1. THE PRIVATE HOSPITAL INDUSTRY
a presentation to
HEALTH PORTFOLIO COMMITTEE
12 May 2010

2. What is the Hospital Association of South Africa (HASA)
A voluntary non-profit association that represents more than 90% of private hospitals and ambulatory clinics.
HASA recognizes and submits to the leadership and stewardship of the DOH of the Republic.
It communicates and consults with its members on important national and international developments which may impact on South African Healthcare interests.
HASA is governed by an agreed upon code of Ethics.
HASA would like to see itself as a responsible resource that will continue to contribute to the betterment of healthcare for all in the RSA.

3. HASA has historically demonstrated it’s commitment to work with government, the Health Portfolio Committee and the DOH for improvement of healthcare in South Africa
We recognize that the Portfolio Committee on Health has earmarked four areas of priority for this year. Three of which are relevant to HASA and are :
How private hospitals operate between two sectors?
NHI?
2010 readiness?

4. How private hospitals operate with respect to the handling of patients, transfer of patients to the public sector and how we charge.
Important data to note:
RSA total population: is estimated to be approximately 49m
Of that there are approximately: 8m (medically insured)
Private Sector usage:
Primary Care:15m
Secondary.& Tertiary: 9.5m

5. Use of public facilities
Medical Schemes Act (1998) introduced Prescribed Minimum Benefits (PMB’s)
PMBs represents approximately 70% of private hospitalisation
These cases are fully covered by Medical Schemes according to the Medical Scheme Act
In the early years some medical schemes might have tried to circumvent PMBs by unilaterally making the State the DSP
Some low cost benefit options still has the public sector as DSP e.g. Transnet
A scheme can instruct that the patient be moved to public when funds are exhausted.
Private hospitals must treat all emergency cases. On stabilisation, state patients are transferred to the public sector if a bed can be secured . (Section 5, National Health Act, and the Constitution of the Republic)
COIDA – unconfirmed cover can result in transfers to the State.
When public sector is on “divert” (i.e. state closed and not taking patients) – private hospitals are obliged to accept and keep uncovered patients without reimbursement.
This is the same as only providing cover up to the limit, since State facilities seldom bill and sicker members choose options with higher limits.
Emergency Centres: public patients arriving at private facilities are given emergency treatment and are then transferred.

6. Use of public facilities - Recommendations
There are currently no conditions and/or terms in which patients are diverted to the private sector or transferred to public sector.
We recommend that a protocol be developed for managing patients between the public and private sector.
Since HASA members do not discern patients between PMBs and non-PMBs we support the CMS view that PMBs should be expanded to include all hospitalisation. This would remove the problem of covered patients being moved to state hospitals .
This is the same as only providing cover up to the limit, since State facilities seldom bill and sicker members choose options with higher limits.
Emergency Centres: public patients arriving at private facilities are given emergency treatment and are then transferred.

7. Private sector pricing
Various combinations of FFS, Per diems and Fixed fees

8. Hospital expenditure as % of total health expenditure
SA is 37% of benefits but what of totals health expenditure – R24bn
But why have price increases been more?
Source: OECD 2006; German Federal Statistical Office; American Hospital Association

9. SA private pricing cares compares well globally
Source: Servaas van den Bergh, Stellenbosh University

10. South Africa has significantly lower out of pocket payments than peer countries
Source: WHO 2008

11. Conclusions on Price
Sec 90 (1) (v) requires cost based reference pricing– Reference Price Lists (RPL). (Such list however, shall not be mandatory, so as to ensure competition within the sector)
This has been completed by HASA and its consultants and should inform the discussion on appropriateness of cost.
RPL results may add comfort as based on actual input costs.

12. Solutions to improved affordability of private health
The underlying problem is the gradual erosion of cross subsidies as:
Medical scheme population ages
Adverse selection with young and healthy opting to remain uncovered; sick incentivised to get medical cover
Solution: strengthen social solidarity and affordability as a consequence
Improve risk cross-subsidies (Risk Equilisation Fund)
Improve income cross-subsidies (restructure Tax Exemption Subsidy; mandatory membership for those who can afford) – 20% reduction in contribution rate 1
Review VAT on healthcare product and services – 14% reduction in cost
Review HPCSA regulations on employment of Doctors
National purchasing scheme for drugs and surgicals
Review VAT on healthcare product and services uncommon in emerging market health systems
1 Prof. Heather McLeod

13. Private sector 2010 readiness

14. The private sector 2010 readiness
Early in the process HASA was periodically invited to participate in 2010 health-plan meetings.
Most of the recent scheduled meetings have been cancelled for varied reasons.
HASA members continued to implement internal readiness plans. In this regard, meetings have been held with the national and provincial departments of health on an ad hoc basis (attended by private sector members).

15. Overall plan – the need
Biggest event in the world, for 32 days, in mid winter, within the socio-political background and amidst an economic recession :
Provide emergency care and acute hospital admission support, with additional surge capacity
Do all of this as if it was “business as usual”
Develop and forge new relationships between public and private sector (for legacy building)

16. Major incident preparedness
Most private hospital staff trained , with each hospital running own internal training
Hospital Major Incident Committees have been established and are functional in all designated hospitals
Major Incident Plans – based on a Group generic, but customized per hospital – strategic and tactical
Hospital Operational Plans – detailed actual roles and committed responsibilities on game days , and those in between
In addition private hospitals need to ensure that ordinary operations continue (local patient demand is seen to).

17. Health Technical Task Team 2010 targets supported by the private sector
Hospital and Emergency Task Team
Emergency centres
Triage
Forensic (criminal and sexual assault)
Database
Hospitals
Disaster medicine
Under each was predetermined criteria
3 criteria
Department of Health and the Private sector collectively agreed the targets 17

18. Gathering of Clinical Information
Triage priorities
Information about patient acuity
Clinical outcomes
Information about volumes and admissions
Clinical surveillance
Information about disease/injury profiles
Clinical processes
Information about delivery of clinical care

19. Resources on Intranet Major incident related
Signage – directional, during MI
Action cards - descriptive for roles and tasks
Triage tags - ensures priority
Major incident plans
Infectious disease protocols - ensures safety
Special situations
Clinical reference information
Operational standards and formats

20. What we still require Communications plan from DoH per province
List of reporting requirements
Reporting structure for incidents / admissions
Finalized list of supporting hospitals and services
Agreement in place, and terms thereof, for co- operation between Health care sectors
Legacy targets in terms of outcomes

21. In conclusion……
We want to reassure the honourable members of our willingness to join hands and work with yourself towards the attainment of better health for all in our country.