28 February 2008, Cape Town
CEOs of Hospital Groups
Distinguished Guests,
Ladies and Gentlemen
Good Day,
It is with great pleasure that I address you this morning as we try to find the way forward in making health care more affordable for all South Africans. At the last meeting we had in January 2008, we had agreed that we would meet again at a later date to finalise the way forward on the recent tariff increase announcements by the private sector hospital groups.
I have on several occasions emphasised that the ultimate responsibility for a country's health system performance lies with government. To us, the health of our people is always both an asset and a national priority. In fact, the Cabinet lekgotla as well as the ANC Lekgotla have identified both health and education as key priorities. As the Minister of Health I have a continuing responsibility to safeguard the health of all our citizens. I am stressing this point as I am not just responsible for the public sector. I am also responsible for patients who use the private sector. To this effect, the sustained cost escalation in the private sector continues to be a major area of concern for the Department of Health, for me personally as well as the population of South Africa. I have been inundated with calls from citizens who are unhappy with the high costs of health care.
At the launch of the 2007 South African Health Review in Cape Town, I noted, that after thirteen years, we need to objectively ask- "where are we and how much have we achieved. But more importantly - what still needs to be done". I believe we have achieved extensive transformation on the funding side of our health care system. The gains from the Medical Schemes Act of 1998 and its accompanying regulations have been commendable as a key cornerstone to governing the activities of the private health care industry.
I personally and the government specifically, will continue to take a keen interest in the developments in the sector, and in its influence on the health status of the population.
The private health sector is a significant part of our national health system as it plays a complementary role to the public health system. The Department has no doubt that it does and must continue to play a key role in the provision and financing of health care for our population.
Over the past few years government and various stakeholders have engaged in healthy discourse concerning the most appropriate manner in which good quality health care can be accessed by all citizens at affordable costs.
Clearly this discourse and engagement continues to shape the national health system and is assisting to achieve the vision of improving access to health care for all. However, at all times we must keep in mind that the WHO Report has ranked us very low because of the inequities between the public and private sectors. In addition I am also concerned that some private hospitals are deteriorating in the quality of care. I have recently had a report from a person who delivered a baby, that the conditions in the private hospital were shocking. The infrastructure was deteriorating, paint was peeling and the toilets were in a bad state. We cannot allow the motive for financial gain override the drive for quality health care. We must be vigilant to ensure that these problems are corrected. We must also be vigilant to ensure that there is no abuse of patient records and patient confidentiality. This will be a violation of the National Health Act.
More recently, the Private Health Sector Indaba held last year in September 2007 had provided an opportunity for the Department of Health to engage with stakeholders on matters relating to costs of services in the private health industry. At the Indaba I had raised a number of key issues particularly in relation to the significant increases in specialists' costs, the small increase in medical schemes membership and more relevant to this meeting the significant increases in expenditure on private hospitals. Critical among these issues raised was the fact that efforts will be directed towards ensuring minimal tariff increases in the coming financial years which was agreed to by those who attended that meeting.
However, as we are aware, the recent tariff increase announcements have not met this understanding and we are yet again back at the table and trying to ensure that costs are contained. I must say that some of you have responded positively to our call by announcing that you will keep tariff increases to CPIX. To those who did this, I thank you.
This task remains a major challenge for all us not only because of the growing disparities between the public and the private sector but also because of the increasingly smaller number of people who can sustainably afford to access and utilise private sector services.
We have all agreed, that our focus in 2008 is to ensure that the private health industry does genuinely address the problem of cost escalation and that this manifests itself into lower and more affordable tariffs for the population. Our primary recommendation for containing cost escalation in the industry is that all the proposed tariff increases must be capped at the average CPIX for the previous financial year. The CPIX figure that must be used is the official figure as announced by the Minister of Finance in his budget speech.
The above recommendation has been carefully made following the meetings that the Department of Health has had with the various hospital groups. You have had the opportunity to present reasons as to why you believed it was necessary to have a higher than inflation increase for the private hospitals. All of you have argued that increases in public sector nurse salaries has necessitated concomitant increases in private sector nurses salaries. You have all argued that this has been the main cost driver.
You had been requested by the Department to provide information on the current salary structures of nurses and provide evidence to confirm your claim regarding the extent to which salaries have increased. My officials have informed me that this was not provided. I also need to point out incidentally that during a recent talk radio programme a nurse called in to dispute claims by the hospital groups that nurse salaries have been increased beyond inflation.
Taking all of this into account, I do not believe you have provided sufficient evidence that the tariff increases you proposed are warranted. It is for these reasons that I am recommending that tariff increases are capped at CPIX.
In terms of inhalational anaesthetics we have decided that:
Colleagues, I have dealt with the immediate issues of the 2008 tariff increases and billing procedures. Let me now turn to future policy proposals. You have all indicated at the private sector indaba that you want government to take the lead. You have requested that a legislative and regulatory framework is put into place to promote transparency in the pricing system, and ensures sustainability of the sector in the long term. I have taken this advice very seriously, and to this end I will be introducing an Amendment to the National Health Act to deal with financing and pricing issues. The principles that this amendment will deal with are:
I will be discussing the details of this amendment with the MECs for Health tomorrow, and then tabling these proposals in Cabinet. Once this is done, I will table the proposals to you for comment.
In addition to the above amendments to the National Health act, I am pleased to inform you that within the next month I will be tabling the Medical Schemes Amendment Bill to parliament. The Amendment Bill will focus on four areas namely:
You will all have a chance to participate in the parliamentary process. I urge you to contribute in a constructive manner to ensure that at the end of the day we all achieve the principles we hold dear: A quality health system that is affordable to all.
Colleagues, as we move forward let us find solutions that meets the expectations of the general public - that health care is made affordable and that private health sector services are not systematically made exclusive only for those with reasonably high incomes.
I anxiously look forward to us bringing this matter to conclusion today and reaching a decision that clearly benefits the consumers as they are the ultimate reason we are gathered here today.
I thank you.
For more information call Sibani Mngadi on 082 772 0161.