4 February 2019

South Africa: Why Delays to Fixing Health Care Are Bad News for South Africans

Photo: Thabiso Makelo/Panoramio
Chris Hani Baragwanath Academic Hospital in Soweto.
analysis

The release of a final report about the state of competition in South Africa's private health sector has been delayed again. It was compiled by an inquiry panel made up of medical, legal and economic experts. The panel heard submissions from a range of stakeholders including members of the public, civil society organisations as well as private hospital groups.

The inquiry was set up under the auspices of the country's competition authority in 2013. It's remit was to investigate characteristics of the private health sector that may prevent, distort or restrict competition. Its preliminary report, released in July 2018, concluded, among other things that the sector was highly concentrated in the hands of a few major players. The final leg of work was to get inputs from various players on the initial findings before concluding the inquiry. The inquiry has cost tax payers R197 million so far.

Another delay of the report - which should have been released in March 2019 -is therefore bad news. The sooner South African authorities deal with the issues of anti-competitive behaviour in the private sector, the more likely access to quality health care will improve.

South Africa has a two-tiered health care system. The public sector is under-resourced and stretched while the private sector is highly sophisticated and expensive. Even though only 16% of the country's population uses private health care, it nevertheless gets a large portion of the government's health expenditure in subsidies.

At the same time, private health costs continue to balloon and fewer people can afford it.

The inquiry's preliminary recommendations offered a clear agenda for how the private sector can become an integral part of the current national health system. There must be no more delays: if South Africa is to reach its lofty goal of universal health coverage, the report must be released and those recommendations adopted.

Key findings and recommendations

The inquiry examined three aspects of the private sector.

  • Medical schemes through which people pay for private health services and the administrators who run them.
  • Private facilities, such as hospitals and clinics.
  • Medical doctors and specialists in the private sector.

The key preliminary findings and recommendations were:

  • Medical schemes provide multiple plan options for cover without providing adequate information to understand what they cover, how the plans compare and what value the patients receive. As a result, consumers aren't able to compare what schemes offer or choose plan options on the basis of value for money.
  • There is a lack of transparency on the pricing of health care goods and services, standardised reporting of health outcomes and implementation of evidence-based guidelines and treatment protocols.
  • Medical practitioners and specialists are concentrated in the private sector. As a consequence, there is time to over-service and inefficient use of expertise and time.

In light of these and other findings, the inquiry made a number of recommendations to remedy the situation.

These included putting measures in place to enable the Council for Medical Schemes, which regulates medical aids, to exercise more effective oversight.

In addition, to ensure that people who belong to medical aids get more comprehensive cover, the inquiry proposed that all medical schemes also offer a standalone standardised obligatory basic benefit option. The basic option would include a standard basket of goods and services and be comparable among schemes. This option would include cover for the prescribed minimum benefits, make provision for the treatment of these prescribed minimum benefits outside of hospital settings and add primary and preventive care.

And the inquiry recommended tighter regulation of the sector through the establishment of a dedicated health care regulatory authority. This would govern the number and distribution of doctors and hospitals to meet current and future needs. And it would ensure the development of clinical protocols as well as shape the structure of payment systems.

The inquiry also recommended that a centralised national licensing framework be introduced. This would accredit all health facilities including clinics, hospitals and GPs' rooms. Another recommendation was to establish a price-setting mechanism.

Important

The recommendations are innovative and would go a long way toward making health care in the country more equitable. But South Africans will have to keep waiting to see if they actually bear fruit.

The latest development is that, due to a lack of funds, all the inquiry's work has been suspended until the end of the financial year in March after which a new date for the release of the final report will be published in the Government Gazette.

It's important that the inquiry is allowed to complete its task sooner rather than later. This is because its findings could have a bearing on a piece of legislation currently making its way through parliament - the Medical Schemes Amendment Bill. The bill proposes changes to medical scheme governance and benefit options. Reports suggested that the department of health wanted to wait for the outcome of the inquiry before finalising the bill.

The inquiry could also affect the National Health Insurance Bill which is meant to herald in universal health care. But the bill is mired in controversy. The most recent version was recently rejected by the country's cabinet which instructed the national department of health department to review what's been proposed.

Until the final report is released, South Africans must contend with a fragmented, poorly regulated and expensive health care delivery system.

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