New health minister begins untying the knots
At the beginning of last year the media was full of stories about costs at private hospitals. The previous minister of health, Manto Tshabalala-Msimang, was obsessed with cutting the spiralling costs in the private healthcare sector – and had decided that private hospitals were an appropriate target. It certainly made sense after her sustained attack on the country’s retail pharmacies which culminated in the implementation of strict medicine dispensing controls in 2004. In terms of the legislation pharmacies were limited to a dispensing fee equal to 26% of the value of the drugs (to a maximum of R26) with the result that artificial limits were imposed on gross profit margins on medicines that sold for more than R100.
The new minister, Barbara Hogan, has started untying some of the knots in the Tshabalala-Msimang legacy. Soon after her appointment Hogan made plenty of noise about governments HIV / Aids treatment programme. And more recently she reached a truce with the Pharmaceutical Society of SA (PSSA). After meeting with Hogan the PSSA announced it would withdraw its legal action against government, ending a four-year long dispute over the pricing legislation. Ivan Kotzé, a spokesperson for the Pharmacy Stakeholders’ Forum, said pharmacies were “positive that a more generous dispensing fee regime for pharmacists would be reached, allowing for the continuation of a sustainable independent pharmacy sector.” These sentiments were echoed by a number of retailers with pharmaceutical interests.
It’s not easy to pre-determine a court outcome; but we expect Hogan is cognisant of the fact that the court would order some relief from the punitive provisions in the 2004 Bill. The Constitutional Court has given guidance on this matter, says Fin24. In September 2005 the country’s highest court “upheld the government’s right to regulate medicine prices, but ordered it to come up with a more appropriate fee structure.”
Not all reforms are clearly thought out
One thing is clear – there’s plenty more to debate where healthcare is concerned. In the latest Council for Medical Schemes newsletter, CMS senior advisor Alex van den Heever comments that “health reform has become one of the most misunderstood areas of policy in South Africa.” FAnews Online agrees.
The main reason for this is that the reforms witnessed thus far clash with the free market principals ensconced in private medicine. This means health reforms are implemented at the expense of private hospitals, private pharmacies, private medical specialists and other professionals trying to make a living in that space. And although a balanced commentator will attempt to argue contrary – government has concentrated on the private sector when it should have done everything in its power to improve healthcare implementation in the public sector. Van den Heever criticises industry participants for “either prescribing to or fobbing off reforms while deflecting any rational probing of the underlying issues.”
Does he believe private hospitals are self serving when complaining about the previous minister of health’s repeated attacks on their pricing mechanisms? We think it does. Van den Heever writes: “any private interest group, currently deriving significant financial advantage from systemic biases in the private health system, merely has to invoke the mantra of ‘over-regulation’ to remove any deeper questioning of the potential avoidable harm that proper regulation may offer.”
The three proposals health policy formulation
Part of the problem in South Africa is the lack of a proper model to describe the current approach to healthcare reforms and regulation. Van den Heever offers three possibilities; admitting that each of these is fatally flawed:
1 Health reforms have been adequate and proportionate, but are struggling to cope under an altered burden of disease due to the HIV / Aids pandemic.
2 Health reforms have focused disproportionately on regulating the relatively efficient private health system rather than dealing with the acute problems of the public system.
3 Inequity is the cause of South Africa’s poor health outcomes. It can only be addressed through the implementation of a universal single-tier health system.
Which of these possibilities you prefer depends on your perspective. For example – we lean to the second definition – while the minister of health might choose the third.
Whatever the case it’s impossible to summarise a regulatory approach to healthcare solutions so simplistically.
And there’s no contradicting that public sector healthcare under our former minister of health left a lot to be desired. Van den Heever provides plenty of ammunition to support this claim. He says no “health district in South Africa is able to achieve World Health Organisation (WHO) required detection and cure rates for tuberculosis.” And he mentions that avoidable mortality at public hospitals “is at levels unprecedented by international standards” while “health outcome improvements” are achieved internationally at much lower costs than in South Africa. These problems exist at a number of government departments – for example education – where results remain pathetic despite more per capita funding than most countries in the developing world.
The solution should acknowledge that private and public healthcare are equally important in achieving the country’s health goals. But somehow private healthcare disappears in translation. Van den Heever concludes that one must “conceptually distinguish between the goals of public health and social security” and accept that both have been “neglected in policy development over the past 14 years.” In doing so he alludes to a healthcare system comprising public health and social security – private healthcare is nowhere to be seen.
Editor’s thoughts:
The public versus private debate in the healthcare sector will rage on. We know that government is keen to implement a national health system in coming years. In our view it’s imperative that the system separately harnesses the resources available in both the private and public healthcare sectors, rather than jamming everything into a single solution. Will the so-called agreement between Hogan and pharmacies result in better profits for medicine dispenser, or is the minister just buying some extra time? Add your comments below, or send them to [email protected]
