Ex­pen­sive but world class

More fo­cus on age­ing profile needed

Finweek English Edition - - Healthcare - COPY: Wilma de Bruin AD­VER­TIS­ING: Joey van Dyk, Mar­ius Wilken

OF THE R16,1BN med­i­cal schemes paid for hospi­tal ser­vices in the 2005-2006 fi­nan­cial years, private hos­pi­tals re­ceived R15,9bn – an in­crease of 3,9%, ac­cord­ing the latest an­nual re­port of the Coun­cil for Med­i­cal Schemes (CMS). While the in­dus­try is still await­ing the coun­cil’s re­port on its in­ves­ti­ga­tion last year into private hospi­tal costs, Kurt Wor­rall-Clare, CEO of the Hospi­tal As­so­ci­a­tion of South Africa (Hasa), ex­am­ines the private hospi­tal in­dus­try and the chal­lenges fac­ing it.

DE­SPITE BE­ING a de­vel­op­ing coun­try, South Africa has sim­i­lar prob­lems to those of de­vel­oped coun­tries, and in the years ahead, the private health­care sec­tor will in­creas­ingly be crit­i­cised for uni­ver­sal rea­sons of­ten be­yond its con­trol, such as med­i­cal in­fla­tion and an age­ing pop­u­la­tion.

The med­i­cal in­sur­ance in­dus­try, health­care per se and per­haps also the econ­omy as a whole, are not pay­ing enough at­ten­tion to South Africans’ age­ing profile.

The CMS has dis­puted this on the ba­sis that the av­er­age age of med­i­cal scheme mem­bers hasn’t changed much in re­cent years and has cal­cu­lated that it stands at 32, based on the to­tal age di­vided by the to­tal num­ber of med­i­cal scheme ben­e­fi­cia­ries.

How­ever, this cal­cu­la­tion is flawed and should rather be based on the num­ber of ben­e­fi­cia­ries who ac­cess health­care, hence Hasa has used hospi­tal util­i­sa­tion fig­ures to de­ter­mine who ac­cesses health­care and the rea­sons for it.

Hasa’s study shows there has been a sig­nif­i­cant in­crease in util­i­sa­tion among older mem­bers, as well as the very young. Th­ese fig­ures will be com­pared with ICD10 codes to de­ter­mine the num­ber of car­diac and

other in­ter­ven­tions in SA’s private hospi­tal sec­tor.

Hope­fully it will be pos­si­ble to project this in terms of the econ­omy as a whole to see if there are some en­demic dis­ease pro­files. Al­ready there is some ev­i­dence of that in lifestyle dis­eases such as obe­sity, di­a­betes and mus­cu­lar-skele­tal surgery, which is a di­rect re­sult of trauma-re­lated in­ci­dents. That there are 144 000 new cars on SA’s roads ev­ery year in­evitably has a rip­ple ef­fect on the private health­care in­dus­try.

Hasa also chal­lenges the CMS in terms of its (cost) pro­jec­tions for the private hospi­tal sec­tor. A mis­take, in Hasa’s opin­ion, is that the CMS tends to con­cen­trate on the med­i­cally in­sured pop­u­la­tion.

But private hos­pi­tals do not ser­vice only med­i­cally in­sured pa­tients, and the pro­jec­tions and cal­cu­la­tions must take into ac­count the sig­nif­i­cant num­ber of ad­di­tional pa­tients out­side the tra­di­tion­ally med­i­cally in­sured pop­u­la­tion who have an ef­fect on private hos­pi­tals.

Private hos­pi­tals, for ex­am­ple, have a con­sti­tu­tional man­date to pro­vide emer­gency med­i­cal treat­ment to ev­ery­one. It is es­ti­mated that last year private hos­pi­tals paid more than R100m in fees that could not be re­cov­ered from th­ese pa­tients. It stands to rea­son that this would also have a rip­ple ef­fect in terms of the cost sta­tus of any busi­ness, and private hos­pi­tals are no ex­cep­tion.

At the same time, and on the pos­i­tive side for the econ­omy, an in­creas­ing num­ber of for­eign pa­tients are en­ter­ing SA, not for cos­metic surgery, but for qual­ity spe­cial­ist med­i­cal in­ter­ven­tions such as those ren­dered by Sun­ninghill Hospi­tal’s spe­cial­ist pae­di­atric car­diac unit.

The chal­lenge is to mar­ket South Africa more ag­gres­sively abroad as a prime health des­ti­na­tion, par­tic­u­larly at a time when two of the coun­try’s private hospi­tal groups are ac­tively ac­quir­ing fa­cil­i­ties over­seas. (Net­care’s pur­chase of 47 hos­pi­tals in the UK and sur­round­ing ar­eas has po­si­tioned an SA com­pany as a global player and as the sec­ond-largest hospi­tal net­work out­side the US, while Medi-Clinic’s ven­ture into Dubai has also helped to po­si­tion SA in terms of in­ter­na­tional health­care stan­dards. In ad­di­tion, Life also con­tin­ues to have strong ties with the UK gov­ern­ment.

Stricter con­di­tions should be ap­plied to funds do­nated to in­sti­tu­tions for bur­sary pur­poses, and fi­nances should be strate­gi­cally man­aged. If there is no suit­able can­di­date avail­able, it should not go into a gen­eral bur­sary fund but one re­stricted to health and to dis­ci­plines that are go­ing to be in short sup­ply.

Man­power short­ages will re­main a se­ri­ous chal­lenge for the private and pub­lic sec­tors. In the light of the se­vere short­age of health­care pro­fes­sion­als, the State should also se­ri­ously re­con­sider leg­isla­tive re­stric­tions and be more flexible in terms of ed­u­ca­tion by al­low­ing the private hospi­tal sec­tor to of­fer its fa­cil­i­ties and run private acad­e­mies es­tab­lished for this pur­pose. It cer­tainly has suf­fi­cient re­sources and skills. While meet­ing the needs of the in­dus­try, the econ­omy as a whole could also ben­e­fit sig­nif­i­cantly.

The gen­der bias to­wards cer­tain health­care ca­reers should also come un­der scru­tiny. Ev­ery­one, in­clud­ing par­ents, is to blame for mak­ing jobs such as nurs­ing gen­der­spe­cific, thereby ex­clud­ing it as an op­tion for boys al­though it is a global qual­i­fi­ca­tion with lu­cra­tive ad­vance­ment prospects. At the same time, the profile of nurses is also age­ing, which means they are closer to re­tire­ment. Again, leg­isla­tive re­stric­tions need to be re­vis­ited re­gard­ing private sec­tor train­ing fa­cil­i­ties.

It is also nec­es­sary to find a more ex­pe­di­ent way to reg­is­ter qual­i­fi­ca­tions: The time frames in use in the sys­tem can­not be al­lowed to con­tinue. They need to be shorter, quicker and more re­spon­sive to ac­tual needs.

Re­gard­ing cost con­tain­ment, the private hospi­tal in­dus­try should also put ad­di­tional pres­sure on sup­pli­ers to cut costs. And it should also ed­u­cate the pub­lic about some of the en­demic re­al­i­ties. For ex­am­ple, if there is a short­age of spe­cialised per­son­nel and there is com­pe­ti­tion with dol­lars and pounds in terms of salary, it is likely that salary in­creases will have to be above CPI to re­tain skills. This means private hos­pi­tals need to main­tain a fine bal­ance be­tween man­ag­ing their costs and be­ing re­al­is­tic about th­ese needs. Few peo­ple, when it comes to pay­ing their hospi­tal bills, re­alise this.

A fine bal­ance be­tween costs and needs. Kurt Wor­rall-Clare

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