Sources: SA Health Review 2019, Day et al * | www.provincialgovernment.co.za/units/type/1/departments | StatSA Mid-Year Population Estimate 2020 & Council for Medical Schemes Data for 2020 | MMR Data (DoH, 2017) per 100,000 births |
The number of personnel and hospital beds per 10,000 uninsured citizens show somewhat more variance across provinces than their per capita budgets, although these factors are determined by the provinces. There can also be greater variances between provinces in medical provider densities of specific disciplines, which are driven by structural features. For example, the density of medical specialists will be highest in provinces with the most tertiary and central hospital beds.
As can be seen above, the latest financials show that the state had a medicolegal liability of nearly R120bn as at 31 March 2021. There have been no meaningful measures proposed to manage this gargantuan liability, save for a request by the Minister of Justice in 2017 to the SA Law Reform Commission to undertake research on the matter and offer recommendations. This resulted in a paper that mainly dealt with legal aspects of the rise in medical malpractice liability claims and possible legal solutions to dealing with them, but there is no focused attention on avoiding liability by improving the quality of care delivered.
Recently, President Ramaphosa announced that he had instructed the Special Investigating Unit (SIU) to discover fraudulent medicolegal claims against the state. While this is a step in the right direction, it again points to a dysfunction within the public sector, where such nefarious activities are enabled. It would be naïve to believe that all medicolegal cases against the state are entirely legitimate, but in many cases they are either not defended or the defence lacks any vigour, thus leaving the state exposed unnecessarily to this growing liability.
Medicolegal liability provisions have similar attributes to government borrowings in that they are not payable immediately, but once they amass to these levels, they can threaten the country’s long-term financial stability. If the current national trend continues, this liability will be over R200bn by 2024/25, which I estimate will equate to around 75% of the DoH’s entire annual budget.
Unless the health department can address the poor quality of care in the public sector and the levels of corruption and cadre deployment that hamper proper management, these growing liabilities will massively undermine the state’s ability to improve healthcare. Sadly, this has become a vicious cycle, as one failing (exposure to liability) leads to the other failing (poor quality healthcare) which leads to further liability and so on and so forth.
In terms of the proxy performance indicators in Table 2 above, namely maternal mortality rates and medicolegal liabilities, the Western Cape is clearly an outlier among the provinces, even though it has similar financial, human and facility resources to the other provinces. The Western Cape’s medicolegal liability is a comparatively insignificant R80m, equating to only 0.3% of the province’s budget, whereas for the rest of the provinces the liability equates to 57% of their combined budgets.
In an expert review of the NHI proposal by Professor van den Heever, a health economist from Wits University, he confirms that maternal mortality rates (MMR) are generally accepted as a proxy indicator for institutional management performance.
The Western Cape’s substantially superior outcomes in MMR, along with their insignificant medicolegal claims, provides a clear indicator that with better management and governance, significantly improved outcomes are possible in the other provinces ‘within their current resource allocations’.
The above overview provides a clear picture that public sector performance should be considerably better.
Outcomes and quality are clearly not where they should be and the reports from the OHSC provide a strong indication that the key problems are a lack of proper governance structures, poor management of facilities and accountability. The Auditor General’s findings on the health department corroborate the findings of the OHSC, also routinely highlighting governance failures and poor management capabilities.
“The country’s health services are in crisis!”
Kimi Makwetu, The late Auditor General, 2019
I showed in article 2 that public sector expenditure has been growing substantially in both real and per capita terms for the past two decades and we compare favourably in public expenditure with other upper middle-income countries. The number of medical personnel employed by the state also increased very substantially during this period.
The Western Cape is the only province in the country governed by the Democratic Alliance, and evidence suggests that they have been able to contain corruption and cadre deployment to a far greater degree than the ANC, and hence maintain better governance frameworks and retention of qualified managers within their health facilities. This more likely explains their substantially better performance on maternal mortality rates and comparatively non-existent medicolegal liabilities.
This is a strong indicator that the poor performances of the other provinces are caused more by institutional management failures, poor governance and the resultant malfeasance rather than from an insufficiency of funding or personnel.
Michael Settas is Managing Director at Cinagi, a company which specialises in innovative health insurance solutions for corporates and private individuals. He is also Chairman of the Free Market Foundation's Health Policy Unit.