Discovery Limited Group CEO Adrian Gore at the company's annual results presentation. Picture: FREDDY MAVUNDA
Discovery Limited Group CEO Adrian Gore at the company's annual results presentation. Picture: FREDDY MAVUNDA

Discovery CEO Adrian Gore says implementing National Health Insurance (NHI) is fatally challenged by a lack of financial and medical resources.

NHI is the government’s policy for implementing universal health coverage, which aims to ensure everyone has access to quality services that are free at the point of care.

While an appropriately funded and well-functioning NHI will be a step forward for the country, “I think at the core of the issue is that we don’t have the resources ... as a country to implement universal NHI, whether it be financial or healthcare resources,” Gore said.

He was speaking at the presentation of the group’s annual results for the year ending June.

Gore presented analysis on the implications of funding NHI that showed the average monthly healthcare spend per person by members of medical schemes is about R1,726 versus just R372 spent by the government on behalf of people accessing the public health system.

Were the government to pursue the most comprehensive version of universal health care and replace the R206bn made in contributions to private medical schemes through contributions to NHI via higher taxes, the average spend on health care per person per month would only rise to R576.

In terms of outcomes, this is still a long way off the resources required to maintain a world-class healthcare system. By contrast, the UK’s National Health Service spends the equivalent of R1,702 per person per month, implying that the R576 spent per month under NHI would fall far short of the level of care provided by the NHS.

“A well-functioning NHI that is affordable for the country is a good thing, but we think private medical schemes must continue to exist alongside the NHI. That is how every other country with NHI systems works, and I think that is a sustainable model,” he said.

The increase in taxes required to fund NHI would mean raising corporate taxes by about 80% and personal income taxes by 40%, Gore said.

“If we are going to have an NHI that is appropriately funded and well run, we have to accept that society is going to pay more for it. This means paying more taxes towards the NHI, and for those that can afford it, purchasing health insurance through private medical schemes,” he said.

Discovery’s share price plummeted earlier in September after the release of a draft National Health Insurance Bill by health minister Zweli Mkhize, from R127 to R100 per share. It has since begun to recover and closed at R114.45 on Wednesday.

Gore warned that it will take time to find the optimal solution.

“I think that all stakeholders will engage and find a path that is workable because it is a complex issue and it’s going to be a multiyear, if not a multigenerational, project to meet the needs of everyone,” he said.

Discovery’s normalised headline earnings per share declined 8% to R7.71 in a year characterised by “considerable complexity” for the group.

Normalised operating profit declined 3% to R7.74bn largely due to a 9% decline in profits from Discovery’s largest contributor, Discovery Life.

thompsonw@businesslive.co.za