May 25, 2009
By SLINDILE KHANYILE

Distribution of healthcare services would improve greatly if the government allowed private providers to offer clinical services through public private partnerships (PPP) – and public and private sectors would both reap the benefits, healthcare analysts said last week.

They were responding to a suggestion by Medi-Clinic, which said it would advocate a different PPP model when the state started to implement National Health Insurance (NHI), which aims to ensure every citizen has medical aid cover.

Medi-Clinic chief executive Louis Alberts said he would like to see the government change its PPP model, which requires only support services such as building management and cleaning from private players.

Mark Wadley, a healthcare analyst at Credit Suisse Securities, said Netcare and Life Healthcare had been active in contracts for the public sector in the UK and their experiences had shown such contracts could deliver new and innovative services more efficiently than the public services.

“However, the political and public criticisms of these PPP contracts in the UK have often detracted from the operational results,” he said.

“I would think that similar reservations and criticism might arise in South Africa, where a similar aversion to creeping privatisation of the public health system might prevail.”

Wadley said PPP agreements offered additional patient volumes for the private sector or management contracts to run parts of public hospitals.

“While margins may not appear as attractive as in the private hospitals, there is a significant volume opportunity in the public sector,” he said.

An analyst who wished to remain anonymous said the health budget was significant but it was not spent appropriately. He would like to see the private sector demonstrate how it could apply the funding appropriately.

“I don’t think public facilities cost procedures fairly and there are issues like rental and maintenance which the Department of Health does not factor into its budget because they are done by other departments,”
he said.

“That is why when they sit down with private groups, you find that they are not comparing apples with apples.”

The NHI is being debated in various forums. One process is led by the Department of Health, which is working with the Treasury and the Department of Social Development.

Another process is being handled by the ANC, which has asked the Human Sciences Research Council to investigate technical aspects of the NHI.

The main issue under debate is the basic package that would be offered and how it would be funded.

Kurt Worrall-Clare, the chief executive of the Hospital Association of SA (Hasa), which represents private hospitals, backed Medi-Clinic’s suggestion.

He said the private sector could assist where there was a lack of technology or capacity, and perhaps with specific surgeries. Private hospitals could also partner the government and academic institutions to
train healthcare professionals.

The NHI is the main issue on the agenda for the HASA annual conference next month.