Specialist clinics ‘are key to cutting costs, waste’

PATIENTS would get a better deal, doctors would earn more and medical aid schemes could save money if there were more specialised hospitals, the head of SA’s biggest medical scheme administrator, Discovery Health, said yesterday.

Hospitals that focused on specific areas of competence such as eye surgery or orthopaedics had much greater scope to reduce waste and cut costs without compromising quality, said Discovery Health CEO Jonathan Broomberg.

“Almost all of our specialist care takes place in acute hospitals which provide everything. Healthcare looks like manufacturing did in the early 20th century,” he said.

In a recent pilot product on hip replacement surgery, Discovery drew on the experience of the UK’s National Health Service and the US private sector to draw up standard operating procedures for doctors, to cut the average cost per patient from R110,000 to R70,000, Dr Broomberg said.

The average length of stay halved, from 7.34 days to 3.5 days and the actual time a patient spent in surgery was reduced from 126 minutes to 75 minutes, he said. Dr Broomberg did not provide data on patient outcomes, but insisted there had been no compromise in quality.

Cutting “waste” in this way would enable funders to pay doctors more without pushing up premiums, he said. “We paid significantly more than usual and still saved money. Doctors are often not aware of the costs of tests and unaware of clinical pathways to reduce the length of stay in hospital,” he said.

Provincial health departments could encourage the growth of hospitals that specialised in high-volume procedures such as eye surgery, by issuing more licences, he said, suggesting this market segment might also provide opportunities for smaller private hospitals. “Investors need to see this as an opportunity to compete with the groups,” he said.

The private hospital sector is dominated by the Netcare, Life Healthcare and Mediclinic groups.

Dr Broomberg said the upcoming Competition Commission inquiry into the private healthcare market ran the risk that pending legislative reform was left hanging.

The medical schemes industry has long lamented the regulatory loopholes that affect its business, and has previously appealed to Parliament to revive the 2008 Medical Schemes Amendment Bill, which was never processed.

Among its provisions were measures to improve medical scheme governance, and a risk equalisation scheme to compensate schemes that had a greater than average proportion of high risk patients.

The Competition Commission is expected to begin its market inquiry into the private healthcare industry in September. Private hospitals and funders have said they want the entire industry to be scrutinised.