Building the case for day hospitals
They make healthcare more affordable say proponents, but are still underutilised locally
It is not in a leafy, tree-lined suburb or a slick urban centre. Instead, the Advanced Soweto Day Hospital in Protea Glen is its own small island of calm, overlooking the busy R588. Next door is a bustling industrial operation called Big Sky Construction.
Inside, the hospital is compact and modern, and the queue in the waiting room to see specialists appears to move along steadily. The children’s ward is a sunny little room with yellow Minions characters dotting the beds.
The hospital opened as a specialist eye clinic in 2016 but early this year it became a fully licensed general day hospital, which, along with ophthalmology, also offers a number of other treatments ranging from gynaecology and orthopaedic surgery services to gastroenterology procedures.
As a day hospital, it provides sameday surgical procedures, and the limited time spent in the hospital helps to reduce costs.
Advanced Health — which owns the Soweto facility — is one of a growing number of private day hospital providers in South Africa, although the idea of a day facility is still relatively unfamiliar to patients.
The major private hospital groups such as Mediclinic and Netcare have long dominated private hospital care in the country.
But the steep increases in private healthcare costs have come under the spotlight, most notably with the healthcare market inquiry led by the Competition Commission.
Costs, and the vastly uneven distribution of access to healthcare for most South Africans, are also at the heart of the push towards setting up the National Health Insurance scheme.
Sarah Ndzimande, the hospital’s marketing manager, gives the example of her own family’s experience: “My uncle was one of the patients here,” she recounts.
“They live in Limpopo and they remembered I work in a day hospital. [My uncle] was due to go to hospital to get a cataract removed and it was going to cost R30000. They asked me if it could be done for less here. I said: ‘Absolutely.’ ”
Her family drove from Limpopo to get the procedure done in Soweto, where the surgery cost about half the price.
But, says Ndzimande, there is still work to be done to educate patients, general practitioners and specialists about the advantages of using day hospitals.
The role that hospital costs play in making private healthcare increasingly unaffordable is a debate that repeatedly emerged in the Competition Commission hearings.
According to the latest report from the Council for Medical Schemes, during the 2015-2016 financial year, spending on hospitals by medical schemes made up the greatest portion — almost 40% — of spending on healthcare providers.
Medical schemes paid R51.4-billion to hospitals out of a total amount of R138.6-billion. This was a 9.36% increase on the previous year, when medical schemes spent about R46.8-billion on hospital care.
According to the council, in-patient admissions constituted about 88% of the R51.4-billion paid to hospitals, and same-day in-patient admissions constituted 12%.
A report from the Organisation for Economic Co-operation and Development (OECD) and the World Health Organisation, presented to the Competition Commission inquiry early last year, found that South Africa’s private hospital services were comparable to those of OECD countries that are considerably wealthier, such as the United Kingdom, Germany and France.
At the same time, prices for other goods and services in South Africa were 53% lower than those of OECD countries, the report found.
The study has, however, been disputed by medical schemes as well as the Hospital Association of South Africa.
Nevertheless, the commission did its own cost attribution analysis of cost drivers in the private healthcare sector. Its research — examining five years of medical scheme claims data — showed that overall costs for a medical scheme member had increased by 9.2% a year.
The commission found that inhospital care was an important driver in the unexplained increases each year. And the trend was in “sharp contrast” to the flat or declining hospital-based spending in many countries.
The commission noted that there had been a sharp increase in the total cost-per-hospital admission, which it suspected was as a result of an “increasing intensity of care for the same condition” — for example, the length of stay, use of intensive care units and use of consumables.
But, says Bibi Goss-Ross, the group operational manager at Advanced Health, day hospitals represent a viable way to contain these cost increases.
About 70% of the surgical procedures that are being done at what are known in the medical sector as acute hospitals can be done at a day hospital, she adds.
For example, data from 2014 showed that a routine tonsillectomy for a child cost a medical scheme about R11 000 in an acute hospital, as opposed to the R8 000 it cost in a day hospital, according to Goss-Ross.
The risk in these fairly routine procedures being done at an acute facility, she says, is that it can become too convenient for doctors to extend a patient’s stay.
Even a simple overnight stay can cost an extra R2 000 in accommodation alone, adds Goss-Ross.
It requires a “mind shift” from surgeons and specialists, she argues, and it takes a concerted effort to convince them to refer patients to day hospitals or attract them to these facilities.
But attitudes are steadily changing and South Africa now has about 50 day hospital facilities, according to the Day Hospital Association of South Africa.
Major medical schemes are also becoming more supportive of day hospitals. Discovery Health’s chief executive, Dr Jonathan Broomberg, says the scheme encourages the use of day clinics because they have the potential to improve efficiency.
It has done this with scheme benefits as well as paying doctors more when they do procedures at day clinics, he notes.
Discovery introduced a day surgery network in some of its product offerings in 2011. In 2013, it authorised day hospitals to perform all day surgery procedures, according to a presentation made in late 2016.
Day clinic admissions represent 5% of all admissions, according to Discovery. Although still low, this has doubled since 2008. The total cost of day-clinic procedures is generally lower than in a general hospital. For example, for tonsil and adenoid procedures the average cost is about 40% lower in a day clinic.
“Members benefit from using day clinics through medical aid premiums over time,” says Broomberg.
There can also be risks to remaining in hospital longer than is required, such as a risk of infection, he adds.
As private healthcare costs have increased, medical schemes have noticed a steady pattern of buying down — with members buying more cost-effective benefit packages.
At the same time, according to the association, day hospitals can help to create alternative low-cost options to cater for employed people who are not insured.
In the case of the Advanced Soweto Day Hospital, about 80% of the patients have medical aid, comprising primarily lower-income medical scheme options.
The use of day hospitals is far higher in other countries, such as Australia, which has 300 private day surgeries as opposed to 270 private acute hospitals.
Day hospitals could also relieve the overburdened public healthcare sector, says Goss-Ross.
Advanced Health is already working with the South African National Defence Force by taking an overflow of orthopaedic patients from its military hospital in Pretoria.
Talks are under way to provide similar services in the case of ophthalmic surgeries, says Goss-Ross.
But competition in the industry, particularly between day hospital networks and the major hospital groups, is a sticking point.
In a presentation made to the commission’s healthcare market inquiry, the day hospital association argued that licences issued for day hospitals had been evaluated based on the number of existing hospital beds in a catchment area rather than for economic reasons, making day hospitals’ footprint less competitive.
It has called for new licences to be granted to independent service providers first, instead of to existing large hospital groups.
This is a particular frustration for Goss-Ross, who argues that day hospitals can work in synergy with acute hospitals where hospital beds are in short supply.
“The ideal location for a day hospital is next to a busy hospital,” she says.
The savings that day hospitals represent cannot be ignored, adds Goss-Ross.
And although cost efficiency is important, says Goss-Ross, patient care is still the main priority at Advanced Health hospitals. There are no fixed closing times at these establishments.
“It is based on patient convenience,” she says. “We leave when the last patient is stable enough to go home.”