HCJ van Rensburg & JC Heunis

Hospital supply and management in South Africa: policy directions and challenges
HCJ van Rensburg & JC Heunis Centre for Health Systems Research & Development General Practice & Hospital Management, Dubai, 8-9 Dec 2016

Outline Hospital supply and management… South Africa Post-apartheid South Africa – 4 visions, 2 reform waves, 6 challenges Background Healthcare and hospitals in apartheid society – a brief overview Origins and consequences of apartheid for society, healthcare and hospitals Structural features established before apartheid reaffirmed, strengthened and expanded Public hospitals during apartheid Change in public and private hospital bed availability after 1994 Policy directions Vision 1: Non-racially segregated society, healthcare and hospitals and Vision 2: District-based primary health care (PHC) Policies to reform healthcare Policies to reform hospitals Reform Wave 1 – 1994 onwards – some successes Reform Wave 2 – 2007 onwards – need for reprioritisation and revitalisation Vision 3: Universal health coverage (UHC) and Vision 4: Re-engineered district-based PHC District hospital’s role in the re-engineered PHC district health system (DHS) National health insurance (NHI) – and hospitals within NHI Questions about NHI – and hospitals within NHI Challenges Challenge 1: Deteriorating health condition of the population Challenge 2: Poor healthcare governance, management and performance Challenge 3: Poor public hospital governance, management and performance Persisting hardcore issues – also with reference to hospitals Challenge 4: Inequality in distribution of hospital beds Challenge 5: Inequality in distribution of human resources for health (HRH) Challenge 6: Remaining and deepening inequality and inequity in society, healthcare and hospitals Conclusions

Hospital supply and management… South Africa
Background Healthcare and hospitals in apartheid society – a brief overview South African history = fragmentation of healthcare and hospital services, not only geographically, but also based on race (population group) and class (socioeconomic group). ‘Grand apartheid’: four provinces and ten bantustans ‘New’ South Africa: nine provinces

Origins and consequences of apartheid for society, healthcare and hospitals[1] Racial segregation and exclusion: 150 years of Dutch, French, German and British settlement and contingents of settlers 100 years of British colonialism – emergence of racial segregation and exclusion. Independence from British colonialism and unification in 1910. Deep-seated structural distortions in healthcare: healthcare and hospitals concentrated in urban areas; rural areas were left underprovided and understaffed. Structural features established before apartheid reaffirmed, strengthened and expanded[1] Rise of Afrikaner nationalism – legalisation of Apartheid (after 1948) and subsequent Grand Apartheid (Bantustan policy – 1960s and 1970s). Dominance of Western-scientific, curative, hospicentric and medico-professional healthcare. Expansion of pluralistic structure of healthcare. Rural-urban differential: healthcare and hospitals concentrated in urban areas. Consequences: Highly inequitable, exclusionary and discriminatory healthcare and hospitals – based on race, class and geographic location.

Public hospitals during apartheid
Hospital supply and management… South Africa Public hospitals during apartheid Hospitals themselves had an ‘apartheid design’: “When the original core of the old Groote Schuur Hospital was built in the early 1930's, segregation was designed into it. There were two ‘sides’ - a ‘white’ side and a ‘non-white’ side, each containing approximately equal numbers of beds – ‘separate but equal’. Only one nurses' home for whites was built on site. In later years a second nurses' home - for ‘coloureds’ was built 9 km away in the relevant group area.”[2] During apartheid public hospitals were be controlled by either the NDoH or in the bantustans by ‘Own affairs’ departments. By the end of apartheid, 14 health departments existed with (systematically underfunded) health services focused mainly on hospitals.[3] 1988 – report: “The government spends about $22 a day per patient at Baragwaneth, which serves Soweto`s 2 million blacks, compared to about $100 per patient at Johannesburg General, which serves about 500,000 whites…”[4]

Patients sleeping on the floor (1988 – Chris Hani Baragwanath Academic Hospital)

Change in public and private hospital bed availability after 1994
Hospital supply and management… South Africa Change in public and private hospital bed availability after 1994 Decrease in number of public hospital beds result of HRH shortages (particularly doctors and nurses) in and shrinking budgets for public hospitals. Increase in the number of private hospital beds took place despite national PHC approach. Related to deteriorating conditions in public hospitals and to lenient government policies – such as non-implementation of Certificate of Need which implied unrestrained expansion of private hospitals; i.e. the infamous ‘policy-implementation gap’. - 20.7% + 32.7%

Policy directions Reform Wave 1 – 1994 onwards
Hospital supply and management… South Africa Policy directions Reform Wave 1 – 1994 onwards Vision 1: Non-racially segregated society, healthcare and hospitals Vision 2: District-based primary health care (PHC) Policies to reform healthcare: Reconstruction and Development Programme (RDP) (1994).[6] National Health Plan (NHP) (1994).[7] White Paper for the Transformation of the Health System (1997).[8] White Paper on Transforming Public Service Delivery (1997).[9] National Health Act (NHA) (2003).[10] Policies to reform hospitals: Uniform Patient Fee Schedule (UPFS) (2000).[11] District Hospital Service Package: a set of norms and standards (DHSP) (2002).[12] Reform Wave 2 – 2007 onwards Vision 3: Universal health coverage (UHC) Vision 4: Re-engineered district-based PHC Policies to reform healthcare: PHC Re-engineering (2011).[13] National Health Insurance (NHI) Green Paper (2011).[14] National Development Plan 2030 (NDP) (2015).[15] NHI White Paper (2015).[16] Policies to reform hospitals: Policy on the Management of Hospitals (2011).[17] Office for Health Standards Compliance (OHSC) (2012).[18] Policy on the Management and Governance of Public Sector Hospitals under the NHI (2015).[19]

Vision 1: Non-racially segregated society, healthcare and hospitals and Vision 2: District-based primary health care (PHC) Constitution (1996) – core principles: Liberal and an egalitarian society and healthcare system. Promotion of fundamental right to healthcare for all. Reform agenda of ANC-led government: Eradicate disparities, inequalities and inequities. Dismantle race-based laws, institutions (hospitals) and procedures that created and upheld racial deformities in broader society and health sphere. Aims for reformed healthcare and hospitals: Unifying fragmented healthcare and hospital services into a comprehensive and integrated National Health System. Reducing disparities and inequities in healthcare and hospital service delivery and health outcomes. Extending access to improved healthcare and hospital services.

Policies to reform the healthcare system
Hospital supply and management… South Africa Policies to reform the healthcare system Reform Wave 1 – 1994 onwards RDP (1994) – major initiative to redress imbalances of past. Among basic needs to be met were needs for a clean and healthy environment, healthcare and social welfare. NHP (1994) – drew parameters for future healthcare and hospitals: first and foremost, it emphasised belief in fundamental right to healthcare for all, and in the PHC approach. White Paper for the Transformation of the Health System (1997) – stated that decentralised hospital management will be introduced to promote efficiency and cost-effectiveness. White Paper on Transforming Public Service Delivery (1997) – set out eight (Batho Pele = People First) priorities to transform service delivery in public domain. NHA (2003) – provided for a coordinated relationship between public and private health establishments (including hospitals). Reform Wave 2 – 2007 onwards NDP (2015) – again endorsed need for increased management autonomy for public hospitals. NHI (2015) – introduced a fundamental overhauling of current healthcare institutions, in particular financing of national healthcare and hospital systems to secure UHC and thus greater equity and justice for all.

Policies to reform hospitals
Hospital supply and management… South Africa Policies to reform hospitals Reform Wave 1 – 1994 onwards UPFS (2000) – introduced to improve recovery of patient fees from medical schemes and other funds, and to reverse a marked decline in collection of patient fees. DHSP (2002) – stipulated norms and standards for clinical and non-clinical priority healthcare services in district hospitals. Reform Wave 2 – 2007 onwards Policy on the Management of Public Hospitals (2013): Appointment of competent and skilled hospital managers. Provision of accountability frameworks. Policy on the Management and Governance of Public Sector Hospitals under NHI (2015): Aims to improve governance, leadership and management of public hospitals to adapt to NHI.

Reform Wave 1 – 1994 onwards – some successes
Hospital supply and management… South Africa Reform Wave 1 – 1994 onwards – some successes Free health policies/services brought about greater access to care in public domain (including hospitals) for most deprived and vulnerable groups. District-based PHC system promoted comprehensive PHC, decentralised governance and management of health services (including hospitals), introduced interdepartmental and intersectoral collaboration, and broadened community involvement in health matters. Reprioritising of health budget to favour PHC made healthcare more accessible for poor and people living in deprived areas and narrowed funding differences between rich and poor provinces and districts. Expansion of a range of health programmes – especially PHC, revitalisation of hospitals; primary school nutrition programme and expansion of social grants for previously deprived and excluded groups – brought healthcare closer to large vulnerable and previously deprived subpopulations. Note: Much emphasis was placed on referral chain, with district and regional hospitals as end- destinations within health districts, and referring PHC clinics and community health centres (CHCs) being regulating filters to hospitalisation.

Vision 3: UHC Vision 4: Re-engineered district-based PHC
Hospital supply and management… South Africa Reform Wave 2 – 2007 onwards – need for reprioritisation and revitalisation Vision 3: UHC Vision 4: Re-engineered district-based PHC Minister of Health (2011)[20]: “If I have to define the present health care system I will say it is characterised by four very clearly identified negatives: Firstly, it is unsustainable. Secondly, it is very destructive. Thirdly, it is extremely costly. Fourth and last it is very hospicentric or curative in nature.” Reasons[1]: Unmovable legacy of apartheid healthcare and hospital systems – favouring of private healthcare and private hospitals so upholding entrenched race- and class-based divisions in providers and clientele components. Deficiencies and failures in post-1994 reform process itself: Flawed introduction of district-based PHC system. PHC implemented selectively – not comprehensively as staged at Alma Ata. Gaps between policy and implementation. Inadequate stewardship, leadership and management capacity at all levels.

How SHI might improve equity and sustainability[21]
Hospital supply and management… South Africa National Health Insurance (NHI) – and hospitals within NHI SHI/NHI presupposes/promises: Substantial cost containment gains (due to a single fund using a strategic purchaser and a single payer). Substantial additional resources to public sector (due to a SHI/NHI taxation). Hence, improved care for the poorest. How SHI might improve equity and sustainability[21]

NHI – and hospitals within NHI (cont.)
Hospital supply and management… South Africa NHI – and hospitals within NHI (cont.) General principles and premises of NHI: Basic premise to redress current fragmentation between public and private sectors. Cardinal features: universal access, mandatory prepayment of healthcare, comprehensive services, financial risk protection, a single fund using a strategic purchaser and a single payer.[1,16,22] Aims of NHI: To realign public and private sectors and to create a unified national healthcare systems To overhaul health financing system by pooling all resources in a NHI Fund. To ensure UHC of population, equal and just distribution of resources, and equitable access to (hospital) services. To focus health services on most important needs of population – i.e. quadruple burden of disease/colliding epidemics.

District hospital’s role in the re-engineered PHC district health system (DHS) In the integrated referral system the PHC clinic/community health centre (CHC) is the ‘regulating filter’ to hospitalisation. Essentially, the more effective healthcare provided at the PHC clinic/CHC level, the less the need for (expensive) hospitalisation. Sick person goes to clinic or WARD-BASED CHW visits patient at home PHC CLINIC/CHC CONSULTATION Referral required? No Treat as per protocol Yes Write referral letter Write feedback letter and refer to clinic for follow-up Arrange transport to district hospital Patient requires to see doctor? Send to hospital nurse or other appropriate professional No Provide treatment and advice Yes No Patient requires admission? Send to doctor’s queue HOSPITALISATION Yes PHC clinic/CHC-District hospital referral ‘cycle’[23]

Questions about NHI – and hospitals within NHI
Hospital supply and management… South Africa Questions about NHI – and hospitals within NHI Implementation of NHI is faced by serious economic challenges[24]: Public health budget is projected to increase from 4.4% to 6.6% of GDP. To finance estimated cost of ZAR 256 (US$ 18.2) billion in 2025/26 public health budget will have to increase by more than 10% annually between 2019/20 and 2025/26. Assuming a GDP growth rate of 2%, funding shortfall by 2025/26 is estimated at ZAR 108 (US$ 7.7) billion which will require total government revenue to increase by more than 10% by 2025/26. Is 6.6% of GDP to fund healthcare under NHI realistic? In 2015, South Africa spent 8.8% of GDP on healthcare if the further 4.6% of GDP spent in private healthcare is added to the 4.2% of GDP spent in public healthcare.[25,26] The total amount of available funding might thus not be the problem but rather its inequitable allocation across the public and private sector healthcare and hospital systems. Health expenditure, public as % of GDP – Selected countries[25] 1995 2000 2008 2014 Tanzania 1.4 1.1 2.4 2.6 Botswana 2.1 2.9 3.9 3.2 South Africa 3.4 3.3 3.6 4.2 Malawi 1.9 2.2 6.0 Australia 4.8 5.4 5.9 6.3 United Kingdom 5.6 5.5 7.2 7.6 United States 5.7 7.4 8.3

Free Market Foundation’s view[29]:
Hospital supply and management… South Africa Only 16% of state facilities passed NHI standards after they were inspected by Office for Health Standards Compliance, which looked at staff attitudes, waiting times and infection control.[27] NHI makes no provision for psychiatric care within community or at district hospitals.[28] Free Market Foundation’s view[29]: NHI seeks to nationalise healthcare and “extend the long and clumsy arm of government into that most private and personal area of our lives” … it will: Reduce quality of healthcare provision. Drive more healthcare professionals out of country. Impose an unnecessary and intolerable burden on both government and taxpayers. “It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it” (Thomas Sowell).

Challenge 1: Deteriorating health condition of the population
Hospital supply and management… South Africa Challenges Challenge 1: Deteriorating health condition of the population Only indicators that improved was infant and under-5 mortality. Life expectancy for both males and females decreased. Maternal mortality, TB incidence, and antenatal prevalence of AIDS has increased. Selected health status, mortality and morbidity indicators[30-35]: Life expectancy (years) – males: 62 (1990) – 61 (2015). Life expectancy (years) – females: 68 (1990) – 64 (2015). Infant mortality/1 000 live births: 49 (1994) – 34 (2015). Infant mortality/1 000 live births: 8.3 (whites) – 38.5 (Africans). U5 mortality/1 000 live births: 60 (1994) – 41 (2015). Maternal mortality/ live births: 108 (1990) – 138 (2015). TB incidence/ population: 225 (1993) – 834 (2015). HIV prevalence rate (% HIV+ women in antenatal care): 7.6 (1994) – 29.7 (2013).

Challenge 2: Poor healthcare governance, management and performance
Hospital supply and management… South Africa Challenge 2: Poor healthcare governance, management and performance Performance has been poor despite good policy and relatively high spending as a proportion of GDP[15]: Management of healthcare and hospital systems remains centralised and top-down. Poor authority, feeble accountability, low staff morale and lack of discipline characterise public healthcare and hospitals. Expressed needs of communities are not always valued and respected. Reasons for postapartheid record of suboptimal performance[1,36]: Complex and growing quadruple burden of disease: HIV and AIDS and TB High maternal and child mortality Incidence of non-communicable disease i.e. high blood pressure, and other cardiovascular diseases; Diabetes mellitus; chronic respiratory disease; the various cancers and mental health. Violence and injury. Weak monitoring systems. Loss of VISION to see PHC and DHS as basic building blocks of national health system. Neglect and inability to implement admirable plans and policies. Poor/inadequate stewardship, leadership and (hospital) management capacity.

Challenge 3: Poor public hospital governance, management and performance Considerable variation in district hospital performance[38]: Unit costs of maternity inpatient days ranged from US$65 to US$212. Bed utilisation rates (BUR) ranged from 39% to 68%. Average length of stay (ALOS) ranged from 3.0 to 8.8 days. Management of public hospitals has been characterised by over-centralisation – “Hospitals are simply administered by provincial health department head offices”.[15] Under-development of management systems and capacity at hospital level: Demoralisation and poor remuneration of hospital managers. Limited training, support and inadequate career paths for managers. Difficult for public system to attract and retain skilled managers.[39] Legitimacy and functioning of Hospital Boards has been undermined by over- centralisation, diminishing public accountability and trust in healthcare and hospital systems.[15,40]

Persisting hardcore issues – also with reference to hospitals
Hospital supply and management… South Africa Persisting hardcore issues – also with reference to hospitals Challenge 4: Inequality in distribution of public and private hospital beds Generally, more rural (and poorer) provinces are least provided with public and private hospital beds. Note: The total number of hospital beds (public and private) per population in South Africa in 2005 was 2.8. This compares with the UK and USA (both 3.0 [2011]) and is much higher than other African countries – Tanzania (0.7 [2010]), Malawi (1.3 [2011]) and Botswana – 1.8 (2010).[41]

Challenge 5: Inequality in distribution of human resources for health (HRH) Generally, more rural (and poorer) provinces are least provided with doctors and nurses. Provincial population and number of MPs and specialists in the public and private sectors (2015)[42,43] Province Population estimate (million) % of population % of MPs and specialists Number/ population Limpopo 5.7 10.4 3.6 26 Mpumalanga 4.3 7.8 3.7 35 Gauteng 13.2 24.0 35.6 110 Western Cape 6.2 11.3 22.6 149 Provincial population and number of nurses* in the public and private sectors (2015)[42,44] Province Population estimate (million) % of population % of nurses Number/ population Northern Cape 1.2 2.2 1.4 319 Mpumalanga 4.3 7.8 5.1 333 Gauteng 13.2 24.0 26.0 549 KwaZulu-Natal 10.9 19.9 24.6 629 * Registered, enrolled and auxiliary nurses.

Challenge 6: Remaining and deepening inequality and inequity in society, healthcare and hospitals Society: Gini coefficient widened – from 0.59 in 1993 to 0.63 in 2011.[45] Healthcare and hospital systems: Private health sector and private hospital industry have been consistently favoured and strengthened by successive government policies and big business interests. South Africa spends 41.8% of total health expenditure on private, voluntary health insurance, more than any OECD country.[46] Private hospital prices in South Africa are on par with prices in countries with much higher GDP levels including United Kingdom, Germany and France, yet South Africa is a developing country.

Conclusions Difference in performance between public and private healthcare and hospital sectors mirrors growing inequality evident in almost every aspect of life in South Africa. Healthcare and hospitals retained their notorious two-class character: A poorly resourced public sector often catering ‘second-class’ services to majority dependent on state, vs. a strong, well-resourced private sector providing ‘first-class’ services to wealthier and insured minority. NHI presented as panacea and is indeed a noble VISION of UHC. However, apart from resourcing NHI, unforeseen/unintended consequences may occur – here framed as questions: Will a huge and unmanageable NHI bureaucracy be created? How to cure poor hospital service delivery and quality of care at all levels? How to remedy poor maintenance of hospital infrastructure and facilities? Where will needed human resources and capacity to staff hospitals come from? Publically-funded healthcare and hospital systems will inevitably form basis for future reforms: From a management point of view, better collaboration between public and private healthcare sectors and hospitals and transfer of skills between the sectors is required.

References Hospital supply and management… South Africa
1. Van Rensburg HCJ South Africa’s health system and policies: evolution, structures, deformities, deficiencies. Department of Sociology, University of Antwerp, Antwerp, 17 October 2. DISA Segregation and integration at Groote Schuur Hospital Heunis JC & Janse van Rensburg AP Hospitals and hospital reform in South Africa. In Van Rensburg HCJ (Ed.) Health and health care in South Africa, 2nd ed. Pretoria: Van Schaik, Masland T Apartheid infects South African hospitals. Chicago Tribune 17 January. hippocratic-oath 5. HST Health indicators ANC 1994a. The Reconstruction and Development Programme – a Policy Framework. Johannesburg: Umanyano. 7. ANC 1994b. National Health Plan for South Africa. Johannesburg: ANC. 8. DoH White Paper for the Transformation of the Health System in South Africa (Government Gazette 17910). 9. DPSA White Paper on Transforming Public Service Delivery (Government Gazette 18340). 10. RSA National Health Act 61 of Pretoria: Government Printer. 11. Harrison D An overview of health and health care in South Africa : priorities, progress and prospects for new gains DoH A District Hospital Service Package for South Africa: a set of norms and standards. Pretoria: DoH. 13. DoH Provincial guidelines for the implementation of the three streams of PHC re-engineering. OF-PHC-4-Sept-2.pdf 14. DoH NHI Green Paper NPC National Development Plan 2030 – Our future make it work DoH 2015a. NHI White Paper. for-South-Africa-White-Paper.pdf 17. DoH Policy on the Management of Hospitals (Government Gazette 34522). 18. OHSC DoH. 2015b. Management and Governance of Public Sector Hospitals under the National Health Insurance Motsoaledi A Health Budget Vote Policy Speech presented at the National Assembly by Minister of Health. 31 May.

21. McIntyre D et al Health care financing and expenditure: post-1994 progress and remaining challenges. In Van Rensburg HCJ (Ed). Health and health care in South Africa, 2nd ed. Pretoria: Van Schaik: Gray A & Vawda Y Health policy and legislation. In Padarath A et al (Eds) SAHR Durban: HST: Van Zyl N et al Assessment of current health care referral systems in the RSA: a study of the current referral patterns, including the views and experiences of users and providers of health services. Bloemfontein: CHSR&D. 24. Theron N et al The World Bank 2016a. Health expenditure, public (% of GDP) The World Bank 2016b. Health expenditure, private (% of GDP) Child K NHI ‘simply unworkable’ Robertson LJ bca747079f/ pdf 29. Free Market Foundation and-intolerable-burden-on-sa 30. DoH The National Antenatal Sentinel HIV Prevalence Survey, South Africa, Pretoria: DoH. 31. Nannan N et al Under-5 mortality statistics in South Africa: shedding some light on the trend and causes Cape Town: SA MRC. 32. The World Bank 2016c. Maternal mortality ratio (modeled estimate, per 100,000 live births) The World Bank 2016d. Mortality rate, under-5 (per 1,000 live births) WHO Global tuberculosis report Geneva: WHO. 35. Day C & Gray A Health and related indicators. In Padarath A et al (Eds) SAHR Durban: HST: Schneider H & Barron P Achieving the Millennium Development Goals in South Africa through the revitalisation of primary health care and a strengthened district health system. (Position Paper). 37. Voss M & Duvenage R Operative surgery at the district hospital. S Afr Med J 101(8): Olukoga A Unit costs of inpatient days in district hospitals in South Africa. Singapore Med J 48(2): Von Holdt K & Murphy M Public hospitals in South Africa: stressed institutions, disempowered management. In Buhlungu S et al. (Eds) State of the Nation: South Africa Cape Town: HSRC Press: Fusheini A et al The social determinants of health and the role of the health care system: a case study of the significance of good governance in public hospitals in South Africa. Health 8: The World Bank 2016e. Hospital beds (per 1,000 people) Stats SA Mid-year population estimates

43. The World Bank 2016f. Physicians (per 1,000 people) SANC Provincial distribution of nursing manpower versus the population of the Republic of South Africa as at 31 December The World Bank 2016g. GINI index (World Bank estimate) BusinessTech

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