The Department of Health and National Treasury are discussing potentially leveraging South Africa’s R2.3-trillion savings pool to upgrade public health infrastructure. This is part of the department’s preparation for implementing National Health Insurance (NHI).
The Department of Health is working to address infrastructure challenges that could impact its rollout. The focus is on finding sustainable funding sources, with the Public Investment Corporation (PIC) identified as a potential source of support for public healthcare improvements.
Why the Public Investment Corporation?
The Public Investment Corporation, Africa’s largest asset manager, controls assets amounting to R2.7 trillion. Historically, the PIC has funded private healthcare facilities, a model that the Department of Health now hopes can benefit the public sector. Minister of Health Aaron Motsoaledi highlighted this goal in response to a parliamentary query from DA MP Michéle Clarke, emphasising the need for equitable healthcare facility standards across sectors.
Treasury and PIC Discussions
While discussions between the PIC and the Department of Health on healthcare funding began a decade ago, the National Treasury was not involved until recently. However, at the GNU’s first cabinet lekgotla meeting in July, Treasury officials indicated that they would consider the PIC as a potential funding source for public health infrastructure, aligning with Motsoaledi’s ongoing advocacy for equitable investment in public healthcare.
The Path Ahead
Tapping into pension funds to finance public health improvements could face regulatory hurdles, particularly concerning Regulation 28 of the Pension Funds Act. This regulation controls the types of assets in which pension funds can invest, potentially necessitating amendments to enable significant allocations to public health infrastructure.
As discussions evolve, the potential role of the PIC in funding NHI-aligned public health infrastructure highlights a pivotal moment for South African healthcare. If successful, this funding model could catalyse the improvement of public healthcare facilities, creating a stronger foundation for the anticipated national health reforms under NHI.
Leveraging the PIC’s substantial assets could be a transformative approach to funding public health infrastructure in South Africa. With the National Health Insurance Act in place but awaiting full implementation, all eyes are on the Treasury and PIC to determine if this innovative funding solution can bridge the gap in healthcare infrastructure and bring equitable healthcare access to all South Africans.