Di­verse health­care across African coun­tries

RISKAFRICA Magazine - - CONTENTS - Neesa Moodley-Isaacs

The sub-Sa­ha­ran Africa health­care mar­ket is ex­pected to reach $35 bil­lion by 2016 on the back of a grow­ing mid­dle class and an im­proved eco­nomic out­look. How­ever, as more in­vestors look to Africa to boost their port­fo­lio re­turns, the health­care sec­tor is likely to see more ac­tiv­ity and cap­i­tal in­jec­tions. RISKAFRICA de­cided to in­ves­ti­gate the costs of health­care across four dif­fer­ent African coun­tries and found that this is not as sim­ple as it sounds.

Ac­cord­ing to the World Health Or­gan­i­sa­tion, South Africa is among the few coun­tries in Africa with a rel­a­tively high per capita health­care spend­ing level. In fact, it has the high­est per capita health­care spend­ing level on the con­ti­nent, al­though this largely ben­e­fits those mem­bers of the pop­u­la­tion that be­long to med­i­cal schemes. Al­lianz World­wide Care, a spe­cial­ist provider of in­ter­na­tional health in­sur­ance prod­ucts, says the stan­dard of health­care in South Africa is con­sid­ered to be the best on the African con­ti­nent, with good fa­cil­i­ties for emer­gency cases and a strong pri­vate health sec­tor.

Health econ­o­mist, Dr Okore Oko­rafor of Medi­clinic, says com­par­ing health­care costs across coun­tries is a com­plex ex­er­cise. Oko­rafor points out that there are sev­eral vari­ables that have to be con­sid­ered, which could in­crease or de­crease the cost of a pro­ce­dure in each coun­try. Th­ese in­clude:

Pa­tient char­ac­ter­is­tics such as age, gen­der, the pres­ence of co-mor­bidi­ties, and the level of com­plex­ity. Th­ese char­ac­ter­is­tics im­pact on the amount of re­sources (theatre time, hos­pi­tal days, equip­ment, medicines, nurs­ing time) that are con­sumed. This is why most com­par­isons are done across coun­tries in which health cases are cat­e­gorised ac­cord­ing to di­ag­no­sis-re­lated groups, as this al­lows for nar­row def­i­ni­tions of pa­tient char­ac­ter­is­tics.

In the South African case, doc­tors are not em­ployed by pri­vate hos­pi­tals, so this cost should be con­sid­ered when mak­ing a com­par­i­son with a sit­u­a­tion where the doc­tors’ bill is in­cluded in the hos­pi­tal bill.

Dif­fer­ences in cost ac­count­ing meth­ods, es­pe­cially how over­heads are worked into the price of a pro­ce­dure needs to be con­sid­ered.

Dif­fer­ences in the tax en­vi­ron­ment. In South Africa, pri­vate hos­pi­tals ser­vices are not VAT ex­empt, and the VAT rate is 14 per cent. In other coun­tries, VAT could be at a dif­fer­ent level and/or their hos­pi­tal ser­vices could be fully or par­tially VAT ex­empt. This will have an im­pact on the re­sult­ing pro­ce­dure prices.

The rel­a­tive cost of in­puts such as hu­man re­sources could also vary sig­nif­i­cantly due to their avail­abil­ity. For ex­am­ple, the short­age of doc­tors and nurses in South Africa, rel­a­tive to the de­mand for their ser­vices has the ef­fect of driv­ing up their salaries/fees. The govern­ment is well aware of the crit­i­cal short­age of hu­man re­sources for health and has ini­ti­ated var­i­ous strate­gies to ad­dress the prob­lem – such as train­ing med­i­cal stu­dents in Cuba, ex­pand­ing the ca­pac­ity of South African med­i­cal schools and the planned re­open­ing of many nurs­ing col­leges. This may not be an is­sue in com­par­a­tive coun­tries, which means that their unit doc­tor/nurs­ing costs could be lower and this is not as a re­sult of ef­fi­cien­cies.

In ad­di­tion, fac­tors such as cur­rency ex­change rate dif­fer­en­tials could im­pact on the rel­a­tive cost of im­port­ing equip­ment and medicines.

Avail­abil­ity and rel­a­tive cost of in­fra­struc­ture that is re­quired in pro­vid­ing hos­pi­tal ser­vices such as elec­tric­ity and wa­ter need to be con­sid­ered too.

The level of tech­nol­ogy used in the pro­ce­dure should also be con­sid­ered. In some cases, newer tech­nol­ogy is more ex­pen­sive, but has bet­ter health out­comes. The ef­fect of im­proved health out­comes is not con­sid­ered in com­par­isons of prices. “For ex­am­ple, valve re­place­ment us­ing a less in­va­sive pro­ce­dure such as the TAVI (Tran­scatheter Aor­tic Valve Im­plan­ta­tion) is more ex­pen­sive than open-heart surgery, but the TAVI in gen­eral has bet­ter out­comes. In ad­di­tion, it can be per­formed on pa­tients (es­pe­cially much older pa­tients) whose sur­vival of open heart surgery is low.

The ex­tent of reg­u­la­tion of medicine prices in the var­i­ous coun­tries should also be con­sid­ered as this will im­pact on the re­sult­ing prices of the pro­ce­dures. ap­pear to be more pop­u­lar ac­cord­ing to data held by MSO. A la­paro­scopic ap­pen­dec­tomy means that the sur­geon makes three tiny cuts as op­posed to one large one and then works by watch­ing a video via a tiny cam­era in­serted through one of the cuts. This is con­sid­ered less in­va­sive than an open pro­ce­dure.

If you want to save money, you can have your ap­pen­dix taken out in Ghana at a cost of $230. The next op­tion is Kenya, where an open ap­pen­dec­tomy will cost you $390.

In Namibia, the aver­age cost is NAD19 000 for an open ap­pen­dec­tomy and NAD29 000 for a la­paro­scopic pro­ce­dure.

South Africa comes in at the most ex­pen­sive with the aver­age cost of an open ap­pen­dec­tomy work­ing out to an aver­age of R22 000 ($2377) while a la­paro­scopic ap­pen­dec­tomy works out to an aver­age of R32 000 ($3457).

In or­der to try and make a rudi­men­tary com­par­i­son, RISKSA chose to look at the cost of an ap­pen­dec­tomy (re­mov­ing your ap­pen­dix) in South Africa, Namibia, Ghana and Kenya. Med­i­cal Ser­vices Or­gan­i­sa­tion (MSO), a com­pany which pro­vides risk man­age­ment and dis­ease man­age­ment ser­vices to ben­e­fi­cia­ries through­out Africa was able to help sup­ply the aver­age cost of an ap­pen­dec­tomy pro­ce­dure in the rel­e­vant coun­tries.

Ghana ap­pears to of­fer the cheap­est pro­ce­dure; how­ever, both Ghana and Kenya only of­fer an open pro­ce­dure ap­pen­dec­tomy. In Namibia and South Africa, la­paro­scopic ap­pen­dec­tomies

Dr Glenn Sta­ples, a di­rec­tor at MSO, says Africa is a wide con­ti­nent and health­care costs can be sig­nif­i­cantly cheaper in other coun­tries. “Some coun­tries are cheaper than South Africa, some are on par and for ex­am­ple, in the case of An­gola, health­care costs are more ex­pen­sive than in South Africa,” he says. Sta­ples says look­ing at the con­ti­nent, health costs in Nige­ria could be con­sid­ered “gen­er­ally” ex­pen­sive but still worked out to be cheaper than South Africa.

“What you have to take into ac­count is that South Africans pay a pre­mium for what is un­doubt­edly a bet­ter qual­ity of health­care,” he says.

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