JSE-listed firms with healthcare exposure tumbled on the exchange yesterday after it was announced that President Cyril Ramaphosa was set to sign the National Health Insurance (NHI) Bill into law today.
Business groups slammed the signing of the bill into law, saying in its current form the NHI Bill was fundamentally flawed, would damage the economy and dent confidence in investing in South Africa.
Insurance firms with medical exposure fell. Discovery slid 8.07% to R107.21, Momentum Metropolitan slid 3.84% to R21.29, Sanlam was down 1.07% at R70.42, while Old Mutual fell 2.16% to R10.89.
Private healthcare provider Netcare slid 3.59% to R11.27 and Life Healthcare fell 1.2% to R10.72, while AfroCentric Group, a JSE-listed investment holding company providing services and products to the healthcare sector, shed 1.89% to R2.60.
Business Leadership South Africa (BLSA) said in a statement that the proposed bill had been found it to be unworkable, economically damaging and contrary to the precepts of the South African Constitution.
BLSA’s CEO, Busisiwe Mavuso, said: “The government is rushing populist policy through Parliament, which can only be seen to be an electioneering ploy, as the significant and meaningful public input into the bill and its socio-economic ramifications have not been considered.
“This move is destructive for many stakeholders and relationships, at a time when partnerships between government and business are critical to building confidence globally that South Africa is an investable destination. The law will never work, simply because there is no capacity to implement it, and as soon as it is signed it will be embroiled in litigation on several fronts, including its constitutionality.”
BLSA said it fully supported the call for universal access to quality healthcare for all South Africans. However, this poorly conceived bill would obstruct – not facilitate – access to quality healthcare for citizens in our country.
The legislation would inflict serious damage to both the private and public health systems through the government’s attempts to set up a single payer fund to acquire all significant health services in the country, and effectively destroy the private health system in the process, without any plan on how capacity will be created in the public health service.
Mavuso said: “South Africa’s constitutional framework makes consultation a key part of the development of laws. The Constitutional Court has in the past struck down legislation because of a failure of the state to comply with its constitutional obligations to include the public in development of legislation.
“This is not just a cost to those who spend time and money on providing comment, but also to the government. When laws are ambiguous or unconstitutional, they will inevitably end up being challenged in court, requiring government to pay for legal processes. Many of these lead to amendments. It could all be avoided by properly engaging with public input and getting the legislation right in the first place,” she said.
Business Unity South Africa (Busa) also said in a statement it was deeply concerned by the announcement given the NHI Bill’s many substantive and procedural constitutional flaws.
It believed that the legislation, in its current form, was unimplementable and damaging to the country’s healthcare sector, to the economy more broadly and to investor confidence.
Cas Coovadia, the CEO of Busa, said: “We fully support the objective of universal health coverage; however, the NHI Bill in its current form is unworkable, unaffordable, and not in line with the Constitution. What is especially troubling is that the president is proceeding with the bill despite extensive constructive inputs made by a wide range of stakeholders, including doctors and healthcare professionals, civil society, public sector unions, academics and business.
“The unfortunate consequence is that this version will hamper, rather than promote, access to quality healthcare for all citizens in our country.
“Consequently, we will pay close attention to the president’s announcement on Wednesday, based on which we will consider our options. Our subsequent actions will be guided by our belief that it is essential that we get the NHI right through all means still at our disposal, including appropriate legal interventions, so that the legislation that is finally implemented is in the best interest of our country, and all her people, for generations to come,” said Coovadia.
BUSINESS REPORT