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Healthcare industry leadership must take responsibility for transformation

13 November 2006 VocalCord

South Africa's social environment and persistent economic inequity has created a burning need for government action and legislation.  In the healthcare sector, this action has taken the form of plans for a social health structure.  Alan Fritz, general manager of corporate affairs at BESTmed, says although there are a number of positive signs, the healthcare industry has a lot of catching up to do.

"It is ironic that while the government is trying hard to redress the economic inequalities of the past by creating a social health system, the companies and organisations at the heart of the healthcare industry itself continue to lag behind in transformation.  The healthcare industry needs to realise that if transformation is carried out properly and successfully, it will gain a lot of added value from the process," says Fritz.

Fritz points out that income distribution is still skewed by race to the extent that previously disadvantaged individuals (PDIs), who constitute 78.7% of the population, earn only 46.7% of total income.  This, he says, is a recipe for even more legislation.  "Unemployment is also skewed - 48.8% of PDIs are unemployed - and this tells you that the haves will have to fund the have-nots in the healthcare sector.  The immediate consequence of poverty is huge inequalities in access to healthcare, productive assets, land, basic infrastructure, education and skills.

"The government is not going to sit back and do nothing.  I predict that the Council for Medical Schemes will have to manage schemes more tightly in its role as a watchdog for an industry seemingly unable to transform itself," continues Fritz.

According to Fritz, transformation in the healthcare sector will require common sense, but also a paradigm shift.  "It is a complex process, and there is no way of knowing how fast to move on this topic or even how big the task may be.  All we know is that transformation is an economic imperative, and the industry requires more commitment in stimulating emerging markets."

The onus for changes in behaviour and stereotypes falls squarely on leadership, and Fritz claims new cultural norms and values should be set for success and growth.  "Strategic alignments should be managed beyond mere fronting.  Business strategies will fail if they do not build value, so transformation will require careful planning.  It will require careful attention to people management, business culture and organisational processes.

"Change enablement and the introduction of human resources policies will be vital to challenging the barriers that exist today.  The healthcare industry must accept that there can be no half measures if we want to survive in an economic environment that will be largely influenced by the emerging market," adds Fritz.

"If it is true that no company can transform itself unless its people are transformed first, then companies must change their relationships with their employees," he says.

Job creation in South Africa is increasing, and Fritz says the positive spin-offs will be felt in healthcare as long as there is compliance with Broad-Based Black Economic Empowerment imperatives.  "The emerging market up until 1970 saw whites receive more than 50% of fiscal expenditure.  In 1997 this figure dropped to 9%, which shows a fundamental shift that must be taken into account.  The change in spending patterns and the accumulation of wealth in todays emerging market makes this group attractive to the healthcare industry, and to take advantage of this market the healthcare sectors leadership must take the initiative to develop more skilled professionals from previously disadvantaged groups.  There can be no benefiting from change in an industry which is not prepared to change itself," concludes Fritz.

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