18/01/2012 ( L to R)  Enrolled nurse Jane Segoe, Patient Letia Tshaka, Sister Tauherah Tavares and Sister Nozipho Mekane attending to their patient at Mediclinic Morning side private hospital in Sandton Gauteng. (191)
Photo: Leon Nicholas
18/01/2012 ( L to R) Enrolled nurse Jane Segoe, Patient Letia Tshaka, Sister Tauherah Tavares and Sister Nozipho Mekane attending to their patient at Mediclinic Morning side private hospital in Sandton Gauteng. (191) Photo: Leon Nicholas

Private hospitals warn of job losses

Time of article published Jan 19, 2012

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Private hospital groups would remain a catalyst for job creation in South Africa’s health-care sector as the country moved towards the National Health Insurance (NHI) system, health economists said yesterday.

A study, commissioned by the Hospital Association of SA (Hasa) and undertaken by independent economic research groups Econex and Quantec Research, sought to quantify the economic contribution of Hasa members, which provide over 85 percent of South Africa’s private hospital capacity.

It showed that the hospital groups directly and indirectly supported an estimated 218 000 jobs in 2010, contributing R52.2 billion, or 2.2 percent, to gross domestic product.

Private hospitals employed 64 000 workers on a full-time equivalent basis in 2010, of whom about 55 000 were employed on a permanent basis.

Hasa indicated that, while total employment contracted by 5.8 percent during the recent recession between 2008 and 2010, the number of permanent employees at Hasa hospitals increased by 4.4 percent.

Currently, Hasa members operate 209 private hospitals with 27 789 beds, or more than 85 percent of the industry total. Members include Life Healthcare, Netcare and Mediclinic.

The hospitals’ labour income was about R9.27bn and they contributed an estimated R5.8bn to the National Treasury in tax revenue.

When the contributions of the hospitals’ direct and indirect suppliers were considered, as well as the income effects through the economy, the total tax revenue generated, together with upstream and downstream partners, stood at 2.5 percent of the government’s total tax haul during 2010.

Mariné Erasmus, a senior economist at Econex, cautioned that with the introduction of the NHI, there was a risk that private hospitals would not be utilised fully if people could not afford to pay both their medical scheme contributions and NHI levies.

“The direct and indirect economic effect would improve if business increased in the private sector because it provided services to the NHI. I think what this tells us is that the sector should not be forgotten under the NHI because it would harm lots of jobs if the sector shrinks,” she said.

Alex van den Heever, the chair of social security systems administration at the Wits University Graduate School of Public and Development Management, said Hasa did not commission this study because it felt the private health-care sector’s existence was threatened under the NHI, but rather to address negative impressions created about the sector.

Turning to the impact of NHI on employment, the Department of Health said it would spend R1.24bn in the next three years on training new health professionals.

Minister of Health Aaron Motsoaledi said 122 nursing colleges would be revitalised, a medical school would be built and two academic hospitals established as part of the NHI human resources strategy.

Apart from this, the National Planning Commission’s National Development Plan, published in November last year, envisaged that between 700 000 and 1.3 million community health workers would be recruited and deployed by the public sector to implement community-based health care programmes funded by the NHI by 2030.

According to the Health Professions Council of SA (HPCSA), 150 509 qualified health practitioners were registered with the council in 2010.

But Lize Nel, the communications officer at the HPCSA, said some practitioners were still registered with the council although they were practicing in other countries and had chosen to have dual registration.

Van den Heever said the country could not compensate for inactive economic sectors by hiring more people into the few sectors that were active.

He said the country’s health-care sector would continue to grow normally under the NHI but that it could not be a driver of economic growth.

“The health sector is not the sector that can change the situation. It’s not a key turner to drive economic growth,” Van den Heever said. - Londiwe Buthelezi

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