State sets price for private hospitals to treat its Covid-19 patients

The health department has finalised the fees it will pay private hospitals for severely ill Covid-19 patients, paving the way for the provinces to negotiate contracts with service providers to take the pressure off overburdened facilities.

It has also prescribed rates for some services required in hospital, such as radiology.

The agreements with provincial health departments are unlikely to provide much financial relief to private providers hard-hit by plummeting patient volumes during the lockdown, as the tariffs have been calculated on a cost-recovery basis.

“This is a significant agreement as it allows us to utilise private sector facilities during this disaster,” the health department’s Anban Pillay said on Thursday. “This is an emergency procurement so we did not have much time to spend on negotiations. In general the providers were keen to respond to our request, which reduced the need for lengthy negotiations,” he said.

The health department has set the daily tariffs for state Covid-19 patients in critical care at no more than R16,156. This figure includes R11,749 for a private hospital bed, R2,498 for a specialist team, R588 for pathology, R632 for radiology, and R694 for allied health services. It has also set rates for general-acute beds and palliative care.

The Western Cape, which has reported two-thirds of SA’s more than 37,500 Covid-19 cases, is poised to be the first province to secure service-level deals with private hospitals and other health-care providers, as it is already struggling to meet the demand for intensive care unit (ICU) beds in Cape Town.

Western Cape head of health Keith Cloete said the provincial health department was working on contracts to secure 300 beds with six private hospital groups. The department’s Beth Engelbrecht said the province expected to sign agreements with three JSE-listed private hospital groups Netcare, Mediclinic and Life Healthcare as well as the National Hospital Network, and hoped state patients would be admitted to private hospitals within the next week.

Most of the referrals would be to private hospitals in the Cape Town metropolitan area, which bears the brunt of the region’s Covid-19 epidemic.

As of Wednesday, the city had recorded 80% of the province’s 24,564 cases. The National Hospital Network, which represents smaller private hospital groups, also has a presence in Western Cape.

Cloete said the provincial health department wanted to use private hospitals near to public hospitals such as Groote Schuur and Tygerberg, and in transmission “hot spots”.

Groote Schuur and Tygerberg have 135 ICU beds between them, but only 100 are operating at present due to staff shortages, he said. Separate agreements need to be set in place for other private providers.

Radiological Society of SA president Richard Tuft said radiology practices had taken a financial blow during the lockdown, and while patient volumes had begun to recover, many practices were barely covering their costs. “We have, without discussion or any negotiation, been handed down a per diem rate for a limited basket of services. Our members are likely to accept these rates, in the interests of our patients, but would have preferred appropriate discussions beforehand.”

Mediclinic’s chief strategy officer, Corné Heyns, said the group did not see admitting state patients as an opportunity for commercial gain. “Most parties are approaching it from a costrecovery basis,” he said. Negotiations with the Western Cape health department were at an advanced stage, he said.

National Hospital Network CEO Neil Nair said that the association’s hospitals had all agreed to treat state patients at a reduced cost.