Life Esidimeni accused of price gouging

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A Life Esidimeni Centre.
A Life Esidimeni Centre.
Tracy-Lynn Ruiters

  • The Life Esidimeni Inquest resumed on Monday.
  • The group has been accused of charging the Gauteng health department exorbitant annual increases. 
  • Life Esidimeni has had the contract to care for mental healthcare patients in Gauteng for 38 years. 

The Life Esidimeni group has been accused of price gouging, leading to the Gauteng health department no longer being able to afford their fees.  

On Monday, former health MEC Qedani Mahlangu's legal representative, advocate Laurence Hodes, confronted the former managing director of the Life Esidimeni Group, Dr Morgan Mkhatshwa, about the company’s exorbitant annual price increases.  

Mkhatshwa is being cross-examined at the Life Esidimeni Inquest that aims to determine whether anyone should be held criminally liable for the deaths of mental health patients. 

The patients were moved from Life Esidimeni facilities to ill-equipped NGOs, where they died from hunger, dehydration and neglect. 

Hodes said, in the 2011/2012 financial year, the facilities charged the health department R209 million to care for about 2 000 patients.  

The bill rose to R224 million in the 2012/2013 financial year. It reached R234 million in the 2013/2014 financial year.  By 2014/2015, Life Esidimeni charged the department R323 million for the care of 2 000 patients. 

READ | Life Esidimeni: Gauteng officials were under political pressure to move patients, inquest hears

Mkhatshwa said: "The tariffs were being negotiated on a year-to-year basis. Life Esidimeni had no control over escalations caused by CPI [consumer price index]. The tariff increases were deliberated by the department of health and Life Esidimeni officials."

Hodes questioned why one of the contracts was still in place 38 years after it was first granted.  

"The contract was being reviewed by the [health department] officials. It was quite evident that there were no service providers out there who can give the same service that Life Esidimeni did." 

Mkhatshwa insisted the contract was transparent. 

He admitted that, in some years, the department could not afford to pay the costs. "They would pay the next year and we never charged them interest."  

Mahlangu, through Hodes, also denied that moving the patients was her decision. Instead, she said, the department was responsible.  

To this, Mkhatshwa replied: "I wouldn't know how the department functions internally."

He admitted he had never discussed the mental health marathon project with Mahlangu, but with departmental officials.  

Hodes also confronted Mkhatshwa about Life Esidimeni moving patients to NGOs even before the mental health plan was implemented. 

"We did refer to NGOs, but that would be recommendations by the multi-disciplinary teams if the NGO has the right facilities and the mental health user is suitable to thrive in that environment."

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