Page 106 - Risk Report 2024

1. Functional State 2. Politics

The healthcare sector is substantially impacted by service The 2024 election brings about uncertainty in terms of national
delivery failures and is particularly vulnerable to water and policy and priorities. In this sector the key policy matter relates
energy supply. Healthcare providers’ costs are directly affected, to the NHI Act signed into law in May 2024 and which significantly
which directly translates into higher healthcare cost inflation. impacts the sector (public and private), affecting healthcare
Service delivery failures impact severely on the quality of living, providers, funders, and consumers. The NHI initiative has been
which in turn impacts on health. The dysfunctionality of many described as a massive reconfiguration of the sector and is
State hospitals exacerbates the consequences at individual aimed at providing universal health coverage to all citizens. In
and social levels. Unfavourable healthcare-worker-patient its current form, there is significant uncertainty as to how it its
ratios at State facilities (mainly due to budget and resource implementation will play out, with the result that individuals
constraints) adversely impact patient care, staff retention, and and sector entities are unable to make strategic decisions to
overall healthcare utilisation in the sector. Universal health ensure the sector’s sustainability.
coverage requires substantial strengthening of public and
private healthcare infrastructure supported by a functional
State, strong governance and service delivery.

3. Economy 4. Social Security
Continued slow economic growth has plagued SA for several The sector is indirectly impacted through high unemployment
years. Sub-optimal economic growth stifles employment and (including scarce medical skills such as doctors and available
adds to poverty, inequality and high inflation, with healthcare positions for them). This contributes to the skills exodus from
inflation being one of the highest of all inflation components. the sector to other territories. This brain drain impacts the
This puts strain on citizens and sector entities such as Medical overall quality of life – more so in the healthcare sector as most
Schemes who must balance benefit richness against healthcare of the services are essential and not optional.
costs. Should the economy not respond positively in the
medium-term this may increase the burden on consumers, who
may ultimately buy-down to less expensive cover and services,
potentially impacting the state burden. Private healthcare
funders respond by negotiating better healthcare rates,
reducing cost of medicine and devices, improving member
health, and reducing fraud, waste and abuse.

5. Rule of Law 6. Water
Sector fraud and abuse is estimated to be as high as 30% Frequently failing water infrastructure presents healthcare risks
of healthcare spend p.a. (including all role players in the such as water-borne diseases (e.g. cholera) which could spread
sector while organised crime syndicates are on the increase). quickly and impact large parts of the population (as people rely
These costs place pressure on the fiscus and impact medical more on water than electricity as a basic need). Water is also a
aid member contributions in the private sector. Increased major part of hygiene and prevention of disease (e.g. listeriosis),
healthcare costs also negatively impact inflation and interest and shortages at healthcare facilities exacerbates the related
rates. The sector works with authorities to bring criminals risk. Lack of suitable drinking water impacts overall health and
to book. Initiatives such as Whistleblower hotlines assist to could affect the general burden of disease which the sector has
identify corrupt activities, but whistleblower protection is a to respond to. Water conservation awareness should start with
major challenge. employees and be extended to customers, service providers,
and the greater public, but is largely out of the control of the
sector.