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Private health care is ‘wasteful, costly’

Londiwe Buthelezi Boston

THE private health-care sector was wasteful and its excessive pricing could lead to further shrinking of benefits if costs continued to escalate, Lord Nigel Crisp, a member of the UK House of Lords and a board member of the South African Department of Health’s Academy for Leadership in Management of Healthcare, said in Boston last week.

Operation Smile, medical team are busy with the operations in the Hospital theatre near Empangeni in Kwa Zulu Natal. photograph by Sydney Seshibedi. Credit: INLSA

Crisp said in his experience with South Africa’s private health-care sector, he believed it was “quite wasteful”.

“There is over-treatment, excessive pricing and it’s very hospital focused,” he said.

Crisp said he knew South Africa’s big medical funders, such as Discovery Health, were not convinced the current tariffs levied by private health-care providers were the best they could offer.

“In context, I think your private sector could be cheaper.”

Crisp said one of the underlying problems was that specialists who conducted more complicated treatment of diseases were paid the most and more resources were allocated to treatment processes than prevention programmes.

The South African health-care system mimicked that of the US, which was characterised by large use of the private sector and private health insurance.

But South Africa was worse off because the private sector catered for very few people, he said.

Over-treatment cost the US health-care system between $158 billion (R1.4 trillion) and $226bn in 2011.

Excessive health-care prices were estimated to cost between $84bn and $178bn in that same year. Total waste under all categories, including failure to co-ordinate care, excess administration costs and other things, was estimated between $558bn and $1.2 trillion. Crisp said that the level of waste in Africa was in the region of 30 percent of this.

He said failure to co-ordinate care in countries such as South Africa meant that when patients used different doctors, there was duplication of tests carried out.

“There is the same level of waste in Africa, different kinds of waste,” said Crisp, adding that the lack of maintenance and inability to operate equipment, particularly in the public sector, added a significant cost to the countries’ health-care budgets without realising the matching health-care outcomes.

South Africa spends a higher proportion of gross domestic product (GDP) on health care than most of its Brics counterparts of Brazil, Russia, India and China. Only Brazil spends more.

In 2011, total spend on health was about 8.3 percent of GDP, way above the 5 percent recommended by the World Health Organisation. However, South Africa scores worse on indicators such as its maternal mortality rate and tuberculosis.

Crisp said there were problems in both the public and the private sectors and it was up to the country’s leadership to make the right decisions that would see the two sectors come together to form a solid health-care system.

“You’ve got a lot of ingredients that are not quite in the right place at the moment,” he said, looking at the areas that needed to be fixed to facilitate the implementation of the National Health Insurance next year.

Crisp said like many other African states and the US, South Africa was training health professionals for the 20th century, a mistake that the UK wished it could have avoided when it made its transition to the National Health System.

The other mistake that South Africa would have to avoid was confusing health care with social care, especially among the elderly, as this was one of the factors that pushed up health-care costs in the UK.

Novartis sponsored Londiwe Buthelezi’s trip to Boston.

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