Department turns to private hospitals to provide services

THE DEPARTMENT of Health has deployed a technical task team to look for private hospitals that it could contract with to deal with a dearth of public hospital services.

The task team has mapped out private hospitals and general practitioners across the country’s districts to allocate facilities that are closer to communities who do not have public hospitals nearby.

Speaking at the Hospitals Association of SA conference yesterday, the director-general at the department, Precious Matsotso, said private hospitals had a reasonable number of health professionals while the public sector faced severe shortages.

The private sector also had staffing norms while the public sector was yet to implement these as it transits to the National Health Insurance (NHI) system.

Matsotso said when it came to quality of services provided, it was known that private hospitals were much better and thus the department could use their facilities as a training ground.

“If we want universal coverage, the public sector can’t provide everything,” she said.

Matsotso said the department wanted people to be able to access hospital services within 10km of their homes. In areas where there is no public hospital within that radius, it would look at contracting with private hospitals.

But Matsotso said the current contracting models with the private sector would have to be reviewed for this to be affordable, adding that the department would begin with consultations with the private hospitals before year-end.

Matsotso said that the government departments were going to face budgetary cuts, which would lead to serious resource constrains.

“If we have these budget cuts, it will be disastrous.”

It would rely on the private hospitals to help it with human resources and other challenges during this period.

Meanwhile, a British health economist, Andre Street, cautioned that some hospitals might have to be paid more for their services to encourage them to participate in the NHI system.

This was what the UK did when it initiated its service.

He said that, for instance, private hospitals faced a different tax regime and reporting costs from public hospitals. The cost of capital and labour also differed.

But Street said this extra top-up payment to hospitals would only be short term, as it was in the UK.

He said the method of reimbursement that had been found to provide fair pricing of health services in the UK and in other countries with universal health-care coverage was the diagnostic-related groups (DRG) system, where costs were compared across all hospitals in a region or country and the same price was paid for the same services.

The department says that government departments are going to face budgetary cuts that will lead to serious resource constraints.

This type of funding has an element of incentivising hospitals to take more patients but also has a budgeting element.

The ability to control expenditure is moderate and so is the requirement to incentivise hospitals as opposed to the other funding models, which either have weak ability to control expenditure or a strong need to incentivise private hospitals.

Alternative funding models are the cost-based model, where cost is based on the individual patient, and a global budgeting model, where contractual agreements specify the number of patients to be treated.

But Street said the DRG model had proven to be the most fair system in an environment where some hospitals had to lowered their prices to cater for the greater part of the population.