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SAMA responds to controversy regarding proposed increases by private hospitals

11 January 2008 The South African Medical Association (SAMA)

The South African Medical Association (SAMA) supports the notion of access to and affordability of healthcare, and has therefore noted with great concern, the current controversy regarding cost increases by private hospitals. A proposed 8% to 33% increase is planned for some of the key items in the private hospital billing process, specifically regarding ward and theatre fees.

Whilst the Association views this as a complex matter, we believe the basis for this controversy is the lack of reliable information on the actual cost of providing services - such as hospital care and fund administration. This existence of this state of affairs has been a longstanding one and has contributed to the current crisis. Another fundamental problem is that current medical aid benefit-design is one of the cost drivers in private healthcare. It encourages, for instance, in-hospital care for minor procedures that could be managed at the doctors’ practice. The general practitioner has therefore been excluded from his primary role as gatekeeper of health, which leads to in-hospital and specialised care with an increase in cost.

Says Dr. Kgosi Letlape, Chairman of SAMA: “The critical appraisal of private hospitals’ pricing decisions is a very complicated process. It is now further exacerbated by the regulatory authorities having long neglected practice cost studies, in spite of SAMA urging Government to do so over the past few years. It is a symptom of a health system that has been subjected to selective regulatory control of certain aspects of healthcare delivery, while other aspects have been neglected. This has also manifested in selective control of the various industry players through inconsistent and inadequate regulation. An example of this is the perceived stricter application of competition laws to some groupings e.g. doctors than to other role-players in the private healthcare system and the basic absence of regulation for fund administrators. “

SAMA therefore calls upon the various role-players in the health industry, including Government, to urgently get and work together to ensure that greater access to quality and affordable healthcare becomes a reality.

We urge all concerned to pay urgent attention to the following:
· Ensuring guaranteed access to basic healthcare for all, specifically for those who have medical aid cover.

· Commissioning of scientifically plausible practice cost studies without delay for all providers of private healthcare, including private hospitals and fund administrators.

· An acceptance of Government and the Department of Health of these cost studies. This will ensure transparent costing of health services across the whole spectrum of the private healthcare industry. It will also ensure fairness for recipients of healthcare in South Africa.

· Addressing of concerns relating to medical schemes’ benefit-design, which has the tendency of promoting in-hospital care rather than outpatient care, and other primary-care based interventions. This will most likely have a major impact in containing the spiralling costs of healthcare.

· Guarantee of access to healthcare by ensuring stability of healthcare and building an efficient, quality healthcare system, both publicly and privately.

SAMA therefore calls on all role players, especially Government, to ensure an outcome that is focused on protecting the interests of the general public.


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