[Music] well I haven't had the opportunity to interview Dr Richard Friedland the chief executive of net care since December 2021 those of you who have some memories may recall that uh he said at the time it looks like Omicron was not the next terrible War wave that was going to hurt us with Co he said it looks like Co May well be the worst behind us my goodness he was right everybody else seemed to be wrong at the time and uh it wasn't long afterwards that we got back to normality so he's got another big
story for us today Richard good to be talking with you you know it's hard to imagine now how impactful that interview of yours was in December 2021 we were the whole country was in in almost uh par paralysis over the covid crisis and you said hang on there is bright light we at netk are seeing things that we did not expect and it appears as though the worst is over of course not too many people believed you right then but my goodness you were on the money yeah thank you Alec those were terrible times in
our country's history and in fact globally and you know the tragic loss of life was shocking in our organization we lost 75 Frontline Heroes but I was able to to speak from a position of authority because I was on the floor I was in our hospitals and I could see the difference in the fourth wave this wasn't some theoretical construct that an academic or an epidemiologist or statistician was making and so I did come in for enormous criticism and Flack but the reality on the ground was very different from the third wave the second and
the first wave and so I was able to say based on that we believe it's different and we then went to publish our results in the journal uh the jamao the Journal of American Medical Association and we were the first to come out with this but as you say hugely controversial but then I've never been afraid to stick out my neck if I believe that um what we're saying is the truth you've been running net care for coming up for two decades we'll talk about your departure in a in a moment but let's start off
with the address that you gave yesterday to the hospitals Association of South Africa because right now the whole subject of National Health Insurance nhi is as you said in that address extremely polarizing for those who don't know South Africa but do know America it feels like we're a bit going into the American election you're either with Trump or camela and in this case on nhi you either with it or against it or so it seems and yet there has to be as you explained a middle way and and that's what we'd like to unpack with
you today yeah certainly an and I want to contextualize it in the fact that I think we all recognize Healthcare is in crisis in our country and we're at the crossroads at a very pivotal time in terms of healthc care delivery and access and the debate is as you said very polarized the we've got to put an end to the divisive rhetoric that has characterized the debate and the polarization of either nhi or no nhi and what we're suggesting is a middle ground a return to you know a reform that was suggested in fact was
part ofc policy in 1994 was also part of government policy in 1997 and was contemplated when the medical schemes Act was put together in 1998 but never fully implemented and what we're saying is that actually this is informed by over two decades of very significant research policy papers uh this idea of mandatory cover for all of those formerly employed and we only have to look around the world at where this works you'd be surprised to know Alec that in over 61% of African countries there's some form of mandatory cover there mandatory cover in China and
Japan and many Asian countries in Latin America in the Caribbean and in Europe and we think that this is a viable solution when I was reading through the speech I was just trying to find parallels to how this might be and recalling the time that I worked for a corporate you had mandatory pensions 6% of my salary went into a pension fund and that was matched by the company are they similar or could you do you see similar things here that if you are employed by a company in other words you have full employment that
you become the responsibility partly of yourself and the company for your medical cover rather than the state yes absolutely but there are different mechanisms to achieve that based on affordability levels and um we're very confident having done a lot of acturial analysis with our ateres that this will come at a substantially lower cost and far more affordable uh than what is contemplated by the nhi remember Alec the the nhi is contemplating increasing the spend of 271 billion by 200 billion but that's a figure that goes back to 2010 and 2011 you know B Busa and
B4 sa estimate is closer to 500 billion we simply can't afford that and you know if I may just mention was that if you were to to to raise that kind of money you can do it in one of three ways let's assume you do it through corporate tax well that's an increase of 75% uh on corporate tax to 47% if you were going to do it on personal income tax that's 31% and heaven forbid we should tackle that well you've got to take that from 15 to 21 a half% that's 43% we can't afford
it and so this is a far more affordable way of achieving it and the most important element was is getting mandatory cover because that means everyone who's employed is um is covered and we deal with this issue of anti-election where only those who are sick remain on a ski and the healthy uh remain out and so what you find with mandatory cover is that the rich subsidize the poor the young subsidize the old and the healthy subsidize the um the unwell and what AES are telling us is that you can reduce Medical Aid contributions anywhere
up to 30% almost overnight if you can achieve the additional mandatory cover that we're calling for and risk Equalization and so um we want to have the chance to discuss this with our partners in government uh and decide on what should be that minimum um benefit package that is Affordable for every but presumably someone's going to pay for this in the private sector it sounds a bit of a public private partnership in a way uh you're taking responsibility for employees away from the Govern government would it not hurt the um employment issues in other words
smaller businesses saying well I can't really employ this person because I'm going to have to pay their Medical Aid on top of everything else you raise a very valid point and I think for small businesses and others there are solutions again we want to be able to take this to government to make sure that yes that this burden on corporate South Africa or on the South African public is limited but it is certainly far more affordable uh than what is being suggested by the nhi and I can tell you this Alec that we forget the
enormous benefit and this has been demonstrated globally in thousands of studies the wonderful BookIt the impact of improved Healthcare on the country on on the economy's well-being and the decline in absenteeism and we've got to get this economy going you know aleec everyone talks about inequity and inequality and whether you look at Food security you look at housing you look at education and particularly in healthare but what is the root cause aleec the root cause is we have one of the highest unemployment rates in the world 3 over 32% global average is 5% we simply
have to tackle unemployment and growth in this country in order it to be able to to afford the kind of ambitious schemes that the nhi um is suggesting without crippling the economy So within a limited funding envelope uh and with the kinds of levels of unemployment that we have in our country this is a viable option uh and it's one that's affordable and comes at a fraction of the cost that taxpayers would ordinarily um have to Fork out and the biggest single advantage of this Al is the fact that it's not just covering those that
are formerly employed and remember we saying it should be in a gradual stepwise those above the tax threshold and then finally those below but if we were able to achieve that it puts 27 a half million of our population out of 63 million so it moves significantly from the 9.2 million currently covered um to 27 A5 million and leaves the government instead of looking after 85% of the population um looking after 5 million people which is closer to 58% of the population and I think that what that does is says without increasing government's coffers your
per capita spend now on those that are Indigent and unemployed increases by 52% you know it increases from about 5,000 R to about 7,600 R odd and that's a very very significant increase if you look at the 200 billion loan that government's seeking to raise that takes them to 7,500 per capita and so I think that the benefits of reducing the massive waiting lists um the overcrowding allowing for Health Systems strengthening in the public sector ref focus on improving infrastructure and probably the most important because we can't we can't deliver Health Care with robots is
filling unfunded and vacant posts of nurses and doctors in the public sector and having the money to fund training we've got to train double the number of nurses at it we want to deliver any system we've got to train doctors I've shown in that presentation you know by any standard we have a shortage of doctors per 100,000 of population so the benefits to the public sector are enormous besides those to those employed as we drive the economy and the the real benefit is if the government of national Unity gets its act together as they have
with peers with escot and we can drive employment growth the benefits to Treasury and the public sector multiply because as the population is becoming more active uh and more employed their burden of delivering Healthcare is actually not increasing so you know we've got to look at this as a real partnership in collaboration and cooperation between the different sectors to you find something that really works and I want to just say this if I may you know it's been estimated by people in government this will take 10 to 15 years and don't worry about it the
truth is we must worry about it we can deliver a a solution now and we need that solution we all know that and this is simply putting on the table legislation that was promo you know contemplated but not finally gazetted in 2000 or in 1998 why wasn't it gazetted back then I can't answer that exactly I know that in 1997 the national Department of Health uh social health insurance working group uh advocated for um mandatory cover but they suggested only starting with those above the tax threshold from an affordability perspective and so we're also suggesting
that let's take that as a first step um and as the economy grows and we can create jobs and we improve productivity we can consider those below the tax line and then ultimately you know there's a third and fourth phase as the economy expands we can allow there to be an nhi type of fund for for for the public sector so you know the possibilities of building on this platform are endless but we need to do this in collaboration and cooperation and you know people often say to me well Richard this is a lofty ideal
but it's a lot of nonsense you don't have the capacity for this well we presented the capacity at the health Summit president's Health Summit in and job Summit in 2018 and we employed experts to look at it and it showed the private sector private sector can take up to 14 million people so we do have the capacity and without going to recreate infrastructure and uh enormous Capital uh investment we can absorb uh a very significant part of our working force so I guess the starting point would be to go back to that act uh in
the early days of South Africa's democracy and to maybe again reassess why it didn't it wasn't promulgated then rather than at the moment I'm sure you saw the speech that the minister of Health gave or read the the speech that he gave yesterday to the pharmaceutical International pharmaceutical conference in Cape Town where he started likening the resistance to nhi to swart kafar and white people stocking up on candles and Tin food well I don't know any white people who did that and uh I certainly didn't but anyway it is a it's a lovely myth that
that can get trotted out um that was supposedly happened in 1994 but it does appear as though you've got these very very strong factions on both sides and how are you going to break through to get some maturity some logic some rationality into this argument with what you've proposed well Alec I think you make a very good point but I don't think we must be distracted or put off by device of retric and we must see it for what it is and this is not about an individual or an individual person this is about what's
the best for South Africa and what's affordable and what is sustainable and you know we can all talk about the legal issues of the nhi act and yes there will be legal action this is a real viable solution and what we said yesterday is that it's not just about this there are tons of um private sector public private initiatives that we can assist government training is a massive example you know we know that we're trading 5,900 people at the moment in nursing we have to train double that amount by 2030 we've got 28,000 nurses shorten
the moment um and we've got to train 70,000 by the year 2030 but we've actually got to train 87,000 because 50% of our registered nurses and most of them in the public sector I might point out on yearing retirement now we've said to government we'll take up the Flack on those extra 50% the doubling that you have to train we have the capacity you know we're training 68% less because of new regulation and a change in curricula we respect that it's been a long time and so the private sector stands ready to help train doctors
it stands ready to help train nurses uh to twinning of hospitals there is enormous cooperation on the ground between us as healthcare workers um between various hospitals and and public institutions however as it reaches the public echelons we get caught in this unnecessary and divisive retoric and this is about a partnership it's about us all coming together and I would suggest that we're not distracted by this kind of language it's divisive it's unnecessary and we we've got to look at real um commonality and and more that unites us as opposed to that which divides us
perhaps to look on the optimistic side politicians love flying cuts and then everyone celebrates when the proposal is brought back to normality in other words pushing the envelope aggressively as has happened with nhi there can't be too many people who can see a possibility of the tax increases that we're talking about 21 a half% for vat it it just sounds absurd but at least if we then get the creative juices going around the economy as appears to be happening right now in in the proposals that you've brought then everybody can celebrate a victory both sides
can save face if you like do you think that could be where we're heading I think it's always about the sacrifice of common purpose Alec in terms of what's good for South Africa why are we doing this because we care because we all care about the future of South Africa and we all recognize that Healthcare is a universal right uh of course we do and it's because of that very reason we've got to come together and find something that is rational affordable sustainable and utilizes the current strengths as opposed to trying to break every down
and recreate something we have strengths within the various sectors of South Africa that stand willly completely willing to participate and in complete contrast the kind of rhetoric now being floated out on various podiums you know it's we don't need that and we're not going to respond to it we're going to respond to a clarant wful partnership uh in this regard and I think there is a middle ground to be found ultimately we've got to put Patients First and I think the public sector is unfortunately in Dire Straits and this proposal really removes an enormous burdens
from them at a time when they just don't have the capacity they don't have the infrastructure they don't have the doctors and nurses we have a shortage and um you know there are mechanisms to help fund that uh and improve on it but it has to be in collaboration and cooperation and we looking forward to that uh engagement in that regard and we're not going to be distracted by unfortunately divisive retoric and and that kind of language well we have a government of national Unity we have lots of people talking about public private Partnerships and
here's a a working model or a model that everyone accepted 20 years ago not even 20 years ago but uh has never really been implemented Dr Richard Friedland is the chief executive of net care who's raised this issue at the hospital Association of South Africa yesterday I'm Alec hog from bus news.com [Music]
