The National Health Amendment Bill 2008 and governmental policy reform : how far is too far ?

The public health sector is constantly at pains to provide adequate basic healthcare in many areas of South Africa. However, despite the difficulties faced by the state in this regard and the sharp criticism levelled at it for its failure to ensure a high standard of basic public healthcare, the state has taken it upon itself to draft legislation, in the form of the National Health Amendment Bill 2008 (the Bill), enabling it to regulate the pricing of private healthcare. Has the long arm of the law perhaps stretched too far by attempting to regulate the private healthcare industry? Are these measures reasonable in the state's ongoing battle for progressive realisation of the right to healthcare? I will endeavour to answer these questions, as well as suggest possible alternatives to achieve what the Bill sets out to do. The purpose of this article is, however, not to examine the nature and extent of any possible infringements the Bill may bring about with regard to the right to access to healthcare expressly, but to examine the Bill against the pretext of governmental policy in promoting or realising this right.


INTRODUCTION
The public health sector is constantly at pains to provide adequate basic healthcare in many areas of South Africa. 1 However, despite the difficulties faced by the state in this regard and the sharp criticism levelled at it for its failure to ensure a high standard of basic public healthcare, the state has taken it upon itself to draft legislation, in the form of the National Health Amendment Bill 2008 (the Bill), 2 enabling it to regulate the pricing of private healthcare.Has the long arm of the law perhaps stretched too far by attempting to regulate the private healthcare industry?Are these measures reasonable in the state's ongoing battle for progressive realisation of the right to healthcare?I will endeavour to answer these questions, as well as suggest possible alternatives to achieve what the Bill sets out to do.The purpose of this article is, however, not to examine the nature and extent of any possible infringements the Bill may bring about with regard to the right to access to healthcare expressly, but to examine the Bill against the pretext of governmental policy in promoting or realising this right.

PLACING THE NATIONAL HEALTH AMENDMENT BILL IN CONTEXT
Private healthcare institutions are in reality nothing more than profit driven enterprises, and are duly registered as such. 3The profit motive of such private institutions can be seen as a guarantee of quality medical care.The mere fact that private hospitals function as normal businesses means that the product or services they provide should naturally be of the highest quality, so as to have an advantage over their competitors.Quality of healthcare and the price paid therefor are, therefore, big factors in this discussion.It is in fact the great divide between public and private healthcare.Quality private healthcare is expensive and available to an exclusive few in this country. 4he Bill is the latest attempt by the Department of Health to regulate the cost of healthcare in general.In April 2004 the Department of Health introduced pricing regulations in order to curb the escalating costs of pharmaceuticals. 5These regulations were met with resistance, and so in 2006 a new dispensing fee was included under the amended regulations. 6Pursuant to addressing the cost of high pharmaceuticals, the then Minister of Health, Dr M Tshabalala-Msimang, has plainly denounced the high costs associated with the private healthcare industry.Contribution rates per medical scheme beneficiary have rocketed from R3 423 in 1998 to a staggering R7 807 in 2005, 7 whilst there has also been a significant increase of 121% in expenditure on private hospitals from R8 billion in 1997 to R17,7 billion in 2006/7. 8t should be clear from the foregoing that it is becoming, or has become, increasingly difficult to belong to medical schemes.Dr. Tshabalala-Msimang, who is no stranger to controversy, has, therefore, argued, that in order to make private healthcare more accessible to the general public, there should be some form of governmental intervention in the pricing practices of private hospitals. 9This was, as expected, met with harsh resistance from private healthcare institutions, who were quick to point out that the Minister's powers were curtailed and limited only to the public health sector. 10

THE NATIONAL HEALTH AMENDMENT BILL 3.1 Objects and aims
The Bill seeks to amend the National Health Act Prescribed Minimum Benefits (PMBs). 12The objects of the Bill are, inter alia, to improve transparency in the determination of costs and prices; ensure accountability for the cost of healthcare; ensure that healthcare providers prevent unjustified cost escalations; ensure the removal of unfair, collusive and undesirable business practices; and, generally, ensure the affordability of healthcare. 13

The Facilitator for Health Pricing
The Bill empowers the Minister of Health to appoint a Facilitator for Health Pricing (the Facilitator) who will, inter alia, annually convene and chair negotiations with stakeholders in order to establish a schedule of fees; hear and resolve disputes in relation to pricing; record the schedules of fees agreed upon individually and collectively; and advise the Minister on the compilation and publication of information, reports and statistics about health pricing. 14Furthermore, the Facilitator must ensure that the negotiations are conducted in a transparent and open manner; that transparency on costs that form the basis for prices is improved; and that prices are reduced where costs have been reduced. 15Should the negotiating parties be unable to agree on a schedule of fees, the Facilitator shall refer the matter to the Health Pricing Tribunal (the Tribunal) for a final determination of the schedule of fees. 16The Facilitator is, however, subordinate to the Minister, who has been granted the power to make rules pertaining to the achievement of the objects of this Chapter. 17

Health Pricing Tribunal
The Tribunal will be established in terms of section 89F(1).Though not expressly stated in the Bill, it would seem as though the duties of the Tribunal relate to the final determination of a schedule of fees, 18 as well as any contravention of the Bill in general. 19

ANALYSIS OF THE BILL 4.1 The socio-economic framework
Section 27(1) of the Bill of Rights in the South African Constitution imposes a positive obligation on the state to implement effective strategies for the progressive realisation of so-called second generation rights, such as, the right of access to healthcare. 20Such an obligation is, however, not an unqualified one, and regard must, therefore, be had to three important elements, namely, the obligation to take reasonable legislative and other measures; to achieve the progressive realisation of the right; and to do so within available resources. 21The Constitutional Court has commented on reasonableness in respect of measures aimed at progressive realisation of a right in Government of the Repubic of South Africa and Others v Grootboom and Others 22 (Grootboom) as follows: "The precise contours and content of the measures to be adopted are primarily a matter for the Legislature and the Executive.They must, however, ensure that the measures they adopt are reasonable.In any challenge based on section 26 in which it is argued that the State has failed to meet the positive obligations imposed upon it by section 26(2), the question will be whether the legislative and other measures taken by the State are reasonable.A court considering reasonableness will not enquire whether other more desirable or favourable measures could have been adopted, or whether public money could have been better spent.The question would be whether the measures that have been adopted are reasonable.It is necessary to recognise that a wide range of possible measures could be adopted by the State to meet its obligations.Many of these would meet the requirement of reasonableness.Once it is shown that the measures do so, this requirement is met." 23d further: "The State is obliged to act to achieve the intended result, and the legislative measures will invariably have to be supported by appropriate, well-directed policies and programs implemented by the Executive.These policies and programs must be reasonable both in their conception and their implementation." 24om the aforementioned it should be clear that the concept of "reasonableness" is a changeable one, and, as such, cannot be accurately pinned down. 25In a sense this is ideal, since it allows for interpretation and application on a case by case basis, as opposed to setting a strict norm by which to abide. 26It is, however, relatively simple to be critical of such an approach.
Having governmental policy measured against a standard of reasonableness is always an ex post facto operation, and usually only ever done in the event of an aggrieved party approaching the courts for assistance. 27However, on the flip side of the coin, it leaves the government with no definite parameters within which to gauge its own measures before implementing them.The measures adopted by the state to implement the progressive realisation of a right should, inter alia, be flexible; should address short, medium and long term needs; and not exclude a significant sector of society. 28Such a plan will be deemed to be reasonable.

The good, the bad and the ugly
As mentioned before, the unchecked escalation of the cost of private healthcare is clearly an area of concern for the Department of Health.The Bill, therefore, has noble motive, in that it attempts to make private healthcare affordable to more South Africans. 29This would then, it is hoped, have a knock-on effect on the public healthcare system, as the burden placed on the state to provide healthcare may be alleviated.More lower middle class people would then be able to afford private healthcare and be able to help themselves. 30With limited state funding and the currently thinly stretched infrastructure which is also used by lower middle class people, the Bill would then be able to cater for the "poorest of the poor", who really cannot afford the luxury of private healthcare.If this was indeed the thinking behind the Bill, it should be commended, since it is no secret that the largest part of the population, around 85%, relies solely on the public healthcare system. 31However, for all its good intentions, the Bill sits uncomfortably.As mentioned earlier, 32 private healthcare institutions are in reality nothing more than private enterprises.In my view, government interference with the private sphere is bad for business, since instituting a cap on a profit driven industry has its drawbacks.A decrease in profits will, logically, significantly lower the quality of care in such private institutions, since highly skilled medical practitioners who were being paid top dollar at private institutions will probably have to be satisfied with state level salaries.This type of government interference in the private sphere has more in common with the 27 It is submitted that the Constitutional Court has its role to play in being more pro-active in the realisation of the right to social security.Mere adjudication of socio-economic policies of the government is insufficient when considering South Africa's current situation.It has been suggested by Mia Swart that a re-thinking of remedies available to the courts could be the starting point.Furthermore, the Bill ignores the principles laid down in Grootboom.As stated earlier, the measures taken by the state in achieving the progressive realisation of socio-economic rights will be judged against the standard of reasonableness. 33According to Liebenberg, a key principle which was established in Grootboom was that, for the measures to be reasonable, they must provide relief for people who are in desperate need and living in conditions of intolerable existence. 34As Liebenberg states: "The test of reasonableness will not be met if a social programme giving effect to socioeconomic rights fails to cater for people in this situation even if it is 'capable of achieving a statistical advance in the realisation of the right'." 35 is submitted that Liebenberg's view is correct.Accordingly, it can be argued that the Bill itself strives to provide access to private healthcare not to those in desperate need of social assistance, but to the lower middle class who may be able to afford it.The argument that making private healthcare more accessible to the lower middle class population will enable the state to focus more on those in desperate need is not convincing when one considers Liebenberg's contention quoted above.It is, therefore, my opinion that this Bill is not aimed at those in desperate need, and, as such, does not comply with the test for reasonableness set out in Grootboom.
Looking closer at the Bill itself, it is interesting to note section 89C(6)(viii) which states: "(6) The Minister may make rules relating to -(viii) any other matter incidental to the achievement of the objects of this chapter." 36ving the Minister such a wide discretion to exercise his or her powers is an untenable position.Such a provision would then enable the Minister to promulgate any rules, which would also usurp any ruling the Facilitator may have made regarding pricing, in order to achieve the objects of the Bill.It is my view, then, that the Bill is not reasonable in either its concept or operation.The legislature has attempted to draft a bold piece of legislation which allows for government intervention in the private sphere, giving the Minister almost unlimited power in relation to the achievement of the objects of the Bill.

Brief alternative policy proposals for the realisation of the right of access to healthcare
It goes without saying that the obligation imposed on the state to take reasonable legislative and other measures to promote the progressive realisation of socio-economic rights is a daunting one.South Africa, being a Third World country for the most part, is unique in many respects with regard to poverty, class and demographics. 37It is, therefore, understandable that the government is under immense strain to meet its positive obligations under sections 26 and 27 of the Constitution.The Bill, for the reasons set out above, does not meet the standard of reasonableness despite its prima facie good intentions.However, it appears as though the Bill is an attempt at a quick fix to alleviate the burden on public healthcare facilities, and, as such, ended up being too drastic.Dekker has addressed the issue of lightening the state's burden by suggesting the implementation of an informal social security system to supplement a formal one. 38The author suggests that mutual health insurance schemes have worked well in other developing countries, because of the fact that a formal system of social security was combined with an informal one. 39n the discussion below I suggest more alternatives for the state to consider, as opposed to the Bill in its current form.

Proper management of state funds
An increased allocation of appropriate funding by the state will allow for the availability of more resources in order to meet the constitutional obligations placed upon it.As Liebenberg states, it seems rather illogical that the state is allowed to determine the extent of its own obligations through its macroeconomic and budgetary policies. 40Viewed from this perspective, it would seem as though the enforcement of socio-economic rights would become futile since the state determines exactly how much to allocate to, for example, the health sector.Accordingly, the state is very much the architect of its own programme of progressive realisation of rights, determining the amount that should be allocated to the progressive realisation of certain rights, and, therefore, also the speed at which such progressive realisation will occur.Thus, it is proposed that the state increase the amount of money and resources available to public healthcare. 41In some instances it may be necessary to do a complete reassessment and restructuring of the budget, because it would seem that the current resources available to the public health sector are grossly insufficient. 424.3.2Job creation as a tool for the collection of state revenue and access to occupation based medical insurance A less immediate plan, but definitely one to be looked at seriously by the government as a long term solution to many socio-economic problems, is job creation.It is no secret that unemployment is, or at least should be, a major concern for governmental policymakers. 43The creation of jobs results in an income for the worker, but also means that the state will be allowed to claw back certain taxable amounts. 44The funding raised from taxation will enable the state to bestow more money and resources upon the most pressing needs at present, such as, healthcare, housing, food etc.A second advantage of the creation of jobs is the concomitant creation of access to occupation based medical insurance. 45These occupation based medical insurance opportunities relate to the private healthcare industry, and, as such, formally employed people will be able to make use of medical aid.Thus, with more jobs being created, more people will have access to private healthcare, which will in turn lift some of the burden from the already ailing public healthcare system.Baskin has examined the difficulty of responding to a changed labour environment, and the problems of creating jobs therein. 46He states that: "when it comes to job creation, macro-economic factors and other non-labour policies are more important than labour market changes.The primary terrain for promoting job growth is sound economic policy, increased growth rates, and more investment, especially labour absorbing investment." 47 would seem then that the task of simply creating more jobs is not so simple, requiring the co-operation and team work of various state departments.However, factors that could be taken into consideration during a proposed program of job creation could be the following: political stability, the relaxation of certain government policies, 48 and perhaps even an increased interaction between the private and public spheres. 49

CONCLUSION
The National Health Amendment Bill 2008 seeks to regulate the private healthcare industry.While the lack of access to healthcare is a very real and pressing problem in South Africa, and certainly one which needs to be addressed, it is my view that the measures proposed in the Bill are unjustifiably restrictive.It is clear that the government's main reasoning behind this piece of legislation is the improvement of access to private healthcare, so as to alleviate the burden placed on the public sector.Some may view this proposed legislature as no more than an elaborate attempt by the government to shirk responsibility for the provision of public healthcare to all people within South Africa's borders.Whatever its intention, aside from the fact that it is poorly drafted, the Bill falls foul of meeting the standard of reasonableness as set out in Grootboom.Other possible means of improving the right of access to healthcare, both public and private, have been put forward above.One can only hope that these proposals, perhaps after a little refinement, will be taken seriously enough to warrant discussion by the relevant persons in the public service.

Bibliography Legislation
The 1 A lack of funding, facilities, technology, qualified nursing staff and doctors, especially specialists, is at the heart of the problem.See Olivier, Smit, Kalula and Mhone Introduction to social security (2004) 241. 2 Government Gazette 30985 of 18 April 2008.3 Carstens and Pearmain Foundational principles of South African medical law (2007) 234.
11by the insertion of Chapter 10A.It aims to introduce a framework for the regulation of the Cost of See Swart "Left out in the cold?Crafting constitutional remedies for the poorest of the poor" (2005) 21 SAJHR 215.28 Bilchitz (see fn 21 above) 4; TAC para 68; Grootboom para 42. 29 See fn 4 above.See also Dekker "Mind the gap: suggestions for bridging the divide between formal socialist state than with a programme of progressive realisation of a right in a democratic dispensation.South Africa is not a socialist state.
it is essential to have a public healthcare sector which functions optimally to cater for the needs of all people within the borders of South Africa.32 See part 2 above.2009-1-text.indd44 10/8/09 11:08:16 AM activities of a Constitution of the Republic of South Africa, 1996 The National Health Amendment Bill 2008 The National Health Act 61 of 2003 Cases Government of the Republic of South Africa and Others v Grootboom and Others 2001 (1) SA 46 (CC) Minister of Health and Others v Treatment Action Campaign and Others 2002 (5) SA 271 (CC) Baskin "South Africa's quest for jobs, growth and equity in a global context" (1998) 27 ILJ 986 Bilchitz "Towards a reasonable approach to the minimum core: laying the foundations for future socio-economic rights jurisprudence" (2003) 19 SAJHR 1 Dekker, Jansen van Rensburg, Liffman, Thompson and Van der Walt "Social security: a conceptual view" (2000) 4 Law, Democracy and Development 1 Dekker "Mind the gap: suggestions for bridging the divide between formal and informal social security" (2008) 12 Law, Democracy and Development 117 Liebenberg "The right to social assistance: the implication of Grootboom for policy reform in South Africa" (2001) 17 SAJHR 232