A generous dose of private healthcare to cure what ails us

18 August 2017
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Few things violate the rational mind as much as the disruptive policies the minister of health prescribes for private health providers and the country.

The public health care services, for which he bears direct and ultimate responsibility, are in a calamitous state, to say the least. His policies defy economic logic. They play to the gallery and purposefully ignore how the cost implications will impact the quality of health care services, especially those accessed by the poor. 

Supposedly to rectify this progressively, worsening statist state of affairs, the minister of health wants to implement additional frighteningly comprehensive, interventionist dirigiste policies that will further choke the demonised private health providers and exacerbate the state of both private and public health care. The situation, ‘too ghastly to contemplate’, is depicted by the following facts of public health care, among others.

A recent failure caused by the downward spiral of public health care in this country was the Esidimeni tragedy. Ninety-four people died when the Gauteng Health Department moved them from Life Esidimeni and other facilities, to NGOs. The former Gauteng Health MEC, Qedani Mahlangu, repeatedly claimed that the move was carried out to save the department money. Life Esidimeni was costing too much so the department had to ‘outsource’. To not expect similar or greater tragedies to happen once government controls all health care, is deluded. 

When businesses compete for our money, services and products dramatically improve and innovation thrives. When government has a monopoly, failures and incompetence are the order of the day. Early in 2017, Gauteng legislature member, Jack Bloom, revealed that Jubilee Hospital is the most dangerous in Gauteng. To measure the performance of hospitals, Bloom used the standard of ‘serious adverse event’ (SAE) which he explained, “is defined as an event that results in an unintended harm to the patient by an act of commission or omission rather than by the underlying disease or condition of the patient. This can involve negligence‚ staff incompetence and system failure”.

Jubilee District Hospital, a state hospital, recorded 51 SAEs in 2015. The standards upheld in public hospitals just do not compare with those in private institutions. The private options, certainly, may cost more money, but the value received in return is a lot more.

In 2015, more than eighty-thousand new-born babies died within two years through negligence and poor-quality healthcare in public hospitals. The Medical Research Council’s ‘Saving Babies’ report revealed that the deaths were not the result of rare, incurable emergencies or diseases but instead could have been avoided had simple guidelines been followed, from monitoring the heart rate of the foetus to looking at the overall health of the mother. Unfortunately, public health care does not encourage accountability and excellence. We will see more tragedies like this.

An enlightening truism is that wherever public private partnerships are implemented, in whatever economic or business context, the consequences are, invariably, markedly improved efficiencies. The logical extension of this reality is that when things are in the hands of the state, they tend to be in a hell of a state. When providers have to compete with each other for people’s money, the consequences are excellence and optimal efficiencies. Characteristically, highly incentivised private enterprise is based on attenuating and managing risk to ensure that returns accrue on investment. And this all occurs amid unrelenting competition. When failures occur, private enterprises do not receive taxpayer funded bailouts, whereas public enterprises enjoy relatively unlimited taxpayer-funded subsidies with government as the conduit.

Once government health crusaders have established their NHI plan, who do you think will pay for the failures? The embattled South African tax-payer, of course. In response to questions in the Gauteng-Legislature, Gauteng Health MEC, Gwen Ramakgopa, revealed that Gauteng’s health department had paid just over R1-billion in medical negligence claims in the past two-and-a-half years. Most of the claims were for babies born with brain damage at Chis Hani Baragwanath Hospital.

Reportedly, the department currently has R13-billion worth of claims lodged against it. While it is gratifying that the department has owned at least some of its mistakes by making a few pay-outs, it is doubtful whether monetary compensation can account for the damage done to patients which arguably amounts to criminal negligence. Of course, we must not whitewash the rare cases of negligence in private hospitals, but these usually do not take years to come to light and be resolved. The ability of government to be as murky as possible is unmatched.

The problem arises when people are forced to care for each other at the point of the government’s gun. Compassion ‘encouraged’ through force is devoid of real moral meaning. Regardless of the populist rhetoric, centralising policies always hurt the very people that are supposed to benefit. South Africans are caring people and are much better equipped to care for each other than any government bureaucrat – they should be left free to do so, instead of seeing their money wasted with funding one government failure after another.

There are concrete and feasible measures that can be undertaken by government to ensure that health services are available to the greatest numbers of people, especially the neediest.

Government could purchase access to quality health care for the poor on a strict means-tested basis.

Government should extend private public operations to cover all spheres of hospital care in public hospitals. 

South Africa’s Medicines Control Council should identify a handful of reference regulatory agencies that it deems competent throughout the world, for example, the U.S. Food and Drug Administration, so that when those reference authorities approve a new or generic drug, the drug can be deemed approved in South Africa. It takes three to five years on average for a medicine to be approved by the Medicines Control Council, Katherine Child reported in The Times, and one medicine has been on deck for seven years. The more control government has in healthcare, the longer it takes for medicines to be approved and the more people suffer and possibly die. 

Real, radical healthcare reform would mean that everyone can choose, within their own power, the healthcare that works best for them. Government subsidies will only inflate prices in the long-run and lead to more tragedies down the road. The tragedies mentioned here are the result of the nature of government bureaucracy – it is inefficient, costly, bloated and unaccountable.

Scurrilous red herrings such as ascribing robust criticism to manipulation by western interests is not going to strengthen the case for the looming NHI anaconda that will severely constrict the freedom of private health care providers to function efficiently and the patient’s freedom to choose preferred health care options.

The government should ditch the National Health Insurance. If the government is bent on implementing NHI, it should subject it to an objective, rigorous and extensive cost benefit assessment by an independent agency. There is too much at stake for this not to be undertaken.

At a time when populist rhetoric, political correctness and ideological zealotry seem to have seized the minds of policymakers, the following words are appropriate, “When you meet with opposition … endeavour to overcome it by argument and not by authority, for a victory dependent upon authority is unreal and illusory”, Bertrand Russell (1872-1970 – philosopher, logician, mathematician).

Temba Nolutshungu is a Director and Chris Hattingh a Researcher at Free Market Foundation.

This article was first published in The Gremlin on 7 August 2017

 

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