Industry News

Referred to headquarters

03 July 2008

In Categories: Industry News , Industry News > Patients

THE private hospital industry, under siege from the Department of Health, has turned to Luthuli House and is finding a much more favourable reception from the post-Polokwane ANC writes Shoks Mzolo & Thebe Mabanga, Financial Mail, 4 July 2008.

The need to involve the ANC follows a complete breakdown between the department and private hospital groups over the draft bill to cap healthcare prices. The private sector warns that the bill, if passed, would frighten investors and healthcare professionals alike.

Department of Health director-general Thami Mseleku singles out high prices at private hospitals as the main reason why their services are not accessible to the poor.

However, Hospital Association of SA (Hasa) acting chairman Nkaki Matlala, a surgeon and clinical relations executive at Medi-Clinic, says pricing is not really the issue. The industry is simply not allowed to present its case by an abrasive department that is not listening to its suggestions to make healthcare more accessible and affordable.

This prevents the sector from discussing pricing concerns with Health Minister Manto Tshabalala-Msimang and puts paid to hopes for a cordial engagement with the department, Matlala asserts.

When Mseleku attended the Hasa conference last month he was on the defensive. The bill, which seeks to encourage pricing transparency in the healthcare industry, sets the scene for price negotiations between medical aids and healthcare providers like private hospitals. Medical aids, which cover 7,5m lives, feel the bill will help shore up their negotiating muscle.

The Department of Health has taken sides with the funders and the hospitals are fighting back by contending that 77% of the funding industry is concentrated in the hands of just three firms - Discovery, Metropolitan and Medscheme - a fact that undermines their claim of being at the mercy of the hospital networks.

High administration and broker fees at medical schemes also inflate premiums, but this eludes the Department of Health, argues Hasa.

Hasa met senior ANC officials led by Zweli Mkhize, who chairs the party's health subcommittee, in June. Another meeting is likely later this month.

Mkhize called for a "win-win" relationship to ensure the sustainability of the country's private and public healthcare sectors. Mkhize has taken up the case against non healthcare fees and warns that "regulation of medical schemes is inevitable".

This has set alarm bells ringing at the Board of Healthcare Funders (BHF), the umbrella body for the medical aid sector. BHF MD Humphrey Zokufa concedes that the sector is faced with challenges preventing it from spreading its reach.

Mkhize and the chairman of the parliamentary health committee, James Ngculu, should be wary of taking one side over another in the extremely complex case of pricing private healthcare.

But unlike previous interventions by Hasa, Ngculu has at least taken note of the association's suggestions and is now soliciting government's opinion on these.

Hasa CE Kurt Worrall-Clare laments that "everything we say is viewed with suspicion by the department".

He believes that Hasa's proposals would make a difference to public healthcare through increased involvement in training. Hospitals could also support licensed training colleges, while public-private partnerships (PPPs) should be extended to all hospital operations, not just infrastructure provision.

Mseleku says PPPs are not a panacea, arguing that government can end up paying more for running such partnerships, though Ngculu counters that "it is not necessarily always the case", without elaborating as the bill has not yet come before the portfolio committee.

Meanwhile, the Democratic Alliance has released alternative proposals, including treating hospitals as independent entities and administering discretionary grants in the same way that universities are funded. Hospital management should also be put out to tender, with the beleaguered Frere hospital in the Eastern Cape top of the list.

Shoks Mzolo & Thebe Mabanga: The Financial Mail, 4 July 2008 (abbreviated)