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Why private health care is expensive


Sep 10 2014 18:16 Fin24

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Cape Town – As the debate about who is to blame for high private hospital costs continues, Fin24 user "Z" – who works for one of the big private hospital groups – gives a behind the scenes look at what consumers should take into account.
READ: Debate on high private hospital costs heats up
He writes:

I am working for one of the big hospital groups and have been following the articles and would like to add some insight to the various comments.
Yes, the groups are in for the money and profit that can be made. It is after all a business.

The national department of health enforces regulations on private hospitals to which they can’t qualify in a million years.

The new buzz word is core standards, which the government will use to audit and inspect hospitals.

The fun part is that government inspects the private hospitals armed with lists of basic requirements to which not one government hospital could adhere.

This is nowhere mentioned or taken into account when government make statements of expensive private health care.
Medical equipment is very expensive. For instance, a hospital bed costs over R20 000 per bed. A theatre bed costs between R500 000 and R1 000 000.

Most of the equipment must be imported and thanks to the weakening rand the cost of equipment escalates by the week.
Capital equipment

Private hospitals need to manage the capital equipment and must provide for replacement of equipment according to international standards for asset management.

State hospitals do not replace equipment in three, five, eight and ten year cycles. They use equipment until it can no longer work or be repaired.
All equipment must be serviced as per original equipment manufacturer (OEM) recommendations. Some equipment must be serviced every three months or even monthly.

No need to explain that all serviceable parts are imported and are influenced by the exchange rate.

Small private hospitals may have up to 3 000 pieces of equipment that must be serviced during the year. This excludes breakages and damage to equipment.
State hospitals do not service their equipment regularly and don’t care about the medical legal risks should patients die due to equipment failure. They just handle the claims as they come.
Human resources
Private hospitals must adhere to every single occupational health and safety (OHS) regulation, but state hospitals ignore it or rather say they can’t adhere to it due to the size of infrastructure.

The same goes for basic conditions of employment, which government does not adhere to, but all private institutions must comply with. The effect on the costs where shifts are worked is very high.
Risk management is also fast becoming a big investment for private groups.
Staff are remunerated according to norms and standard and do get additional incentives, like subsidised meals, shares and even investment payments.
READ: Payment of private hospital staff questioned
Government hospitals do not have case management departments on the scale that private hospital groups have to ensure payment from the funders.
Few people know how big and expensive the background workings of private hospitals are.
Lastly, patients should stop and think for one moment how much it costs to provide TV’s at each bed and be able to order well-prepared meals from menus.
ALSO READ: Plea for more generous medical fee negotiations
– Fin24
Disclaimer: All articles and letters published on MyFin24 have been independently written by members of the Fin24 community. The views of users published on Fin24 are therefore their own and do not necessarily represent those of Fin24.