Health costs we should all be happy to be paying at long last

With all the debate and discussion about the costs (and hopefully benefits) of NHI, it really is encouraging to see that the Department of Health and government aren’t hanging all their hopes on the Big Bang of NIH to solve our healthcare issues.

As we slowly put the curse of the Mbeki-Manto-Beetroot alliance behind us, all HIV patients with a CD4 count of 350 or less will now get government antiretroviral (ARV) treatment, Deputy President Kgalema Motlanthe announced on Friday.


This is fantastic news because, although there is naturally a cost involved, the increase in productivity of our workers, the protection of normal family units and a general sense of improved quality of life for our citizens has considerable value. Hopefully the buying power of the SA government for ARV’s is also reaching astronomical levels and therefore very low costs must be available.

This is of course a potential benefit of NHI – more robustly directly single-payer and therefore single price-maker for health services could contain costs to an extent. The extent to which this cost containment is placed on foreign companies and drug manufacturers is a straight win for the economy. Cost savings squeezed out of local firms and individuals have a partially offsetting cost in terms of reduced incomes for those sectors of society.

But this is overwhelmingly good news – even if it is 15 years late.

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.

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