Private health sector not well – report

Despite rumblings that Cabinet has rejected the NHI Bill, the health department is adamant that "all is well". Picture: iStock
Despite rumblings that Cabinet has rejected the NHI Bill, the health department is adamant that "all is well". Picture: iStock

The prognosis is out – and for South Africa’s private health sector, it’s not a good one.

Yet another document containing directives for interventions in the private healthcare system has been added to the debate around the country’s healthcare system. This one targets the private sector and details the reforms that will be needed if government is to stand even a chance of getting the currently ailing sector in good shape for the full implementation of the National Health Insurance Fund (NHI) by the proposed date of 2026.

A 260-page report by the Competition Commission’s Health Market Inquiry (HMI) on the private healthcare market – five years in the making – has added to the wealth of documents aimed at mapping a way forward to clean out a problematic system that is overdue for a shake-up.

The HMI report joins the NHI Bill currently before Parliament for discussion. Parliament’s Portfolio Committee on Health is also taking in written submissions until November 29. A public hearing process on the bill starts later this month.

The bill aims to pave the way for a single purchaser and payer system, in an effort to make healthcare delivery more affordable and accessible.

The Presidential Health Compact, a 104-page report detailing nine pillars intended toaddress the crisis in the healthcare sector, includes the private health sector in its intervention plan.

Now that the recommendations are here, the question becomes: Where to from here?

We spend a lot of money on health, yet we don’t have good outcomes within the system
Umunyana Rugege, executive director of public interest law centre Section27

Umunyana Rugege, executive director of public interest law centre Section27, told City Press on Friday: “The significance in the release of the HMI report is one of timing. There’s a real sense of urgency around fixing the health system. We’ve been talking about the NHI for a number of years, and the president was saying with the health compact that we need to address the shortcomings in the system.

“We spend a lot of money on health, yet we don’t have good outcomes within the system. I think there’s a real urgency now to address those issues, not only for the public but for the private system as well.

“The NHI is essentially a fund that will purchase health services. That fund will purchase from the private sector as well. The HMI report comes out at a good time because we’re at a moment in the NHI where we have a bill to be discussed before Parliament, and the information and data on what needs to be done in the private sector to address high prices can then feed in to the NHI,” she said.

According to the commission, the report shouldn’t be seen as an “either/or” response to the NHI, but rather as a document showing that fixing what drove up costs in the private sector was a necessary step towards successful NHI implementation.

Deputy Health Minister Joe Phaahla reiterated this sentiment, saying the report was “synergistic” to the NHI process and that the department would use it in its messaging around the NHI on why “things can’t stay the same” in the sector.

The health ministry was still studying the report in detail and would “determine a course of action”.

“We reiterate that our plan to institute the NHI will go a long way to protect the public and create equal access to quality health services for all. By introducing a large fund that strategically purchases goods and services, the NHI will encourage competition and price control,” it said.

There are no timelines yet in terms of just when and how the recommendations on policy interventions made in the report will be implemented.

Among its findings, the inquiry’s report detailed that the sector was characterised by high and rising costs of healthcare and medical scheme cover, and significant overutilisation of services, with no evidence of improved health outcomes.

The market has failed in many aspects and is failing consumers
Professor Sharon Fonn

Furthermore it said that the market was filled with large schemes and administrators controlling the sector, disempowered and uninformed consumers, a general absence of value-based purchasing, little regulation on the side of practitioners and failures of accountability at many levels.

Professor Sharon Fonn, who was part of the inquiry, said: “The market has failed in many aspects and is failing consumers. There is this story that the private sector is better than the public, but there are no real data to prove that.” Her comment came in response to the fact that the HMI found there was no standardised method to measure or report on quality of services and health outcomes in the sector.

The private sector was damningly found to be neither efficient nor competitive for a variety of reasons. One of these was that the health department itself had “inadequate stewardship” of the sector and failed to flex its legislative muscle in managing it.

The department hit back subsequently, saying that since 2009 its attempts to create a legislative framework to protect the public had been met with denials and court challenges by the sector.

One of the core recommendations made in the HMI report was the establishment of a supply-side regulatory authority, which would regulate the suppliers of services in the sector, including healthcare facilities and practitioners.

The report emphasised this would have to be an independent body.

The report is set to be tabled before Parliament soon and a special unit within the Competition Commission will be set up to advocate the implementation of the HMI recommendations and contribute to the debates on NHI.

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