Having recently been a patient requiring major surgery in a hospital, I have reflected on the vital nature of a fully functional hospital to the integrity of a health service. Despite spending half my professional life as a clinician working in a hospital, being a patient requiring complex care without which I may not have been here today to write this, provided me with another perspective. Hospitals, be they in the public or private health sector, are complex organisations focused on, and vital to the well being of the patients admitted to their wards. Hospitals are essential to provide a range of services that cannot be provided elsewhere which is particularly the case when patients require more complex levels of care. For this reason the important place of hospitals within a health service should never be devalued.
South Africa, has a two-tiered, public and private healthcare system, with hospitals of differing types functioning in both. Due to both legislative, regulatory and commercial factors, hospitals in the private and public sector, while delivering similar hospital services to their patients, function in a very different manner. In considering hospitals in South Africa it is necessary to analyse these differences and their implications.
Hospitals in the private sector other than nurses who nevertheless make up the majority, employ very few health professionals. Most of the latter work independently in what are termed “private practices”. In this case the hospital provides the environment including equipment and infrastructure within which, and with which these health professionals provide healthcare to their patients on a fee-for-service basis. Specialised services such as pathology and radiological practices do rely on their own equipment. Much of the equipment within a private sector hospital is leased rather than purchased. Many of the support services such as catering, cleaning and security services are in most cases outsourced to private companies. Blood and blood products are provided uniquely to both public and private hospitals in eight provinces by a not-for-profit entity, the South African National Blood Service, while the Western Cape has service unique to the province, the Western Cape Blood Service.
Given the nature of private hospitals in South Africa, they are institutions where management manages the equipment and infrastructure while coordinating the many role-players involved to ensure that the healthcare provided to patients is of a high standard. Noteworthy is that the involvement of every role-player within a private hospital is dependent on a profit margin that justifies their involvement and that the cost to the patient is determined by the collective cost of all the role-players involved. In the majority of patients payment is effected by health insurance of various kinds and in a minority out of pocket payments.
Hospitals in the public sector differ from their private sector equivalents in that all the health professionals within the facility are salaried employees on the staff establishment of that hospital. While to a varying degree certain services such as cleaning, catering and security are also outsourced, in many cases these services are provided in-house by the staff employed on the staff establishment of the hospital. Pathology services while provided by an entity outside of the hospital, are the responsibility of a national public entity, the National Health Laboratory Services. The staff, infrastructure and equipment within public sector hospitals are funded in large measure by a state allocation from general taxation. A small proportion of the funding is provided by fees levied against a minority of patients who are deemed, according to their income and health insurance if present, to be able to make payments for the services rendered within a prescribed fee structure, the Uniform Patient Fee Schedule (UPFS).
The management of the public sector hospital, in contrast with their private sector colleagues, are responsible for the provision of the totality of healthcare provided to patients within that facility. Management of the hospital is limited to the funds allocated annually based to some extent on the number and acuity of the patients admitted. Further limitations are that the salaries of staff are determined by wage agreements outside the ambit of hospital and indeed provincial management and in many instances the cost and logistics of certain supplies and equipment required for the hospital to function optimally are outside the direct responsibility of hospital management. It is therefore not surprising that state hospitals often lack an adequate operating budget and items essential to ensure quality healthcare, as reflected in recent media reports.
Accepting that hospitals in the private and public sector while having similarities differ markedly and are subject to different priorities and realities, they have a mandate to provide the same services to patients. The various procedures undertaken during my recent admission to a private hospital should have have been the same if I had been admitted to an equivalent public sector hospital. However, few would dispute the fact that my experience in a public sector hospital probably would have differed from that in a private sector hospital. It is said, although questionable, that the difference between the two is largely related to the so-called “hotel related” factors such as better catering and infrastructure in private hospitals but that the health services provided are similar. It is true since all the health professionals are employed by a public sector hospital, that this could foster a greater team approach to patients with complex pathologies in contrast to private hospitals where each health professional functions to a large degree independently.
My private hospital experience was not without challenges but overall the speed with which I was assisted and the time taken to undertake emergency surgery was in all likelihood faster than it would have been in a state hospital. The cost of my hospitalisation and what it entailed which was not inconsiderable and to a large extent covered by health insurance would if I had been admitted to a state hospital even taking into account the UPFS have been significantly less, but with a similar cost differential to provide the required care. A comparison of hospitals in the two sectors is complicated by the very different nature of each as outlined above and the cost differential between the two, however, both do play their part currently in ensuring that the health service in this country provides what is necessary to ensure a functioning health service. The question that I am left with is whether one is better than the other and whether with what is envisaged in National Health Insurance, which will and should survive?
The 2016 Competition Commission Health Market Inquiry identified various limitations within the private health sector one of which was the dominant nature of three hospital groups in the provision of hospital care in the private sector which in the opinion of the commission limited competition and created an environment for possible collusion. Similarly the funders of private healthcare were identified tone “highly concentrated” and both the hospital groups and the funders were characterised by “high and rising costs.” With respect to private practitioners the Commission found that “fee-for-service” created a “perverse incentive for profit maximising individuals” and that the fact that most hospitalisation cost was covered by funders created an incentive to unnecessarily admit patients to hospital to ensure payment.
In comparison it is interesting to reflect on the cost dynamics within the public sector, where albeit for different reasons, the sector is characterised by similar “high and rising” costs. Take for example the recently concluded public sector wage agreement in which salary increases of 7.5% have been agreed for public servants whose wage bill with hospitals makes up well over 60% of the total cost of a state hospital. That taken together with the impact of rising patients numbers and the cuts to the budgets of all health departments necessitated by nationally applied stringency creates a scenario where public sector hospitals are under increasing pressure. In addition, management challenges in many hospitals result in the inefficient utilisation of the limited resources allocated to these hospitals. The consequence of this are challenges related to the quality of healthcare provided.
Given the critical and complex nature of hospitals to a functioning health service, is it then wise in seeking equity to unilaterally force private and public hospitals to conform to a singe approach to hospital care in the future? While it can be argued that private hospital care is too expensive, in most cases the overall quality of care provided is of an adequate if not a high standard . Experience over the last decade, highlighted by media reports, Health Ombud reports and increasing medico-legal claims across provinces indicates that this not the case in public sector hospitals. Although this can be attributed to managerial challenges and inadequate levels of funding, with similar funding levels and managerial competence would the effectiveness and efficiency of the two sectors be similar? Given the importance of hospitals to a health system, is it would it be wise to adopt policies which seek to ensure conformity to a particular hospital model without clear answers to my questions? As an ageing South African, relieved that my hospital sojourn had a positive outcome, I would wish reassurance, as I am sure would most South Africans, that the future of hospitals is assured before the status quo is disrupted as imperfect and inequitable as it currently may be?
