Business Day

Alert over botching of hospital licences

• Healthcare market inquiry suggests new regulatory regime for facilities

- Tamar Kahn Science and Health Writer kahnt@businessli­ve.co.za

Provincial health department­s are doing such a poor job of issuing operating licences to private hospitals that they are stifling competitio­n and potentiall­y depriving patients of cheaper and more innovative care, the Competitio­n Commission’s healthcare market inquiry warned.

Provincial health department­s are doing such a poor job of issuing operating licences to private hospitals that they are stifling competitio­n and potentiall­y depriving patients of cheaper and more innovative care, the Competitio­n Commission’s healthcare market inquiry has warned in a document published on Wednesday.

It has suggested a new regulatory regime for licensing healthcare facilities that is likely to stir the pot with both provincial health department­s and private hospitals.

Not only is it proposing a national set of rules that eliminate provincial health department­s’ powers to set their own licensing criteria but it also suggests that provinces consider the need for the services offered when considerin­g whether to award hospital licences.

Many licences seem to have been awarded in markets with “excess capacity” and many areas remained underservi­ced, it said.

The system has created a submarket for the sale of hospital licences, but changes in ownership are not scrutinise­d by provincial health department­s or the competitio­n authoritie­s, it said. “This may impact on competitio­n and present a distorted picture of the market,” it warned.

The inquiry was establishe­d to investigat­e the dynamics in the private healthcare market and to determine whether there are barriers to competitio­n and patient access.

Private hospitals are required to obtain operating licences from provincial health department­s before they can open new facilities or extend existing ones. Two years ago, private hospitals presented evidence to the inquiry’s hearings, arguing that the current licensing processes were a barrier to entry and expansion because provincial department­s take different approaches and use different criteria to evaluate applicatio­ns.

Seven of the nine provincial health department­s use regulation 158 of the Health Act, but the Western Cape and the Free State provincial department­s have enacted their own regulation­s.

The inquiry also heard that the cost-effectiven­ess of day hospitals and other more effective ways of delivering healthcare services were not considered in the licensing process.

In its discussion document the inquiry agreed that the use of different regulation­s by the provincial department­s created inconsiste­ncies in the interpreta­tion and applicatio­n of the licence regulation­s.

It said regulation 158 had been drafted with acute facilities in mind, so it limited the establishm­ent of facilities that could introduce innovative and costeffect­ive models of healthcare.

During the public hearings the inquiry quizzed provincial health department­s on the oversight they exercised over private hospitals, suggesting they could use their licensing powers to influence behaviour and improve the quality of healthcare. It noted in the discussion document no conditions were attached to licensing such as obligation­s to report on quality, bed occupancy or the management of state employees who did private sector work.

“These are reasonable expectatio­ns of features of wellregula­ted healthcare markets, internatio­nally, which currently do not exist in the South African market,” the inquiry said.

Provinces should be required to collect data from healthcare facilities, report at national level, and withdraw licences from facilities that failed to make the grade, it said.

Rational planning for new facilities could only take place if there was accurate data on bed numbers, levels of care and occupancy levels, it said.

It is also proposing that the awarding of practice numbers, which are used for billing purposes, be done with the awarding of licences. Practice numbers are managed by the Board of Healthcare Funders.

THIS MAY IMPACT ON COMPETITIO­N AND PRESENT A DISTORTED PICTURE OF THE MARKET

 ?? /Sowetan-Sunday World ?? Clipped wings: Provincial health department­s will lose their powers to set their own hospital licensing criteria if proposals by the Competitio­n Commission’s healthcare market inquiry for the institutio­n of a national set of rules are enacted.
/Sowetan-Sunday World Clipped wings: Provincial health department­s will lose their powers to set their own hospital licensing criteria if proposals by the Competitio­n Commission’s healthcare market inquiry for the institutio­n of a national set of rules are enacted.

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