South Africa announces drastic healthcare shakeup

South Africa on Thursday unveiled details of a new universal health insurance plan aimed at improving healthcare for the poor in one of the world's most unequal nations.

A new National Health Insurance (NHI) scheme will use compulsory contributions from employers and employees and is expected to be operational by 2026, Health Minister Aaron Motsoaledi told a news conference.

He said the changes were necessary to close the gap between wealthy South Africans, who have access to excellent private care, and the poor who are dependent on often understaffed and under-resourced public facilities.

"All South African citizens must have access to private and public health care," said Motsoaledi.

"The cost of private health care is out of reach."

Just 8.8 million of South Africa's 56 million people have access to private medical care with the rest entirely dependent on the state.

Motsoaledi said South Africa spends 4.5 percent of GDP on private care for 16 percent of people while the public sector spends 4.2 percent of GDP looking after 84 percent of the population.

"The rich must subsidise the poor, the young must subsidise the old and the healthy must subsidise the sick," he said.

Motsoaledi said that would require "massive reorganisation" of both public and private care as he presented a series of bills to be debated by parliament.

The cost of the new scheme will likely fall on taxpayers, employers and the private medical insurance industry.

"We have privatised health care more than the US," said the minister, adding that South Africa had been "completely out of sync with the rest of the world".

The dramatic shakeup comes at a time of intense crisis in the public healthcare system which is battling doctor shortages, industrial turmoil and growing waiting lists.

"(We are) very much alive to the problems of poor quality and lack of efficiency in the public health care system," said Motsoaledi.