govt to regulate private hospitals
13 March 2008

Government will table draft legislation intended to regulate the private health sector, including private hospitals, within two months, Health Minister Manto Tshabalala-Msimang said.  "It is clear that we cannot sustain unregulated private health care service delivery in this country and at the same time regulate the medical schemes industry," she told the National Assembly.  "We must therefore regulate the providers and the industry as a whole."

The department had been working to draft legislation to present to the Assembly that "will enable us to contain costs, prevent bad business practices and protect the consumer. "I hope to table this draft legislation within the next two months for debate."

Tshabalala-Msimang said she was shocked to hear at a meeting with the medical schemes industry recently that they were by and large forced by the private hospital groups to enter into agreements on tariff increases even though they felt that the demands of the hospitals were not justified.

"They reported that the attitude of the hospital groups was: if you don't like the increases, pay us whatever you want and we will recover the balance from your members.

"This of course pits the member against the medical aid as the hospital will inform the patient that her/his medical aid has refused to pay the required tariff and that the hospital therefore has no option but to bill the patient directly.  "Madam Speaker, it is therefore clear that the playing field is not level," Tshabalala-Msimang said.

"Some may ask why we are so worried about the private health sector which only provides care for 15 percent of the population. The answer to this question is simple: the private sector is part of the national health system. What happens in this sector affects the entire health sector. When for example a person cannot afford private health care any longer because of the cost escalations, they turn to the public sector - thus increasing the number of people that are dependent on the public health sector. As well, government must protect the interests of all its citizens, including those that use the private health sector," she said.

The private health care sector provided care for about seven-million people or close to 15 percent of all South Africans but consumed more than the total expenditure by the public health sector.

The per capita expenditure in the private health sector was about eight times more than that in the public health sector.  The private sector spent an estimated 5.5 percent of gross domestic product. In addition, this sector employed more doctors, pharmacists and dentists than the public health sector.

"Clearly, this level of inequity cannot be left unchallenged."

By increasing tariffs the private sector would add to this high level of inequity by making private health care services even more inaccessible to insured and self-paying patients.

Typically people paid for private health care through membership of medical aid schemes.

A number of people paid exclusively out of their own pockets.   As the costs of private health increased the cost of medical aid membership also increased, Tshabalala-Msimang said.

The announcement met with mixed reaction from the various parties in the House, ranging from cautious approval to calls for freeing the market, improving the state of public health care, and implementing the proposed national health insurance system.

Sapa, http://business.iafrica.com