Friday 12 July

FDoH: “some of these things don’t need regulation, they just need us to be more human”

Free State is a centrally located province within South Africa and is divided into one metro (Mangaung Metro) and four districts: Xhariep, Lejweleputswa, Thabo Mofutsanyane, and Fezile Dabi. From the outset the (FDoH) highlighted that the Free State is a predominantly rural province with a population of 2.6 million over the entire province.

The FDoH noted that Mediclinic dominates within the province in terms of the number of beds and that there are generally significantly more private hospitals in Free State’s only major urban centre in the Manguang metro. There are districts within the Free State that have no private sector hospital beds at all.

The difference between “need” and “demand”

The FDoH explained that one of the challenges in a situation in which there is unequal distribution of private sector beds is encapsulated by the distinction between “need” and “demand”, which are too often conflated.

Demand, the FDoH submitted is related to want which can be created whereas need is related to, amongst other things, burden of disease and availability of healthcare services. Demand for private healthcare is higher in Bloemfontein than anywhere else, with result that there is excess capacity in terms of beds. This happens at the same time as the need is high in poorer more rural areas, but the demand is lower because people are less able pay for private healthcare.

Hospital accreditation and licensing

The FDoH told the panel that this distinction between need and demand plays out with regard to applications for hospital licenses in different geographical regions because they “follow the markets”.

In discussing hospital licences, the FDoH explained that a hospital group would need approval to begin building but then licensing in conformance with other standards once a hospital has already been built. This causes some issues including the fact that approval will be given then because of poor planning a hospital will just never be built even though the Department has factored it in its understanding of the availability of access to healthcare it would provide.

To remedy this problem, the FDoH now insists on accessing business plans for facilities before granting approval to build. This does help but the FDoH noted concerns about the poor quality of business plans and the difficulty in assessing them.

Even if a business plan is in order and approval is granted to build, the FDoH indicated that there are other problems that prevent hospitals from being built and opened.

One such problem is that there are often “huge delays” caused by municipalities in the process of purchasing land. It is possible that nothing happens for several years after approval is granted by the FDoH and “this means that people are not getting services they need because municipalities are not moving quickly enough”. In reply to a question from the Chief Justice, the FDoH noted it had not properly engaged municipalities about this issue.

A second problem is that banks will sometimes cause obstructions in the process and “tamper with the need” for a facility that has been identified and approved by the FDoH. The FDoH gave an example of Standard Bank refusing funding for a facility providing “acute” services rather than “sub-acute” services because of its own independent studies on the financial viability of a facility. Businesses are then forced to change their business plans to accommodate what they can obtain funding for.

A final problem in this process of hospital licensing identified by the FDoH is that it has struggled with “quality assurance” with regard to private facilities. Because hospitals are assessed for licensing after already being built the FDoH has problems because some quality issues “cannot be reversed” after the building has been built.
Information about the quality of private healthcare facilities

In addition, the FDoH conceded that information on quality is “kept within the department” and not made public which would allow the public to compare quality of different hospitals and hospital groups. The FDoH’s representative was forthright, acknowledging “I want to make it clear that … we have come short” concluding “this is an oversight”.

The Chief Justice questioned whether it was a problem that regulations did not require reporting on quality in private facilities as it did for public facilities. The FDoH accepted that this was the case and gave examples of positive instances where the FDoH had conducted “proper data collection” including the private sector in instances such as the Minister of Health’s HIV Counselling and Testing (HCT) campaign and the publication of data on maternal mortality.

Problematic Private Public Partnership (PPP) with Netcare

In 2002 FDoH entered into a PPP with the Netcare Hospital Group that was supposed to last for 16 years and end in 2018. However, as a result of drawbacks in this process this period has moved four years and now the PPP will end in 2022. The FDoH explained that the purpose of the PPP was to provide shared services at two different hospitals: Universitas and Pelonomi hospitals. It was also hoped that the PPP would assist in revenue collection from fee paying patients and assist in the redirection of revenue collected to improving health outcomes in the public healthcare sector.

However, the FDoH’s submissions revealed that because the PPP was “not succeeding” the FDoH engaged KPMG to audit the success of the programme. What was uncovered is that the risk burden lay with FDoH itself and that the revenue streams were not being channeled successfully. The FDoH’s representative explained that the impression of some within in the FDoH is that Netcare primarily signed onto the PPP merely in order retain a license until 2022. Though there are serious concerns about the PPP, the FDoH noted that to leave it might have legal consequences or penalties.

Another concern with the PPP is small portion of the revenue acquired through it that accrues to the FDoH. As an example, the FDoH indicated “complications” resulting from the PPP with regard to radiology. The FDoH noted that although radiologists have told the panel that they are “price takers” in the Free State “we have a different experience”. In terms of the PPP the FDoH is only entitled 33% of radiology revenue which comes to about R30 million of a total of 80-90 million received in the hospitals that are subject to this PPP. This is despite the fact that “all the risk is on us” because the FDoH owns the radiology equipment, maintains it and its employees are providing the services. Netcare, according to the FDoH does not have any of its own radiology capacity in the Free State. Practically all that happens now is that all of Netcare’s patients are transferred to the state hospitals and seen in the public sector with most of the benefit accruing directly to radiologists and some to Netcare.

Remuneration for Work Outside the Public Sector (RWOPS)

The FDoH’s representative explained that the private healthcare sector is driven by financial incentives and that if a healthcare professional is called by Netcare to do some private work, and they still have to see poor people in their capacity as public sector doctors, “we know where they are going to go”. The FDoH reminded the Panel that this is even more distressing because in the environment of the Netcare PPP is using the state’s equipment and premises. The health professional simply walks out of one room in the hospital where she is providing public sector services into another one in which she is performing private services.

The problem became so bad, according to the FDoH, that health professionals were leaving their posts during “peak hours” (10am – 2pm) to other rooms in the same hospital to do private work. This resulted in the “juniorisation” of the system – junior health professionals taking charge of tasks that should be led by seniors who were off doing private work – which ultimately had a poor effect on quality of services. The FDoH noted that this “juniorisation” led to “many” sets of litigation a junior professional made an error a senior might have avoided.

The FDoH said the biggest problems with RWOPS are at academic hospitals and with regard to “super specialists”. There are even possibly problems with doctors who have academic, service training functions doing private work while they are supposed to be performing teaching functions.

The Chief Justice asked the FDoH whether the major problem with RWOPS was that they are generally difficult to monitor. The FDoH agreed that in principle there is no problem with RWOPS and the biggest issue does arise because there is not a good enough monitoring mechanism.

RWOP litigation

As a result of all of these problems in 2014, the FDoH determined that RWOPs would not be permitted between the hours of 7 30am and 4pm. This was an attempt to take a middle ground approach because the reality in the Free State would not allow for the absolute approach against RWOPS taken in KwaZulu-Natal.

Though this instruction is being reviewed by the Free State High Court – in a matter that will be heard in July this year – according to the FDoH it is still currently being implemented. In response to questioning from Dr Bhengu, the FDoH acknowledged that this litigation has caused a “toxic environment” in which the FDoH lost the services of approximately 50 specialists who left for the private sector, academic posts or on early retirement although “some are moving back towards the public sector”.

In response to a question from the Chief Justice a representative from the FDoH in the legal services department explained that the basis for the review of the department’s instruction with regard to RWOPS was not the concept of RWOPS in principle but the FDoH’s alleged procedural failure to consult healthcare professionals in making this determination.

The FDoH was adamant that RWOPS are not a right but a privilege and although in the short term they need to be standardised in the long term legislation and regulations need to provide a “better strategy” to ensure specialists have everything they desire in the public sector and are paid enough to devote all their time to it.

Public Sector Dumping

The FDoH told that panel that the department frequently receives calls from private hospitals to say that because a patient’s medical aid is exhausted she needs to be transferred to a public hospital.

They noted that there were other shocking examples where a baby and its mother were separated based on money. The mother was admitted and gave birth at a private hospital but because the baby required neonatal care not covered by the mother’s medical aid the baby had to be transferred. The baby died. The FDoH asked “what happens when a patient is lying in ICU and runs out of funds? What is the medical aids responsibility?”

FDoH cited another example about a patient from Lesotho who was admitted to a Mediclinic hospital in Bloemfontein. The patient had a “drug reaction” and had to be transferred to an ICU. When the patient’s medical aid ran out the hospital called the patient’s family in Lesotho to come and collect the patient and the “they ended up in my office for help”. “We need to end this”, added the FDoH’s representative.

Emergency Medical Services

Equally jarring was the FDoH’s description of current issues created or contributed to by the private sector in the Free State with regard to emergency medical services.

First, the FDoH explained that it is possible that private ambulances have been known to arrive at the scene of an accident and then only service patients or victims who are covered by medical: “sometimes they [private ambulances] do not touch patients or victims if they are not covered”.

The FDoH’s representative cited an example in which there was an accident near Bethlehem and the three people involved in the accident who were covered by medical aid were taken to a nearby Mediclinic while all other people involved were simply left to wait for a public ambulance. The same is true, he said, of patients with medical aids who run out of funds where private ambulances might even refuse to take them to a public hospital for a necessary transfer.

Second, according to the FDoH, private hospitals will not admit patients carried by public ambulances even in emergencies. As a result, he explained, a public ambulance could drive past two or three hospitals and it won’t even try and stop “because they know that the patient is poor and will be rejected”.

When asked by the Chief Justice about the private sector’s attitude to individuals without cover in need of emergency services, the FDoH’s representative repeated “they always check first for medical aid” even “at an accident scene”.

Third, even when private ambulances do pick up patients without medical aid it is only to take them to public facilities even if there are nearer by private facilities. They do this, the FDoH explained, only because the Road Accident Fund will reimburse their transport costs. “Your destination [public or private] is determined by your ability to pay”, he concluded.

Though acknowledging that these problems in emergency medical services are big in the Free State, the FDoH’s representative noted that these problems are nationwide. He concluded that “some of these things don’t need regulation, they just need us to be more human”.

Limpopo Department of Health

Next, the Panel heard from the Limpopo Provincial Department Health, which was represented by the Acting Head of Department, Dr Peter Kgaphole who led the submission. Dr Kgaphole was accompanied by Dr Pinkoane, Mr Ramulayi, and advocate Ramothopho

There are 5668 hospital beds in the public sector in Limpopo and 925 beds in the private sector, with the highest number of private beds being in Polokwane.

The provincial Department of Health in Limpopo considers the proposed number of personnel and locations when deliberating a license application for a private facility. Applications are scored based on this initial process and if approved are passed on to the infrastructure team within the Department. Following the consideration of the infrastructural development plans the next steps of the process are taken by the technical and adjudication committee before finally being brought to the office of the Head of the Department. The HOD approves or declines the application and communicates this decision in a letter to the applicant. If an application is rejected the reasons for the decision are not provided in the letter but can be communicated to the applicant through an appeal process. Dr Kgaphole emphasised that this letter does not constitute a license, but is merely permission to plan and erect, a license is eventually issued before a facility can operate. Also, applicants are directed to build under the regulations of the municipality at which the hospital will be located. Once a license is granted, it is valid for 12 months and is subject to renewal after this period.

Dr Kgaphole admitted that there are several cases where permission has lapsed because the applicants fail to develop the facility. One of the challenges experienced by the province and new entrants is the lack of specialists, and often they have to recruit from Gauteng. Often specialists from other areas come to underserved areas on a sessional basis, especially those who operate within a group practice and can therefore visit the area interchangeably.

Applicants, he said, often frivolously submit applications and have no clear understanding of the purpose for tendering an application. He added that most of the applicants lack an understanding of the Department of Health’s policies and guideline and reiterated the concerns of other provinces that there is a deficit in application from districts which need private facilities.

Recently the Limpopo Health Department was approached by the Industrial Development Corporation, which asserted that they had been mandated by parliament to consider how they could support rural areas. The Department was hopeful that IDC would assist applicants who have permission to plan and erect, but were otherwise unable to secure funding. To date however, they are not aware of any applicants who have been funded by IDC.

In response to one of the recurring questions from the Panel relating to lapsed licenses, Dr Kgaphole explained that in the most part applicants lack the expertise and capital to develop and eventually operate private hospitals. Also, he expressed that instead some applicants use the permission letter to fraudulently extort money from potential funders and never develop the hospitals.

The license in the province is granted to operate and so aspirant entrants begin building before the license is conferred. The Department carries out inspections at the construction site to satisfy itself that the players are able to recruit the appropriate personnel and get equipment before presenting them with a license.

The Panel was also very interested in how the Department attended to the provinces challenge of attracting specialists. A few of the representatives from the Department provided examples of collaborative efforts undertaken to train and draw in specialists. The Department has started targeting medical schools and presently works together with the University of Cape Town to train specialists who will come back to work in the province. United Nations’ volunteer doctors and doctors produced through the Cuban government cooperative program are allocated to rural areas which is useful to extend access.
The National Pathology Group
The National Pathology Group (NPG) consists of competitor pathologist groups and is part of the South African Medical Association as well as the South African Private Practitioners Forum. It has 295 members.

Dr Erasmus, the NPG’s President, led the presentation and explained that pathology is a referral practice about diagnosis of diseases. Several doctors also made oral submissions to the panel, including a histopathologist and Medical microbiologist. They explained the kind of diagnoses they make and the interaction with the clinicians, whom they advise on diagnosis and course of treatment. The microbiologists in particular, also offer infection-control and antibiotic management in private hospital facilities together with a range of clinicians and hospital management. Pathologists detect life threatening diagnoses involving meningitis, septicaemia, rubella in pregnancy, hepatitis, resistant bacteria and communicate their results to the treating doctors to enable proper treatment.

The recurring theme of quality of health services arose during the oral submissions, in particular in the discussion on professional accreditation. According to Dr Erasmus, laboratory accreditation is voluntary and is conducted by the South African National Accreditation System (SANAS) on the basis of internationally recognised standards. Dr Erasmus claimed that no other medical profession does this. Over 90 percent of private pathology groups are accredited. The accreditation focuses on quality management systems and on technical aspects of the practice. When questioned by the Chief Justice, NPG stated that such accreditation does include patient satisfaction information. However, it was clear that the information gathered in the accreditation process is not available to the public in any understandable format and could not be used by a patient to decide on which lab visit for a particular pathology service.

The panel interrogated the role of SANAS and whether the accreditation process could be taken further to produce information that would indicate the quality of services at a particular facility, so that patients could choose services on the basis of quality. This is an ongoing point of discussion in the inquiry.

In respect of utilisation, another common theme, NPG suggested that utilisation is driven by age and disease burden and stated that pathology cost increases are not out of line with general trends. In total, 5.1 percent of medical scheme gross contributions go to pathology services. Professor Fonn questioned the increasing cost of pathology services, which, according to the data presented, increases at a high rate even taking account of utilisation. She also questioned the reliance of the actuaries appointed by NPG on the Council for Medical Schemes data instead of their own members’ data, which could be obtained directly from the members. The NPG’s lawyer responded that the concern about breaches of competition law led to the reluctance by members to share the data, even with a third party. He noted that it is a very real risk for members and that complaints had been made to the Completion Commission in this regard.

Employment of doctors
The employment of doctors by private hospitals has been discussed by most practitioners during these public hearings. NPG believes that employment of doctors by hospitals is not appropriate because of the risk of commercial pressures that could lead to unethical behaviour on the part of pathologists. The Chief Justice, Dr van Gent, Dr Nkonki and Professor Fonn all questioned the NPG rigorously, particularly given that the pathologists practice in corporate groupings and are effectively employed by them, so what is the difference? Indeed, partners get paid salaries commensurate with the level of performance and as partners get an annual dividend. The answer, like with other practitioner groups, is that the practitioners’ only concern is the clinical practice and not the commercial incentive. Employment by private hospitals could lead to the loss of control over their clinical performance, which would be driven by the profit motives of the hospitals rather than the ethical motives of the individual practitioner. This is difficult to reconcile in light of the way the profession is organised into corporate partnerships. Professor Fonn in particular questioned the notion that doctors are perfect human beings, with only the purest of motives.

Add on testing and stakeholder complaints
NPG responded to the comments made by other stakeholders concerning the tests done by pathology labs in the absence of requests from the doctors. Dr Erasmus explained that there are several good reasons for this. In some circumstances it would be irresponsible not to follow up with additional tests and in some situations, it would save patients the cost of additional visits to doctors. In other circumstances, the doctors order additional tests based on initial findings.
Dr Nkonki raised some complaints made by other stakeholders about the charging of specialist fees for tests conducted by medical technologists and specialists, or specialist fees charged for results generated by computer with no interpretive report. The members of the NPG indicated that it was reasonable and common practice. Specialists set up the algorithms for testing, which take skill and experience, and therefore the charge is justified.

Dr Bhengu asked if the NPG has role or responsibility in driving transformation in the sector. In answer, Dr Erasmus said that while the NPG might be aware of the BEE status of its members, the NPG has limited resources and effectively consists of himself and a personal assistant. It therefore does not have the capacity to monitor transformation or do anything about it. Having said that, member of the NPG do offer training space for the training of registrars on request by the National Health Laboratory Services.

On tariffs, NPG stated that it does not have a view as a group, but that members negotiate with the schemes individually. Dr Erasmus believes that regulation would be counterproductive in the long term. Indeed, he said, free market competition is far better.

NPG has Guide to Coding, which is a list of tests’ Relative Value Unit but has no price attached to the tests. The rand value would be determined by each practice and medical scheme. The guide is available to the public.

Professor Fonn asked whether automation does not save costs and if new technology has become cheaper, why we see no transfer of the benefit of savings to patients. Dr Erasmus answered that in fact the savings are transmitted and comparing price increases per unit of service to clinical services, pathology is increasing at a lower rate. In other words, the increased efficiency has been passed to patient in the quality and variety of services available.

For more information contact:
Umunyana Rugege at
Tim Fish Hodgson at
Luvo Nelani at


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