NHI paper released for public comment

[DJ...]

Vat increases do not persistantly boost inflation, they are a once off which works it's way through the system very quickly.

You're right, it's not a sustained level of increase, however it would still temporarily impact CPI, especially considering the figures being thrown about here. The UK VAT increase saw CPI shoot up quite drastically in January so yes it does work it's way through the system quite quickly, however still lowers overall consumer spending power which in itself adds longer term inflationary pressures.

Let's also not forget that a VAT increase impacts lower income groups most severely so I highly doubt they will go the VAT route...

 

[alloytoo]

however still lowers overall consumer spending power which in itself adds longer term inflationary pressures.

Lowering spending power is the result of inflation not the cause.

Let's also not forget that a VAT increase impacts lower income groups most severely so I highly doubt they will go the VAT route...

The same group which would ultimately benefit.

SA does have a National health service, it is however disfunctional. (and it's only become disfunctional in last 20 years)

In a country like New Zealand government/private spend is about 80/20. In SA it's 20/80.

SA doesn't need to recreate the wheel, it needs to shift the spend.

The perception in SA is that state healthcare is russian roulette with 5 bullets in a six shooter.

In New Zealand the perception is that state healthcare involves a bit of waiting (for non-emergency care.)

The argument is this.

The state insures the health of 100 people. (100% of population)

Private healthcare insures 20 people (20%) and excludes 10%

70% choose no healthcare because they either cannot afford it or they evaluate their risk as low.

So state health has 100% paying for 40% (20%+10%+10% unforseen) cost per person is low.

Private healthcare has 20% paying for 25% (5% profit) with an overall higher risk & cost per person is high PLUS you have associate productivity and socio-economic problems for the uninsured.

Paradoxically a functional state health care system offers better outcomes at lower cost for everyone.

I don't believe throwing wads of taxpayers cash at a 'NEW' national health system is going to solve the problems inherent in the old one, which is supposed to do exactly what the 'NEW' one will 'hopefully' do.

 

[Pyro]

Official unemployement is about 26%, unofficial in excess of 30% atleast, possibly more.

All you are doing is taking away their reasons to work and actually produce, which is where real prosperity comes from.

Remember if a guy is getting R1000 a month now, as unemployement for example, if he is offered a job that pays R2000, then what we are saying is that he has to work 160 hours for R1000 (Thats the marginal benefit). Now essentially, he gets his unemployement benefits, as well as healthcare paid for him, so now that R1000 marginal benefit of working is even less.

This means there is less incentive to get a job and produce for those who are unemployed and less incentive to produce (Why work hard, if the harder you work the more the state takes away from you, the marginal benefits of getting salary increases means less and less).

The solution to our problems is not to incentivise people not to work, no matter how you dress it.

That's why I'd say: Yes, implement it, but only give full cover to taxpayers (or at least people that are employed). Or in the case where they lost their jobs, give them cover for the next year.

Then you can add some blanket coverage. People under 21 or students up to 25 get covered and people on pension get covered.

The rest only get basic cover like currently provided.

This does have the problem with catering for informal employment though.

 

[Albereth]

I don't speak spanish - how will that affect my visit to a doctor?

 

[DJ...]

Lowering spending power is the result of inflation not the cause.

You're right - I was clutching on to that argument a little too much...

 

[WilD_CaT]

A recent study indicates that while the US (a largely private healthcare system) pays the at least 25% more for healthcare per person than any other OBDC* country it does not boast the best outcomes. Countries with national health schemes boast significantly better benefit/cost ratios.

Only 10% of US hospitals are private. The rest operate under the medicare and medicaid banners and are thus heavily subsidized and have to abide by certain rules and regulations in order to receive state funding.

The US system is already heavily socialised and the NHI is just an insurance program.

 

[techead]

please tell me

does this mean that the taxes that I pay will run this NHI in the same way that the minority of the country pays taxes and runs the country?

 

[daveza]

the minority of the country pays taxes and runs the country

Nope.

The minority pays the taxes and the majority runs the country.

 

[EnchanterG]

Soo my mandatory contribution (read - punishment for having money) is being used to fund a initiative I won't use because I have a medical aid. Thus my money is supporting the poor...

This rhetoric sounds familiar to the crap that moron Lenin came up with...

Why don't the public/discontent veto this?

 

[WilD_CaT]

In a country like New Zealand government/private spend is about 80/20. In SA it's 20/80.
SA doesn't need to recreate the wheel, it needs to shift the spend.

Transfer of wealth doesn't improve healthcare or reduce costs. All it means is that now other people get the healthcare you pay for via taxes and you receive worse healthcare. Or, if you remain under private healthcare, then you are in effect increasing the cost of healthcare in addition to redistributing wealth.

In New Zealand the perception is that state healthcare involves a bit of waiting (for non-emergency care.)

Generally there are large waiting times in all NHI/NHS or socialised healthcare systems. This is due to the increases in demand caused by it.

The argument is this.
The state insures the health of 100 people. (100% of population)
Private healthcare insures 20 people (20%) and excludes 10%
70% choose no healthcare because they either cannot afford it or they evaluate their risk as low.
So state health has 100% paying for 40% (20%+10%+10% unforseen) cost per person is low.
Private healthcare has 20% paying for 25% (5% profit) with an overall higher risk & cost per person is high PLUS you have associate productivity and socio-economic problems for the uninsured.

Seems to me a mish-mash of arguments that don't really add up. I'll give a bash at tackling this.

- The state doesn't do anything. Its people and taxes who pay for it.
- Profits in a market demonstrate that wealth or value in a society has been enhanced. If people are willing to pay R100 and that includes 25% GP, then it means that the buyers of healthcare, value the services they receive, more than the sum of the individual components (Doctors Salary, Equipment) and the mere fact we have profits demonstrate those resources are creating value and should not go to other areas. (Mises demonstrated in the 1920's I believe that no economic calculation can be done unless you have pure market prices, the best socialist economists at the time couldn't refute him and instead thanked him for teaching them the importance of market prices in economic planning. This has not been refuted to this day.) The Myth of Efficient Government Service http://mises.org/daily/1471
- If the state is paying funds for 100% of the population and less than 100% use it, then you have an overallocation of resources and is inefficient.
- Private healthcare insures those who voluntary decide to buy insurance. If people were wealthier more people would be able to afford it and pay for insurance and products according to their needs and desires.
- I do't know how you can make any value judgements on socio-economic conditions. Yes, someone who is healthier is generally more productive. But giving people things for free also acts as a disincentive. If nothing else socialism and welfarism as shown it is difficult to get people to work hard when you give them all they need for "free". Since you cannot measure the effects of both these forces, you cannot make a statement such as there is a "net increase" in productivity, as you can never demonstrate this.

Paradoxically a functional state health care system offers better outcomes at lower cost for everyone.

Non sequitur.

See link above, the Myth of an efficient Government service.

I don't believe throwing wads of taxpayers cash at a 'NEW' national health system is going to solve the problems inherent in the old one, which is supposed to do exactly what the 'NEW' one will 'hopefully' do.

Agreed.

 

[bekdik]

As far as I know....

Annual revenue from all tax sources = around R600 million
Annual estimated cost of NHI = around R600 million

In other words, good old joe taxpayer will foot the bill, all 20 of us.

I've been opted out. No longer having an income exempts me from paying tax. There's always a brighter side ...

 

[Albereth]

The trouble with getting everyone onto the same systems is that it will settle at the lowest common denominator. Most certainly not a better life for all

 

[noxibox]

If they fixed the public hospitals and improved on some shoddy aspects that were pre-existing, then they'd be able to provide basic health care to the poor. That's where this should start.

This rhetoric sounds familiar to the crap that moron Lenin came up with...

Lenin came up with social support? The problem isn't a national health system, but having too many poor people.

 

[WilD_CaT]

Lenin came up with social support? The problem isn't a national health system, but having too many poor people.

What he means it is the same idea/ideology, centralised economic planning by the state.

 

[Ancalagon]

Public healthcare is great in theory, because it gets around the problem that corporations have your health in mind only so long as it makes them money. If you have a condition that is not profitable for them to treat or cure, tough luck.

On the other hand, the problem with NHI is that we just dont have the money for it. We are a third world country, not a first world country. We cant even run the state hospitals we have now, how is throwing money at the problem going to help? And where is the money going to come from? I know the obvious answer to that - you and me.

If they want to do this, they need to make it so that the charge comes out of VAT and not income tax. Everybody pays VAT and no one can avoid it. That and they need to think smaller. This grand plan is all well and good if you have 50 million educated high earning tax payers, but since we have 5 million or so registered tax payers, it just will not work. And it would be a whole lot easier if the ANC wasnt wasting money on luxury cars, overseas trips and KFC and Johnny Blue banquets, but I digress.

 

[daveza]

Any maths boffs - if we add 1% to VAT how much would this be ?

 

[ToxicBunny]

My calculations are probably HORRIBLY off so forgive me.

But Income for the guavamint was R834bn in 2008/2009. Of this 26% came from VAT.

That equates to R261.84bn from VAT. This means each % of VAT should roughly equate to about R18.7bn. So an extra % won't do much to cover the NHI. They would need to hike VAT by another 12% to cover the NHI in its final form (assuming it'll cost R225bn per year)

 

[Ancalagon]

Which I think illustrates the absurdity of the scheme. You cant even provide services, housing and education for the people, and mostly because of mismanagement and massive corruption, but now you promise them free first world healthcare. Makes my blood boil.

 

[Rkootknir]

The green paper is available here. (PDF)

 

[WilD_CaT]

It sounds like the levy for this will be a witholding tax that employees with withold from employees and pay over to SARS like PAYE.
They will probably also make the employer contribute some amount in a corresponding %.

Let me explain the financial/economic implications:

E.G. Lets say now you earn R1000 pm for simplicity. Lets also assume there is not taxes or anything else on this and your employer actually pays you R1000.

Now lets introduce a R200 "employee contribution" and 50% employer contribution of R100 (R200X50%).

Now the reality is what will happen is that you as the employee will essentially get paid out R750 and the R250 (R200 + R50) will come out.

Now I know some of you are thinking that isn't correct because that means you paid everything and the employer didn't contribute but from an economic standpoint that is not the case.

From the employers perspective, all costs of employing you, including salary, contributions, SDL, UIF etc. form the total cost to company. All this does is force the employer to pay more (The exmployers contribution), which means ultimately, there are 2 things that are going to happen.

If the employer foots the bill, the employer starts hiring less (Cost of hires has increased) which results in a greater burden on the system and lower productivity and increasing costs.
Or, the employer works the increased cost into your current package, I.E. the total cost to the employer for hiring you doesn't increase, rather he just takes it out your salary when your salary/increase is restructured. So you as the employee of course wind up footing the entire bill.

Either way, any form of witholding tax on employees, will not benefit the employee*** (Less income/choice) and those seeking jobs.

*** It will only benefit the employee if his decrease (Tax) is less than the perceived cost/benefit of healthcare provided, I.E. he has to make as much use of the system as possible to get the most benefit. If you don't go to the doctor, you lose out. Perverse considering if you are healthy you don't benefit, in other words, where is the incentive to live a healthy lifestyle, if you get sick, some other schmuck is footing the bill. Scheme incentivises people to go to the doctor more than normal and thus once again results it INCREASED costs.

Anyone who thinks the actual real cost of healthcare will decrease is kidding themselves. Price = Supply vs Demand.