Ideological logjam robs the ill of SA
The government and the private sector ought to work together to improve medical services delivered to the majority of South Africans, says Netcare CEO Richard Friedland
THE government accuses private hospital groups such as Netcare of predatory pricing that denies quality healthcare to the majority. But the biggest obstacle to universal access is the government itself, says Netcare CEO Richard Friedland.
In an interview after announcing a 25% profit for the year to the end of September, he says public-private partnerships between groups such as Netcare and the state would be the quickest and most effective way to improve access.
“We embrace the concept of universal healthcare. We stand willing to play an active role,” he says.
The model for this has been tested in the UK, where Netcare is in partnership with the government to reduce waiting lists that its own National Health Service cannot handle, and in Lesotho, where Friedland claims Netcare has helped to transform the public health system.
“We’ve demonstrated our bona fides for 10 years in the UK. We’ve run public services in Lesotho with outstanding outcomes and we’re willing to do that in South Africa.”
In the UK, where it owns a controlling stake in the country’s biggest private hospital group, the General Healthcare Group, 33% of its patients are referred by the National Health Service.
“The government in the UK is utilising the private sector more — not because there’s been an ideological shift or they’re in love with it, but because they’ve found it cheaper to use the private sector than increase capacity in the NHS.”
Netcare treats public patients in Lesotho, too, in what Friedland says is the country’s largest public-private partnership. As a result, he says, paediatric deaths from pneumonia have been reduced by 65% and overall deaths by 45%.
“We’ve improved the quality of health services and we’re doing it on a public sector budget.”
In both countries the government is in effect outsourcing healthcare work it does not have the capacity to handle itself. To qualify for this work, private sector providers have to meet certain pricing and quality standards.
The South African government constantly threatens to regulate prices in the private hospital sector. Friedland says Netcare would happily submit to price regulation in the case of state-funded patients, “but price regulation for our private patients would not be competitive”.
Health Minister Aaron Motsoaledi has led the charge against private sector healthcare for what he calls its “predatory” and “extortionate” pricing.
Friedland says the government’s confrontational attitude is not going to help anyone.
❛ We’ve improved the quality of health services in Lesotho and we’re doing it on a public sector budget
“We could do a lot more with a more collaborative and cooperative approach.”
The private healthcare sector is facing a long, complex investigation by the Competition Commission. He says he welcomes “a robust inquiry of the entire market that is impartial and independent”, but he does not believe it will bring universal access any closer.
“We’ve got to find each other. These debates about costs and pricing — let’s have this inquiry and get them out the way.
“But, at the same time, let’s start cooperating because South African citizens deserve better access. We’ve been putting it out there that we’re a very willing partner.”
He sees the government’s much vaunted National Health Insurance as an opportunity for the private sector.
“We want to assist in providing services. Whatever the government puts out as a national price, we’ll decide whether we can offer services at those prices or not.”
But people are going to wait a long time for universal access if the government continues to see NHI as the only way to make it happen.
“We can embrace universal coverage now — we don’t have to wait 14 years. Let’s get together now and resolve how we can deal with waiting lists. Children are waiting eight years for cleft palate operations. We can deal with those waiting lists. Two years for a cataract operation. We can deal with that.”
The greatest obstacle to universal access is the government’s hang-up with the private sector, he says. “There is an ideological objection to having private healthcare, full stop.”
The sooner the government levels with the private sector the better.
“The bottom line is that if the government wants to own the private sector, we should have that debate. If it wants to nationalise its hospitals, we should have that debate. If the government says we want to own your hospitals and you can manage them, we should be open to that.
“Let’s put those cards on the table and have that debate. As long as ultimately we’re improving access. But let’s get there.”
If the government’s “end point” is a takeover of private healthcare, then it does not need a Competition Commission inquiry to achieve that.
“I’m not suggesting that it is the government’s end point, but if it feels the private healthcare sector is an impediment to providing greater access, let’s have that debate fairly and squarely.
“Maybe the public will come out and say we don’t want to see private hospitals, we want the government to control them. Call it nationalisation or rationalisation, but let’s create a national platform. If it is abhorrent to consider the fact that part of it is private and part public, let’s find a way of removing the barriers between public and private.”
Motsoaledi is not the only one who thinks private hospital groups overcharge. Anyone who has been to one
❛ Children are waiting eight years for cleft palate operations. We can deal with those waiting lists
of Friedland’s hospitals knows that the costs are horrifyingly high.
His response, in effect, is that people can lump it if they do not like it.
“If you’re not happy with the private sector, please use the public sector. If you think our costs are extortionate, why don’t you go and use a public sector hospital? Why don’t you ask the average medical aid patient why they don’t want to use public sector hospitals?”
Of course, a huge amount of hypocrisy is attached to government complaints about private healthcare prices and profits.
Nobody has done more to force people to use private healthcare — and drive those profits ever upwards — than the government itself.
It has presided over the collapse of state hospitals. But is this an excuse for private hospitals to charge whatever they like?
“We don’t,” says Friedland. He says price increases have been below inflation for the past three or four years.
He does not agree that a 25% profit means prices are too high. His profits are “within the norm of what other industries achieve”, he says.
The Board of Healthcare Funders is not impressed with this argument.
It blames groups such as Netcare for the exorbitant increases in medical aid premiums.
They have increased at a far higher rate than private hospital tariffs have, Friedland says.
Friedland, 52, speaks movingly about its loss-making 911 service and belief in the sanctity of human life.
He would be more convincing if it were not for the illegal kidney transplant scandal that left the service’s reputation for integrity severely compromised. Friedland himself faced criminal charges, which were later withdrawn.
“There was a breach of governance and we apologise unreservedly for that,” he says.