Important note: Information in this article was accurate in 2008. The state of the art may have changed since the publication date.
Sunday Times (Johannesburg) - February 11, 2008
Adele Shevel
The industry commissioned research into the contention after the private hospitals indaba in September and released its report this week.
The report refutes claims of super-normal profits, the term used when a company or sector gains a return on investment that is significantly in excess of the cost of capital.
The annual cost of private healthcare is said to be R75-billion for 7.1 million medical-scheme beneficiaries, compared with public sector spending of R59-billion for 38 million people.
But Kurt Worrall-Clare, chief executive of the Hospital Association of SA, said the statistics were not a true reflection of the situation.
"It is estimated that 41% of all interventions are in the private sector," he said.
"The assumption that only medical-aid beneficiaries consult in the private sector is inaccurate."
Research found that the consolidation of hospitals has not affected hospitalisation prices. It said hospital price increases exceeded the CPIX inflation measure by 1.7% a year, on average, from 1999 to 2006.
The research found that cost drivers included increased utilisation, the HIV-Aids pandemic and increased treatments for chronic diseases such as diabetes.
Of concern to private hospitals is the way the Council for Medical Schemes, which represents the medical schemes industry, measures data from hospitals.
"We need a uniform measurement," said Worrall-Clare.
Private hospitals have recommended that a new model of their industry be introduced to allow for the development of low-income hospitals. This would spur access and affordability, two key issues for private hospitals, and could include VAT exemption, lower costs of financing and cheaper pharmaceuticals for state patients.
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