3. Discussion of constitutionality issues at a roundtable of constitutional and legal experts

from BRIEFING DOCUMENT: Potential Constitutional issues arising from the proposed NHI in SA

4. Request for legal clarification

grounds for a constitutional argument. In its founding provisions, the Constitution affirms that the state is founded on, among others, the value of the “supremacy of the constitution and the rule of law” (RSA, 1996). The rule of law suggests that legislation should be clear, unambiguous and provide reasonable certainty and sufficient information to enable those affected by it to respond in an informed manner. This notion was supported in the Constitutional Court ruling in Van der Walt v Metcash Trading Ltd 2002 (4) SA 317 (CC). Here, the court stated an absence of arbitrary power and unpredictability as essential elements of its understanding of the rule of law (Venter, 2011). Furthermore, in Affordable Medicines Trust, the court held that legislation should “indicate with reasonable certainty to those who are bound by it what is required of them so that they may regulate their conduct accordingly” (Constitutional Court, 2005).

An online roundtable on the constitutionality of the NHI Bill was hosted on 19 May 2020 via Google Meetup. At the start of the roundtable, participants were reminded that the aim of the discussion was to test whether the previously identified constitutionality issues have merit. Participants were also encouraged to put forth any other legal issues that may need to be considered.

The questions that participants at the roundtable had to address were: (1) whether the policy is compatible with constitutional principles; and (2) whether it will also promote the principles of the constitution. The roundtable provided a platform to facilitate robust discussion and debate and not to necessarily establish consensus. Consensus on whether concern for each of the potential constitutionality issues was warranted, was rarely achieved.

Below we discuss the various sections of the Constitution where the NHI Bill may be in conflict or infringe on rights as well as participants’ views on each of these possible areas of concern. While some sections raised no concern, with others there was clearer consensus amongst participants of the potentially problematic interaction between the NHI Bill and the Constitution. There was quite a lot of consensus about both Section 22 (right to trade, occupation and profession) and the irrationality argument with regards to NHI which has bearing on the relationship between the NHI Bill and Section 36 of the Constitution.

Potential infringement of the NHI Bill on part (a) of Section 27(1): “Everyone has the right to have access to health care services, including reproductive health care;”

Section 27(1) of the Constitution deals with the right to health and healthcare, including reproductive healthcare. The state must provide resources to allow for progressive achievement of these rights and no one must be refused medical treatment.

While there is an obligation in terms of Section 27 to provide essential health services, this does not preclude an individual from making their own arrangements for access to healthcare. The fact that there is an obligation to provide access to essential health service implies both a positive and a negative right: the obligation to provide (positive) and also the responsibility to ensure that the obligation does not infringe on the right of people to provide for themselves. It was mentioned that as part of this obligation, it is important that the South African government does not take regressive steps in terms of healthcare provision, that is in an attempt to provide more care to some, take away care from others.

Essential health services have not been defined in either the Bill, or by the courts. The term is lacking clear definitional content. A basic benefit package has not been set out in the NHI Bill and it is therefore not possible for the Court to pronounce on whether the health services to be provided by NHI can be considered essential or not.

The major stumbling block, however, in terms of NHI is with regards to “available resources”. In NHI discussions and arguments it is generally assumed that available resources include the money spent in the private sector (4% of GDP) as well as the public sector. There’s an assumption that the equivalent private sector amount can be raised in taxes and redistributed to the whole population. This lack of definition with reference to available resources is what creates the impasse around reaching agreement on NHI between critical stakeholders. Generally there are thought to be three groups of stakeholders with regards to the resourcing of NHI: (1) those who argue ‘let’s work with the public funds available’, (2) those who say ‘let’s pool everything, both public and private resources’, (3) and stakeholders who argue for the creation of new resources through new taxes, fund raising, etcetera. Ultimately, the main mechanism to access resources in the private health sector would be the tax system. Changes to the tax system to allow for resource pooling from existing private healthcare sector expenditure would be constrained by the design of the tax system, making it difficult to match tax revenue to be collected to the full amount as currently spent on private healthcare. The lack of an NHI financing paper which stakeholders had thought would be released in parallel to the NHI Bill has not assisted with providing clarity on the likely financing mechanisms.

During the discussion it was argued that the right to health does not have definite content. The courts have generally not pronounced on resource availability in the hard sense. It will be interesting to see in which direction the positive and negative rights associated with Section 27 are weighed, that is do the negative or positive rights have a heavier weight attached to them.

The questions being posed to Counsel from this section include: • Given the information presented on the NHI Bill in this section and from the roundtable report (earlier section), do concerns about the NHI Bill relative to Section 27 of the Constitution have legal merit? • Given available case law and legal precedent, do positive or negative rights have heavier weight?

Potential infringement of the NHI Bill on Section 18: “Everyone has the right to freedom of association.”

Section 33 of the NHI Bill (National Department of Health, 2019) currently confines the role of medical schemes (the existing private healthcare funding market) to complementary cover once NHI has been fully achieved:

“Once National Health Insurance has been fully implemented as determined by the Minister through regulations in the Gazette, medical schemes may only offer complementary cover to services not reimbursable by the Fund.”

Given that medical schemes will be limited to complementary cover only, there is potentially an infringement on the right to freedom of association. Citizens who want healthcare access will be compelled to be associated with NHI 1 . In this context, it was argued that having a choice in terms of a medical scheme as alternative to public or NHI healthcare is a freedom of association. The NHI policy therefore potentially violates the right to freedom of association. A few questions emerged from this debate: Is there a need to create a limitation on private funders in order to increase capacity in public health sector? And more importantly, can one choose a preferred practitioner? It is important to take note that the NHI Bill does not prohibit out-of-pocket payment for private healthcare –it is individuals right to private insurance that is limited, not the right to private care.

Legal experts argued that this line of reasoning is a tenuous one (a “tortured argument”). Section 18’s conception of the right to freedom of association relates more to the protection of liberty and protecting participatory democracy rather than choice in the market. The right of association has to do with the right to form groups with common interest, to associate with those we want to in public, etc.

1 There are parallels to this in other parts of the economy: the formally employed are compelled to contribute to Unemployment Insurance Fund (UIF) and via fuel levies to the Road Accident Fund (RAF). 1 There are parallels to this in other parts of the economy: the formally employed are compelled to contribute to the Unemployment Insurance Fund (UIF) and via fuel levies to the Road Accident Fund (RAF). This does not, however, preclude individuals from taking out private insurance for the same risks covered by these public funds.

In this context, one of the experts voiced the concern that there is a danger of conflating the practical difficulties of questions with the crisp details the roundtable aimed to discuss. What the roundtable discussion was meant to answer remained unclear: Is the Bill constitutional, yes or no? Nothing in the Bill states that South Africans cannot belong to a medical aid scheme once NHI is implemented – it was argued that Section 33 of the Bill is forward looking and will only limit medical schemes to complementary cover once full NHI has been achieved. A counter argument to this (also made in other discussions) is that the implications of the Bill once fully implemented, rather than simply the current implications, should be considered.

Potential infringement of the NHI Bill on Section 12(2)(b): “Everyone has the right to bodily and psychological integrity, which includes the right to security in and control over their body;”

It is argued that the freedom to choose healthcare services may well be intertwined with the constitutional right to bodily and psychological integrity entrenched in Section 12(2)(b) of the Constitution. This right guarantees all people control over their own bodies.

In debating the validity of this line of argument, it was stated that we need to be cautious of adopting a consumerist view of healthcare and avoid information asymmetries such as moral hazard and adverse selection. because the patient may not always know what’s best for them. It is usual for health systems to have referral pathways, or to select contracted providers on the basis of quality of services provided. A strength of the Bill is the referral pathway and reference to the need for evidence in the way care is delivered. Who is best equipped to make the expert medical judgements? Following the line of argument around consumers needing to choose their providers potentially leads to a minefield discussion about who is best equipped to make difficult health decisions.

It was asked whether this line of argument may only become relevant in the long term. However, arguments around the envisaged endpoint of NHI need to be considered. It was argued that if the public health system is going to determine who your doctor will be and you’re not comfortable with it, then it becomes problematic (especially given that medical schemes will eventually be limited to complementary cover only). While participants noted not being able to choose your own doctor as a concern with the NHI Bill, this is already the status quo for many medical scheme products. Medical schemes also impose doctor and hospital networks. The NHI Bill also does not prohibit out-of-pocket payment for private care.

Measuring the Bill relative to this section also raises the issue of whether NHI will be a funding or a servicing mechanism. The service provision aspect of NHI may ultimately limit what is possible in this regard.

Section 8 of the NHI Bill states that if you do not follow the referral pathways set out by NHI, you need to pay for these services on an out-of-pocket basis. A question was raised about whether this could potentially be viewed as punitive and therefore undermining to the right to bodily and physical integrity. The public health sector currently follows strict referral pathways – patients are not allowed to access tertiary care without having followed appropriate referral pathways from the primary healthcare level.

Potential infringement of the NHI Bill on Section 22: “Every citizen has the right to choose their trade, occupation or profession freely. The practice of a trade, occupation or profession may be regulated by law.“

The facilitator introduced the discussion on this section by asking whether there are limitations in the Bill that prevent the right to (a) trade as a healthcare practitioner and (b) enter into the health sector. Will practitioner options to freedom of trade, occupation and profession be limited?

One set of opinions that were offered is that the answer to the above questions is very much dependent on how NHI will be implemented – there is not a problem in the legal construct but in the practical implications and implementation. If NHI rates (used for contracting with GPs and other specialists) are reasonable, it may not impact freedom of trade. Potential constitutionality issues arising with this section are rooted in execution. How will we protect the system as it stands? Does a right arise from the status quo? How do we protect current rights?

Some legal experts believed the way the Bill is currently drafted does not create any conflict with Section 22 of the Constitution. They said there is nothing in the Bill that suggests that someone who wants to be a doctor and work in the private sector can’t work there. They expressed the opinion that the Bill, as currently constituted, was written as mainly a funding bill that may have some service design implications.

There was, however, disagreement between experts. Some experts felt this particular section of the Constitution had more force with regards to the Bill than previous sections highlighted in this report. In thinking about restrictions on trade, the whole healthcare profession (not limited to the private sector) should be considered. Professions cut across both sectors and NHI may imply restrictions on the ability to trade freely and work for an employer of choice.

Again, it was recommended that the Bill should be reviewed in terms of the current situation (what is currently being proposed) and what the realisation of these proposals are likely to look like. The Bill does not set out the future details of the private sector but mainly focuses on the public sector. Which assumptions underlie what the private sector is envisaged to look like? The Bill should be more forthcoming with private sector aspects of the health sector. The lack of details on the private sector leads to varied interpretations of the Bill: in some cases it refers to the private sector or where there isn’t sufficient infrastructure it mentions purchasing and obtaining infrastructure from the private sector. It was argued that the lack of clarity around the private sector in the NHI Bill has created much uncertainty and speculation about what the future is likely to look like.

Potential infringement of the NHI Bill on Section 25:

The right to property

The Bill does away with a medical scheme’s ability to provide and charge for services rendered under the NHI regime through Section 33 (cited earlier). This, it is argued, may constitute an “unlawful infringement of a medical scheme’s right to property”, which is specifically prohibited by Section 25 of the Bill of Rights (Kirby, 2016).

There was consensus amongst participants that stating that the NHI infringes on the right to property is a weak argument. While the

NHI Bill may revoke the right of medical schemes to render financing for comprehensive health services, there is nothing in the Bill to suggest that it will appropriate the assets of medical schemes. However, the bill is suggesting that medical schemes will no longer be able to provide to their clients base the full suite of medical scheme products. Furthermore, the state has the right to appropriate service delivery in certain areas, for example housing. This does not, however, preclude the private sector from also providing housing.

The question(s) being posed to Counsel from this section include: • Given the information presented on the NHI Bill in this section and from the roundtable report (earlier section), do concerns about the NHI Bill relative to Section 25 of the Constitution have legal merit? • Would the diminishing of the right of medical schemes to provide products to their clients/members not imply an expropriation of assets?

Issue about the NHI Bill’s specific exclusion of applicability of the Competition Act of 1998

The NHI Bill (National Department of Health, 2019) excludes the NHI Fund and related activities from the ambit of the Competition Act:

“S3(5): The Competition Act, 1998 (Act No. 89 of 1998), is not applicable to any transactions concluded in terms of this Act.”

While participants thought this will be helpful for the functioning of the private health sector by enabling collective price bargaining, this section in the Bill needs to be made clearer. More specifically, it needs to clearly stipulate the rationale for why the exclusion is required. Participants argued that many of the problems in the healthcare sector, including the absence of proper pricing guidance, were caused by the Competition Act and the section which excludes the Bill from the Competition Act was merely intended to address this shortcoming. Roundtable participants concluded that in principle the NHI Bill’s exclusion from the ambit of the Competition Act was a non-issue.

Potential infringement of the NHI Bill on Section 36: “The rights in the Bill of Rights may be limited only in terms of law of general application to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors, including...”

There is a suggestion that the Bill may fall short of the limitations clause contained in Section 36 of the Constitution, which states that “the rights in the Bill of Rights may be limited only to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors, including … (d) the relation between the limitation and its purpose [and] (e) less restrictive means to achieve the purpose”.

It was mentioned that there are major concerns around the Bill’s ability to meet the requirements of rationality and being justifiable, given the potential infringements on rights. A restriction of rights needs to be clearly substantiated. How does NHI set out to achieve health systems objectives?

The limitations in this section cannot be abused. In weighing whether there are less restrictive means to achieve the purpose, limitations have to be understood relative to those in other open, democratic societies. However, ultimately the limitation clause can work in

To the extent that proposals are currently linked to dates (Chapter 9 of NHI Bill) and that the Minister can determine that the NHI is fully implemented, there are irrational elements contained in the Bill. It was argued that the implementation of NHI should be linked to clear, measurable milestones which should be referred to in the Bill (rationality argument). There was a strong opinion in the group that if a landing point cannot be found for the implementation issue, the bill can be rationally challenged.

General issue: Vagueness and non-specific nature of the Bill

The discussion on the Bill’s vagueness was introduced through a question on whether the Bill is so vague that it can challenge the notion of the rule of law. Is there a legal precedent that could show the way in terms of the specificity required in a bill to allow for implementation? It was agreed that there will always be an element of uncertainty. But the question still remained: What is the legal test for certainty and predictability?

Administrative law could provide a lens/solution to this question. Ultimately, the policies and implementation approaches may matter more than the law itself. For the NHI project to be successful, concerns about the vagueness of the law, and therefore potentially also the vagueness of supporting implementation policy, have to be internalised to the system (Section 33, Rights of Just Administrative Action). There are standards to this, but their application makes a huge difference.

Emerging issue: Intergovernmental relations in the Bill

A further area of concern with the Bill is that it does not clearly deal with the issue of inter-governmental relations; in particular, with provincial competence and the split in service delivery responsibilities between the various levels of government – national, provincial and municipal. It is not clear what the immediate implications are.

The most relevant Section of the NHI Bill (National Department of Health, 2019) is in Section 32:

“S32(2) Subject to the transitional provisions provided for in section 57, the Minister may introduce in Parliament proposed amendments to the National Health Act for the purpose of centralising the funding of health care services as required by this Act, and in such cases the Minister may—

(a) delegate to provinces as management agents, for the purposes of provision of health care services, and in those cases the Fund must contract with sections within the province such as provincial tertiary, regional and emergency medical services;” This type of intervention into a distributed function will have real implications for constitutionally allocated responsibilities, specifically also around procurement (Section 217).

3. Discussion of constitutionality issues at a roundtable of constitutional and legal experts

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BRIEFING DOCUMENT: Potential Constitutional issues arising from the proposed NHI in SA