Strategic Research on Governance, Equity and Health, South Africa
Market-led public hospital reform in South Africa: the equity and governance implications of public-private interactions within the public health system
In the last decade or so, certain South African public hospitals have created private wards that function within their physical and organizational boundaries. The dominant approach has been called differentiated amenities. Differentiated amenities typically involve the public sector hospital providing better hotel services to patients who are private in the sense that they pay for care on an out-of-pocket basis or through medical insurance. The public sector objectives for these wards include revenue generation, as well as other gains such as health personnel retention, new models of service delivery and better access for disadvantaged population groups.
International experience, however, suggests that this type of ward has much potential for promoting inequity within hospitals. The two key problems are the failure to generate sufficient revenue to sustain hospital-wide quality improvements, and the likelihood of resource allocations within the hospital becoming biased towards the private wards.
Against this backdrop, the Centre for Health Policy, University of the Witwatersrand, in November 2007 conducted a detailed case study of one hospital that had established differentiated amenities. The aim of this study was to assess the equity impacts of market-led public hospital reform in South Africa, and the design and governance factors influencing these impacts. The specific objectives were to:
- determine whether private wards raise sufficient revenue to generate a surplus and subsidy flow to public wards;
- assess whether, and why, public ward patients benefit from any use of surplus revenue generated through private wards;
- determine whether, and why, hospital resources are diverted from public to private wards, and whether this affects the quality of care offered in public wards;
- identify the main actors whose actions might undermine the attainment of equity objectives, and the factors influencing their actions;
- assess the operation of existing governance mechanisms in terms of their potential to prevent inequity resulting from the private ward operation; and
- assist policy-makers in developing appropriate governance mechanisms to ensure that private wards achieve their revenue generation and equity goals.
A hospital case study and policy analysis were conducted.
Findings
The most critical lesson from all provincial experiences is that there often seems to be little effort to monitor and manage the balance of overall relative benefit between public and private patients, despite the known dangers. These wards do not seem to function within any national guidance or frameworks. Where specifically asked, none of them could produce a policy document or operating manual that regulates their establishment and functioning, with respondents stating, for example, that they were bound by general governmental rules. And, as was seen from some of the interviews, there is sometimes doubt about the extent to which the public/private boundary is respected in the day-to-day actions and decisions of the people working in these wards. The available data on costs and revenue use also do not allow evaluation of the balance of overall relative benefit; and no-one seems to be charged with responsibility for using any data that exists or improving data availability to allow more careful management.
Given these experiences, this policy area of private wards in public hospitals therefore seems ripe for a more systematic approach in terms of which:
- Private wards are governed by explicit rules that take into account their specific nature and the dilemmas they are likely to encounter;
- Systematic thought is given to the whole range of benefits and costs that can accrue to both the private and public sectors;
- Serious efforts are made to measure and track these costs and benefits over time - to monitor the boundary between the public and the private – to ensure an appropriate balance;
- Systems are developed to ensure that the public system and public patients derive as much benefit from these wards as possible;
- Lessons are derived from existing experience and shared between hospitals and provinces.
Project description
Programme: Strategic Research on Governance, Equity and Health
Research title:Market-led public hospital reform in South Africa: the equity and governance implications of public-private interactions within the public health system
Thematic Research Area: Evidence to Policy
Grantee Country: South Africa
Grantee Institution: Centre for Health Policy, University of Witwatersand, Johannesburg
Program Coordinator/Principle Investigator: Lucy Gilson
Status of grant: Completed in August 2009
Related publications/Policy Briefs
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Final technical report, 2010
doc, 145kb -
Wadee, H. et al. (2007). Private wards in public hospitals: what are the policy and governance implications? Johannesburg: Centre for Health Policy. Research Report
pdf, 618kb -
Erasmus, E. et al. (2009). Private wards in public hospitals in South Africa: The policy context and models of operation. Johannesburg: Centre for Health Policy.
pdf, 432kb -
Policy brief, July 2010. The equity and governance implications of private wards in public hospitals in South Africa
pdf, 493kb