Discovery CEO slams ‘flawed’ NHI Bill as their share price tumbles

Discovery’s share price took a tumble on Tuesday after the NHI bill was announced. Adrian Gore, the CEO of Discovery, has come out and called the bill flawed. Photo: Leon Nicholas/Independent Media.

The Discovery group chief executive Adrian Gore said on Tuesday that he saw the National Health Insurance (NHI) Bill as flawed and that it would take decades to implement the universal healthcare system.

Gore said the NHI Bill was flawed and given the number of expected legal challenges coming down the pipeline it could take decades before it is implemented.

“We see no scenario in which there is sufficient funding for a workable and comprehensive NHI in its current form, hence our conviction that private sector collaboration is vital, and that full implementation of the bill remains a long way off, likely decades,” Gore said in a statement.

The Discovery CEO said that he sees several major flaws in the bill and this will probably mean the bill has to change on various fronts.

“Significant flaws in the bill and the legislative processes followed in promulgating the bill, will also likely result in the bill being challenged on numerous fronts, leading to further likely delays.

“The NHI is an inordinately large and complex initiative requiring considerable planning and preparation before it can be implemented,” he said.

Gore said that the largest challenge to the NHI bill is undoubtedly obtaining funding.

“The largest barrier to implementation of a workable NHI is funding.”

“There is no funding plan yet and, given the country’s constrained fiscal position, low economic growth, and narrow tax base, this can only be solved in the longer term,” he added.

Share price

On Tuesday, Discovery’s share price took a huge knock after President Cyril Ramaphosa announced that he planned to sign the legislation into law on Wednesday. He is expected to sign the bill in Pretoria at 2pm.

On Tuesday, Discovery’s share price was down by around 7.4% in afternoon trade. It was trading at around R107.21 at the close of business.

The share has since recovered somewhat and was trading at around R109.47 on Wednesday morning.

Over the last seven days, the share price has dropped by 8.45% in intraday trade.

Business Unity South Africa

Gore and Discovery are not the only critics of the new bill. Business Unity South Africa (Busa) said on Monday that it was concerned that Ramaphosa would be signing the NHI Bill into law on Wednesday, given it had so many substantive and procedural constitutional flaws.

The organisation said that the legislation, in its current form, is unimplementable and damaging to the country’s healthcare sector, to the economy more broadly and to investor confidence.

“We fully support the objective of universal health coverage, however, the NHI Bill in its current form is unworkable, unaffordable, and not in line with the Constitution.

“What is especially troubling is that the president is proceeding with the bill despite extensive constructive inputs made by a wide range of stakeholders, including doctors and healthcare professionals, civil society, public sector unions, academics and business,” Cas Coovadia, the CEO of Busa said in statement.

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