Private healthcare in an NHI world
Many private hospitals will be opening their doors to more patients but does that mean you’ll be stuck at the back of the queue?
The United Kingdom’s universal healthcare system, the National Health Service (NHS), had a problem: by the early 2000s, a growing number of elderly patients were waiting up to three years for sight-saving cataract operations.
But the government-funded healthcare scheme didn’t have enough beds. It did, however, have plenty of parking.
“All we needed was a parking lot and a connection to three-phase electricity,” remembers South Africa’s Netcare chief executive, Richard Friedland.
Netcare entered the UK market 15 years ago. It operates in more than 50 private hospitals in the country, but 43% of its patients come from the NHS through the service’s electronic “choose and book” appointment system: patients elect where to go for care and the NHS pays private providers like Netcare a nationally set rate for the services it provides.
By co-operating with the NHS, Netcare helped to shorten the cataract surgery waiting lists drastically.
To do this, Netcare flatbed trucks travelled on UK highways carrying a kitted-out trailer for cataract operative. Two trailers each were dedicated to operating theatres, preoperating wards and examination rooms. Netcare offloaded these trucks in 30 NHS parking lots, where they became mobile cataract clinics as part of an NHS tender.
As the lorries cruised around six days a week and 50 weeks a year, pensioners tracked their progress online, finding out when the trailers would be in their area and then booking appointments.
Ultimately, Netcare’s cataract caravans performed more than 40000 surgeries over five years. Patients were sent home the same day and many spent just 10 minutes under the knife after surgeons reduced operating time, says Friedland, who was speaking at this week’s South African Hospital Association (Hasa) conference in Cape Town.
“Eventually, the doctors were doing 20 to 24 surgeries per day in these theatres, and they were finishing at lunchtime and going home,” said Netcare’s director of strategy and healthcare policy, Melanie da Costa, when she testified before the Competition Commission’s health market inquiry in 2016.
The UK’s past could be South Africa’s future. In June, South Africa’s health department released the National Health Insurance (NHI) white paper. The document will guide the country’s move to universal healthcare coverage — giving everyone in the country access to the same health services, regardless of their income.
Under the NHI, the government will use public hospitals and clinics to provide healthcare, in addition to buying services from accredited private providers at standard rates — much like the NHS. By doing this, the NHI will become the largest buyer of healthcare services in the country.
But the practicalities of this are still developing, and the heads of private hospital and insurance groups such as Netcare and Discovery are already thinking about what private healthcare might look like in a post-NHI world — and how they may have to change to be a part of it.
The private sector could start by following Netcare’s lead in the UK, tackling waiting lists, especially in rural areas, says Mediclinic Southern Africa chief executive Koert Pretorius. He says a percentage of these procedures could be done at below-cost prices if private hospitals could get medicines and prosthetic limbs procured at state tender prices.
Preliminary Hasa research shows that South Africa has about 525 private hospitals and most are independently run — in other words, they’re not part of large groups. Pretorius says these facilities could help to manage nearby clinics and even school health programmes under the NHI.
The country has screened more than 3.5-million pupils since Health Minister Aaron Motsoaledi resuscitated school health programmes in 2014. One in three children were found to have at least one condition relating to their eyesight, hearing or teeth, the minister said.
But the health department’s NHI adviser, Vishal Brijlal, admits no one knows how many of these children were ever treated for these ailments.
Discovery Health chief executive Jonathan Broomberg says this is a gap that private medical aid administrators could help to fill.
He explains: “[The NHI] seeks to purchase services from a wide range of providers … that’s about procurement, about understanding costeffectiveness and the cost and quality of services, analysing data and purchasing effectively.
“I’m not exaggerating when I say that the medical aid scheme administrators of this country stand out in the world for their skills, systems, data analysis capacity and their health economics capabilities. You talk today about the need to urgently look at the school health programme … I can say to you within weeks, or a couple of months at most, the private funding and delivery side could arrange those services.”
But he says a lack of trust between the public and private health sectors has stalled collaborations and both parties are to blame.
“If we had a government that was willing to say: ‘Let’s do 20 000 cataracts over the next [number of] months,’ that could be up and running in a few months. If that trust deficit could be bridged, we could benefit real people.”
Trust isn’t the only thing that would have to change under the NHI. In 2012, Netcare tried to recreate its success with mobile cataract services in the field of breast cancer with a mobile mammography unit in the Free State. Four years later, not a single patient had stepped through the van’s doors — a fact Da Costa blamed on inflexible regulations.
“We had written at least eight letters to the Health Professions Council before we got a response and we have just had multiple, multiple requests for data, presentations, and so on. To cut a long story short, we have now donated this trailer to the provincial department of health,” she told the Competition Commission.
Eleven pieces of legislation will have to be amended as the country introduces the NHI. Medical aids and private providers are also likely to see more regulation, which could stem some fears about the universal health scheme. As in South Africa, the right to health is enshrined in Brazil’s Constitution. Although the country has its version of an NHS, private medical aids still exist. But medical schemes are subject to rules such as maximum waiting periods for doctors’ visits, exams and some forms of treatment.
Denise Soares dos Santos is the chief executive of Brazil’s Beneficência Portuguesa de São Paulo — a nonprofit hospital that towers over São Paulo. Her hospital receives both private and public patients. Dos Santos says maintaining a profitable mix has meant changing everything from what they offer to how they charge for it and how they talk about it.
Dos Santos’s hospital is contracted by the city to care for public patients. But that doesn’t mean it provides all healthcare services to them. She explains: “You have to provide what you do better. Our competency is in highly complex [illnesses] — cardiologists, neurologists, oncologists and orthopaedics. Other … hospitals wanted to do everything [for] everyone, and it’s not possible.
“We focus on what we do best, and as you are able to get [more patients in these areas], you achieve economies of scale. Then we are able to buy better from suppliers.”
The hospital is also increasingly shifting to “bundled billing”, or situations in which patients are billed for a group of related services needed to treat one illness with the aim of, for example, reducing costs and promoting co-operation among medical teams. Brazil’s national public health service already uses this system — a method that might be catching on in South Africa, where many providers still bill for each service separately.
Recently, Dos Santos’s hospital changed its 158-year-old logo, an oldfashioned blue cross paired with grey lettering, for a new “BP” abbreviation in dramatic red and purple. It followed market research that showed a dearth of competitors with branding in a similar hue.
It’s one of the ways that BP is changing the way it speaks about itself and who it speaks to: both private and public clients. Public patients now make up 60% of its business. BP is also introducing sub-brands so that it can tailor messaging and education to an increasingly diverse patient pool specially.
People, she says, want quality healthcare but they also want care that can speak to them whether they are on medical aid or not.
“If the trust deficit with the government could be bridged, we could benefit real people”