislation for health in South Africa.
Although government’s attempt to achieve universal health coverage in South Africa is laudable, the
provisions of the Bill raise serious concerns that must be addressed if NHI is to succeed.
Provisions in the NHI Bill relating to the governance structure of the NHI governing bodies do
not reflect principles of good governance, specifically: independence, participation, transparency,
universality, and a holistic approach to revolutionising an entire public health system.
Generally, the main issues reflect in the centralised nature of the governance structure.
The governance structure of the NHI will comprise the NHI Fund Board,
Benefits Committee, Pricing Committee and the Stakeholder’s Committee. The Minister will
appoint the ad hoc committee that shortlists candidates for the Board, and then will appoint the
Board members, the Board Chairperson, and the NHI Fund CEO, as well as the members of the
Essentially, the Minister is overly involved in and has massive decision-making power in the
operations of the NHI Fund Board (the Board). Boards’ serve a stewardship function where they oversee
management and ensure an institution’s affairs are conducted in a way that achieves the institution’s objectives.
 The Minister’s power over the Board disrupts the Board’s oversight and operational functions, and creates an
imbalance in the Board as an accountability body. These concerns may be remedied by adding measures to the NHI Bill
to grant the Board independence from the Minister. The Bill only specifies the Minister’s role in the appointments and
removal of Board members and the CEO, and the committees. The current public health system shows the negative impacts of
the overlap between administrative and political roles. The Board’s independence is crucial to build public trust in the Board and the efficacy of the NHI.
Specifying the principles for Board appointments and the composition of the ad hoc committee will contribute more transparency in the process for the appointments to the Board. Appointment of board members must be based on the principles] of transparency and openness, public participation in the nomination process and publication of shortlisted candidates. The appointment criteria must specify that the Fund’s Board has the right balance of knowledge, skills, and experience; and inculcate honesty, integrity and expertise as a requisite for the appointees.
For the NHI to successfully contribute to the effective provision of universal healthcare, it must allow
for community and Civil Society Organisation (CSO) inclusion and participation. CSO participation
is more than tick box representation exercise or participation in the legislative process. It requires a
recognition of the value of the contributions from people that use the system to improve or maintain
good governance. Participation is not just for the benefit of the participants, it benefits governance
bodies and structures so that they are able to actually serve communities and meet their needs.
Currently, the NHA provides for community participation in the governance of primary care facilities
through clinic committees. However, their regulation and functions depend on the MEC and there-
fore, clinic committees differ between provinces. “Only four provinces (Kwa-Zulu Natal, the Eastern
Cape, the Western Cape and the Free State) have passed provincial legislation or have adopted
policies on the regulation of these committees, but not all these documents deal with the powers and
responsibilities of the structures.” 
Consequently, clinic committees fail to fulfil their purpose and community issues in primary healthcare facilities
are rarely addressed. Clinic committees show the impact of poor regulation for community participation in
governance structures and the negative consequences. The NHI provides for the Stakeholders Advisory Committee,
which is the only place for CSO and health service users, but it has no clear function and is not designated as an
advisory committee of the Fund, in spite of its name. Real and meaningful participation of civil society and health service users is not,
therefore, provided for, contrary to accepted practice around universal health coverage.
There is an opportunity to improve community participation under the NHI and adopt a participative governance approaches.
Evidence shows that participatory governance has a positive impact on improving health systems working toward universal health coverage.  This form of participative governance allows for population participation in health policy-making and decision-making. [6, p.1] Thailand’s National Health Assembly serves as a vehicle for participative governance. It brings together “government technocrats, policy-makers and politicians; civil society, communities, and the population; and academia, think tanks, and research institutions” on “critical
policy issues to achieve progress and reform has benefited from incorporating stakeholders with various perspectives to foster mutual understanding among health stakeholders”. [6, p.2]
The Stakeholder Advisory Committee provides an opportunity to improve and facilitate NHI’s participatory governance. This committee has the potential to contribute invaluable evidence and expertise needed for the implementation of the NHI (including such evidence collected through the Ritshidze Project, described at the beginning of this submission, for example). [9, p.20]. In their submissions to Parliament on the NHI Bill, SECTION27 and TAC recommend that the Stakeholder Advisory Committee be recognized as an advisory committee to the fund and thus be able to advise the Benefits Advisory Committee on issues relating to availability and suitability of health care services; and the Health Care Benefits Pricing Committee on the affordability of health care services.
[9, p.20]. The NHI Bill can strengthen the participatory governance by providing for community and civil society participation
at the district level which is currently not provided for. But there are mechanisms provided for in the NHA which can be used to
improve district level participatory governance in the era of the NHI. District Health Councils can be amended to require five
health users as members.
People’s Health Movement – Critical Health Perspectives 2022#3 – December 20226
How will funds be allocated
under the NHI?
SA’s current inequitable system epitomises the Inverse Care Law which states that “the availability
of good medical care tends to vary inversely with the need for it in the population served”.  The
inverse care law is inappropriate for the South African context and is, together with financing the
NHI, in greater detail in the second issue of Critical Health Perspectives.  This section outlines the
movement of funds through the various government departments currently vs the NHI.
Most of the national health budget is distributed to provincial departments through transfers
in the form of the provincial equitable share and conditional grants. Provincial departments are
funded through transfers from National Treasury and each provinces’ own revenue. The budget
is allocated based on the size, needs and demographics of each province.
Provinces then distribute the funding to the district level.
The management and allocation of these funds varies greatly. Provinces struggle with
underspending their allocated budgets while failing to adequately meet service delivery needs.
Underspending allocated budget spend leads to decreased budget allocation and contributes to a
cycle of decreasing allocation for health funding. Persistent decreases in the budget allocation for
health is worsened and perpetuated by National Treasury and government’s austerity measures.
Austerity measures cause reductions on social spending needed to fulfil socio-economic rights.
 Therefore, sound financial management will be critical for successful implementation of NHI.
Under the NHI, the intention is that all health funding (including what is currently paid to medical schemes
and as out of pocket expenditure) will be directed to the NHI Fund. In anticipation of NHI, some programmatic
funding will be consolidated under NHI, as will some or all provincial equitable share funding. This consolidation has
already begun. In the 2022 National Budget, mental health and oncology programmatic funding has been consolidated under the NHI.
The transfer of the mental health services and oncology services component of the District Health Programmes Grant to the National Health Insurance Grant results in a R299 million increase in the NHI programme. The budget states that R2.1 billion of the direct NHI budget has been allocated to provinces for the combined contracting of primary healthcare doctors, mental health and oncology service providers.
The budget review notes that mental health and oncology services “will not be standalone components, but will be part of the
activities that are funded by the grant”. 
However, this consolidation misses a step – government austerity and cuts in social protection.
In 2022, cuts to health spending comprised the majority of 80% of budget cuts in the national budget.
NHI funding will have to be part of a holistic solution toward financial reforms that move away from austerity.
Government must recognise that social spending is an investment and budget for it accordingly. NHI funding will be
more complicated than shifting spending from private to public healthcare, particularly considering new structures required for NHI,
including over 300 Contracting Units for Primary Care and 52 District Health Management Offices.  Shifting insufficient health budget
NHI will translate to insufficient funding and will require a review of government’s current austerity approach.
Experience shows that there is opportunity for looting and corruption within NHI, so the NHI Fun should
incorporate transparency into its model and provide regular information on the fund to the public.
As a form of achieving universal health coverage through instituting a new public health funding
model, NHI will not exist in a vacuum. The NHI will inherit a healthy system in need of reform
and which provides lessons for strengthening NHI. The success of NHI will rely on strong good
governance principles that provide for the independence of the Board, and health users, CSO
and community participation. Systemic health reform is required for the NHI to be effective,
particularly addressing and correcting issues with political and administrative overlap and
addressing persistent budget cuts to health, that cannot easily be made up for. The NHI Bill must
consider lessons from the current health system and good practice on universal health coverage.
Addressing the shortcomings in the NHI Bill will directly affect heath care users and contribute
to achieving equality in access to medical health care services
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9. SECTION27 Submissions
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13. Budget Review 2022 and see, SECTION27 2022 Budget fails to equip basic education or health sectors for post pandemic recovery