South Africa’s Healthcare Crisis
The R2 billion looted from Tembisa Hospital tells you everything about South Africa’s healthcare governance crisis. This money could have saved lives. Instead, it bought Lamborghinis, luxury properties in Sandton and Cape Town, and enriched officials earning modest salaries who somehow pocketed R30 million each.
The Special Investigating Unit’s September 2025 interim report exposed three coordinated syndicates. Fifteen officials were involved in corruption, money laundering, and bid rigging. The number will rise as investigations continue. This fraud occurred between 2018 and 2023 at a single 840-bed hospital. The calculation is devastating: R2.3 million stolen per bed.
This is the context in which South Africa debates the National Health Insurance. The question is not whether universal healthcare is needed. The Constitution guarantees it. The question is whether any system can succeed when governance failures enable theft at this scale.
The Healthcare Divide: Cause or Consequence?
South Africa operates a two-tier system. About 16% of the population has private medical insurance consuming over 50% of total healthcare expenditure. The remaining 84% rely on an underfunded public system. Around 80% of doctors work in the private sector.
How this divide arose is contested. NHI supporters argue the two-tier system perpetuates structural inequality, with resources flowing to private care for the privileged few while the majority suffers. Critics argue the opposite: the public system failed first, forcing those who could afford it to seek private alternatives. Private healthcare emerged to fill a gap that government created through mismanagement.
Both perspectives contain truth. What’s clear is that this division leaves most South Africans without adequate care. What’s debated is whether fixing this requires dismantling the private system or fixing the public one.
The Corruption Reality
Tembisa is not isolated. The Digital Vibes scandal cost R150 million. Medical claims against public hospitals now exceed R120 billion. The SIU analyzed 2,207 procurement bundles at Tembisa and found serious maladministration. Expenditure jumped from R315 million in 2018/2019 to R979 million in 2021/2023. It dropped 73% when investigators arrived.
Officials earning R462,972 annually received R30 million in corrupt payments. A clerk pocketed R2 million. An assistant nurse received R7.3 million. The fraud operated through false documents, inflated invoices, and goods that never arrived. None of the transactions resulted in actual deliveries. All money flowed through front companies.
Meanwhile, public hospitals face critical shortages. Equipment is outdated or non-existent. Infrastructure crumbles. Staff are overworked and underpaid. Patients sleep on floors. In 2023, approximately 1,000 qualified doctors had no jobs while 800 positions remained unfilled due to budget constraints. Medical scheme membership has stagnated at 15.7% of the population since 2002.
The National Health Insurance Proposal
President Ramaphosa signed the NHI Bill into law on May 15, 2024. The Act establishes a single national health insurance fund as the sole purchaser and payer of healthcare services. Implementation will be phased from 2024 to 2028.
Key elements:
- Services free at point of care
- Funding from general taxes, mandatory employer contributions, and payroll taxes
- Medical schemes restricted to complementary cover only
- 90% of healthcare administration shifts from provinces to the central NHI Fund
- Private providers must contract with the NHI Fund
Setup costs range from R156 billion to R450 billion.
Why NHI Supporters Believe It Works
Constitutional imperative: Section 27 guarantees everyone the right to healthcare. The current system violates this. Access depends on ability to pay, not medical need.
Addressing inequality: A minority enjoys world-class private care while the majority struggles. The NHI creates a single system for all.
Affordability: Thailand achieves universal coverage at 2.7% of GDP. South Korea’s phased approach cost 4.5% of GDP. Using these models, South Africa’s cost would range from R189 billion to R315 billion annually. Even higher estimates of R750 billion to R890 billion remain feasible compared to alarmist R1.3 trillion projections.
Efficiency gains: Bulk procurement could save 10% to 15% annually (R67 billion to R139 billion). Single-payer systems reduce administrative overheads to 3% to 8% of total expenditure.
Private sector integration: The NHI will procure services from both public and private providers, using the strengths of both sectors.
Public sentiment: The South African National Health and Nutrition Examination Survey found that over 80% of healthcare users considered NHI a top priority. However, trust in government to run the scheme differed sharply: 79.2% of public healthcare users trusted government compared to only 48.9% of private medical scheme members. This trust gap reflects the governance concerns that dominate the debate.
Why Healthcare Professionals Are Concerned
The Universal Healthcare Access Coalition, representing more than 25 healthcare organizations, calls the NHI Act deeply flawed. Their concerns are practical:
Governance failures: The same officials who allowed R2 billion to be stolen from Tembisa will administer the NHI Fund. The public system fails due to institutionalized corruption. The NHI centralizes control without resolving fundamental problems. You cannot build a national health system on a foundation of corruption.
Funding uncertainty: Estimates range from R189 billion (optimistic) to R890 billion (realistic) to R1.3 trillion (worst-case). South Africa already spends 8.4% of GDP on healthcare with poor returns. The tax base is small. Corruption drains billions. New taxes will burden citizens already struggling with unemployment and inflation.
Implementation capacity: Public hospitals are characterized by bad administration, insufficient budget, inadequate infrastructure, and insufficient drug supply. The NHI assumes these problems will resolve during implementation. How will centralization fix problems caused by poor management?
Brain drain risk: Healthcare professionals fear emigration will accelerate. Further restrictions may push more doctors to leave. The system collapses without skilled professionals.
Lack of detail: The Act provides limited specifics about benefits packages, payment mechanisms, and accreditation standards.
International Lessons
Brazil adopted universal healthcare in 1988. The system covers all treatments for all residents. Brazil spent 9.89% of GDP on healthcare in 2021. However, many citizens buy supplemental insurance for faster, higher-quality care.
Thailand launched universal coverage in the early 2000s. The nation spent 5.16% of GDP on healthcare yet achieved over 98% coverage. Thailand became the first Asian country to eliminate HIV transmission from mother to child.
Taiwan implemented National Health Insurance in 1995, achieving remarkable efficiency at approximately 6% of GDP.
Countries that succeeded shared common elements: strong political leadership, gradual implementation building on existing systems, investment in primary healthcare, addressing governance and corruption before scaling up, and sustainable financing matched to economic capacity.
South Africa lacks most of these prerequisites.
The UHAC Alternative
The Universal Healthcare Access Coalition proposes a different approach: healthcare for the impoverished remains free and tax-funded, while higher-income groups contribute through mandatory insurance. This avoids dismantling provincial systems or creating a centralized fund.
Key elements:
- Mixed funding model with medical scheme contributions and general taxes
- Mandatory coverage for people earning above a threshold
- Pooled risk management at national level, decentralized purchasing
- Independent governance for public hospitals to address corruption
- Immediate implementation possible
UHAC claims this delivers improvements within three to five years. The NHI could take over a decade.
Critics note mandatory private insurance may entrench the two-tier system, raise affordability questions for lower-middle-income earners, and protect private sector profits over public health needs.
Success Demonstrates Capacity
Despite challenges, South Africa has achieved notable successes. The HIV/AIDS treatment program reaches 5.5 million people. The COVID-19 vaccine rollout administered 25 million doses. Academic hospitals in Johannesburg, Cape Town, and Durban maintain world-class standards and attract patients from across Africa. The private healthcare sector ranks among the best globally.
These successes share common elements: clear objectives, adequate funding, competent management, and accountability. When governance works, South African healthcare delivers quality results at scale.
The Way Forward
South Africa cannot wait while debates continue. People die while politicians argue. However, rushing into either approach without addressing fundamentals guarantees failure.
Non-negotiables for any approach:
Fix governance first: No system functions with Tembisa-level corruption. Strengthen accountability. Prosecute corrupt officials. Protect whistleblowers. Create independent oversight. This is the foundation.
Start with primary healthcare: Most needs can be addressed at this level. This is cost-effective and improves population health.
Retain healthcare workers: Fill vacant positions. Improve salaries and conditions. Create incentives for rural practice. Brain drain dooms any reform.
Ensure transparency: Make all expenditure public. Publish performance metrics. Allow independent audits.
Pilot and adapt: Test reforms in selected areas. Monitor closely. Scale what works. Abandon what fails.
Critical choices:
The NHI emphasizes social solidarity and complete transformation. UHAC emphasizes pragmatism and building on existing systems. Both aim for universal coverage. They differ on whether centralization or incremental reform succeeds given South Africa’s governance capacity.
Possible hybrid approaches exist: start with mandatory coverage for formal sector workers, strengthen public systems for those who cannot afford schemes, gradually expand coverage, maintain both systems initially while improving governance, pool funds nationally while keeping purchasing decentralized.
Immediate actions:
- Appoint independent boards for major public hospitals
- Implement strict procurement controls and real-time auditing
- Fill critical staff vacancies
- Repair existing infrastructure and equipment
- Expand primary healthcare capacity
- Establish clear performance metrics
The Bottom Line
Universal healthcare is a constitutional imperative. Every South African deserves quality medical care regardless of income. The current two-tier system leaves the majority without adequate care.
NHI supporters present credible arguments about affordability and efficiency. International examples prove universal coverage is achievable. However, the governance challenge cannot be dismissed. The R2 billion stolen from Tembisa reflects systemic failures that enable corruption at scale.
Both the NHI and UHAC proposals aim for universal coverage. The NHI offers true transformation but requires governance capacity South Africa may lack. UHAC offers immediate implementation but may perpetuate inequality.
Neither approach guarantees success. Both require addressing corruption first. The choice is between different paths with different risks.
As healthcare leaders, your role is critical. Evaluate options based on evidence, not ideology. Demand accountability. Advocate for reforms that work in South Africa’s context.
The Tembisa Hospital scandal demonstrates the urgent need for governance improvements. It does not prove universal coverage is impossible. It proves that any system, centralized or decentralized, public or private, will fail without accountability.
The poor cannot wait for perfect conditions. They need functioning hospitals now. They need medicine, equipment, and healthcare workers now.
South Africa has demonstrated capacity for large-scale healthcare interventions. The HIV treatment program and COVID-19 vaccine rollout prove capability exists when properly managed.
The challenge is choosing the right path and executing it well. This requires honest assessment of current capacity, learning from international experience, and addressing governance failures that enable corruption.
Whether through the NHI, the UHAC proposal, or a hybrid approach, universal healthcare must become reality. The question is how, not if.
The stakes are too high for ideological posturing or protecting vested interests. Lives depend on getting this right.