Date: 08/08/2007
Source: Department of Health
Title: SA: Tshabalala-Msimang: Meeting with private healthcare industry

Address by the Minister of Health Dr Tshabalala-Msimang on emergency meeting with the private health industry

I would like to thank all of you for taking some of your precious time to be part of this meeting at such short notice. In our view, this meeting is a continuation of a consultation process aimed at resolving some of the challenges facing us in improving access to affordable and quality healthcare.

We fully acknowledge the role of the private sector, alongside the public sector, in the delivery of health care services to all our people as directed by the Constitution of our country. At the same time, we recognise the need for the private health sector to play a meaningful role, complementary to the public health sector. It is an important relationship that has to be harnessed to ensure that we meet the healthcare need of the people of South Africa.

Over the past few weeks, there have been numerous reports in the media on certain undesirable and in some instances unethical business practises in the private sector. I have also been quite concerned about what I have been hearing from different stakeholders almost on a daily basis.

The consumer is the weakest player in all of this. These consumers are complaining, correctly so that their premiums are increasing but the package of benefits is shrinking.

They are also concerned that they are increasingly compelled to pay more on an out of pocket basis for consultation and drugs. Co-payments are rapidly increasing with more and more benefits being subsidised by consumers.

As if this was not burdensome enough, consumers have to pay providers directly and they are expected to thereafter claim from the Medical Aid, instead of these two parties, providers and medical schemes; settling the claims directly. The question is why should this entire burden have to be carried by the consumers who happen to be the weakest party in this sector?

I cannot help but emphasise that the practice of the out of pocket expenditure pushes consumers further and further into poverty and this undermines our broader objective of poverty alleviation as encapsulated in the Millennium Development Goals (MDGs) and the Programme of Action of our government.

If we are to make further progress on achieving these Millennium Development Goals, the private health sector must show commitment in reducing the catastrophic costs of ill health for these consumers.

Each time I have tried to raise the issue around cost in the Private Health Sector, one role player blames the other. As we were bringing down the price of medicine including the issue of benchmarking, the pharmaceutical sector said that they were not the main cost drivers and that we should be looking at other role players.

Brokers have complaint that they are not paid enough and they have requested me to adjust their fees from this month. Medical Scheme administration costs now exceed the cost of medicines.

Medical schemes are upset that the private hospitals and specialists have reduced them to the level of price takers rather than price makers. Doctors and private hospitals are also upset that medical schemes are reversing their claims.

No one seems to be happy and this situation is untenable.

Ladies and gentlemen, the fact is that the national health system is for us all and not for a few.

I am saying this precisely because, over the past years, we have introduced measures to improve access to good quality and affordable private health care. We are also incorporating these principles into the Health Charter which I hope will soon be finalised.

It disturbs me to have to make this observation to an illustrious gathering of our business community. But there is nothing so frustrating that there are some shades of undesirable business practices that undermine our legislative and policy framework and more importantly our people.

As the Minister of Health I have the responsibility to play a stewardship role over the whole health system. This includes not only the public health sector but also the private health sector. I have in the past stood back to allow the private sector to sort itself out. Regrettably, there has been no sign of progress in this regard. I have therefore decided to convene this meeting to address these issues.

I honestly appeal to you all that we to work together as South Africans towards the creation of the national health system that is caring and humane and through which all South Africans must have access to affordable, good quality healthcare.

From this meeting, we must agree on how we are going to address issues of costs, affordability, access and sustainability in the entire healthcare system. I call upon all of you to make recommendations on how the private health sector can respond to the aspirations and the needs of the people of our country.

I will now open this meeting for you to put forward your view points.

Issued by: Department of Health
8 August 2007