Stifling the private healthcare industry could see it shift resources to foreign operations, placing greater strain on the public sector, a consulting company said on Thursday.
”If government is gong to have a highly regulated private healthcare environment, then the margins are not going to be here for private hospitals in South Africa,” Frost and Sullivan private healthcare practice head Keith Schlagbauer said in a statement.
Netcare and Medi-Clinic have already made ”significant investments” overseas, he said.
He would not be surprised if private groups scaled down local operations and focused on generating revenue from their overseas businesses.
Health Minister Manto Tshabalala-Msimang announced in Parliament on Wednesday that unregulated private healthcare cannot be sustained. Draft legislation intended to regulate the sector will be tabled within two months, she said.
”It is clear that we cannot sustain unregulated private healthcare service delivery in this country and at the same time regulate the medical-schemes industry,” she told the National Assembly. ”We must therefore regulate the providers and the industry as a whole.”
Schlagbauer said private hospitals are not philanthropic organisations and have an inalienable right to generate profit.
There is ”significant potential” for public-private partnerships (PPP) in healthcare.
Rather than imposing strict regulations on private hospitals, the government should rather involve them in supporting and supplementing the public healthcare system, he said. ”If the minister comes up with a sustainable PPP framework, then we may be able to do something unique in South Africa.”
Schlagbauer is of the opinion that nobody knows how the cost of private healthcare in South Africa compares with that in other countries on a per-procedure basis.
As a result, claims that private healthcare is too expensive are only speculation.
The Hospital Association of South Africa (Hasa) said on Thursday that government regulation is not in anyone’s best interests.
The association, which represents more than 94% of private hospitals in the country, said it would like to have further talks with the Department of Health on the issue. It said it had not seen any of the proposed regulations nor had it entered into any discussions with the department on them.
Tshabalala-Msimang told Parliament she was shocked to hear at a meeting with the medical-schemes industry recently that they were by and large forced by the private hospital groups to enter into agreements on tariff increases even though they felt that the demands of the hospitals were not justified.
This was, however, refuted by Hasa chief executive Kurt Worrall-Clare.
”There are approximately 130 registered medical schemes in South Africa, yet only six medical-aid administrators represent 71,6% of schemes in provider negotiations. As a result of this, negotiations are robust,” he said.
He said the focus should rather be on appropriate infrastructure.
South Africa has 2,7 hospital beds per 1 000 population, significantly below emerging-market averages of 4,4 beds per 1 000.
The public healthcare sector has more than 100 000 beds, while the private hospital sector has 28 000. Both the public and private sector are hitting capacity constraints. — Sapa