A healthy charter

Claire Bisseker

The fact that the private sector spends as much providing healthcare for 20% of the population as the public sector does for the other 80% is an oft-quoted and illuminating statistic. But, until now, the private sector has generally seen this as government's problem.

The process of creating a health charter that covers both the private and public sectors has created an opportunity for the private sector to spell out its vision for the future and do so in a way that helps government meet its key objective - giving the masses better access to healthcare.

The importance of health minister Manto Tshabalala-Msimang's involvement cannot be overstated. She initiated the charter and has realised she needs to have a constructive relationship with the private sector. The process has huge potential, says a senior treasury official, but also carries huge risk. "Get it right, and the world becomes a better place get it wrong, and the parties will find themselves deeper enmeshed in conflict."

The proposed charter is unique among BEE charters in that it is a government- led initiative that will cover both the public and private sectors. Government also intends to include labour and community representatives in the process. Also, equity ownership is unlikely to be as important in this charter as issues such as improving the quality of care and access to it.

The process of forging a charter is barely out of the starting blocks. Two consultative meetings have been held at the behest of the health minister but task teams to deal with various aspects of the charter have yet to be established.

Mx Health's Quarterly Healthcare Review, now in its second year, hosted a public debate in Johannesburg last week to probe key constituents' views and suggestions on the proposed charter. Having been involved in the development of the financial sector charter, panellist Andile Sangqu, Kagiso Trust Investments group executive, questions how an industry where key players have taken the minister to court can expect to sit down and draft a charter together.

"In the financial sector charter process consensus crystallised," he says. "There was ownership of the process. There was no feeling that the charter was being imposed from above, but rather it was an evolution of thinking. That sense is lacking in the health sector."

He feels the sector has missed golden opportunities to find workable solutions with government and the charter process provides it with a chance to redeem itself, recapture lost ground and negotiate the future of the sector collectively with government.

What is not in doubt, he says, is that the private sector has to pitch in with something tangible because there is no chance of government backtracking on the need to increase black economic empowerment (BEE) in the sector and increasing access to care.

"There is still a lack of acceptance in the private sector of the need to transform," he says. "But what the industry needs to avoid is government imposing a charter on it from above." Sangqu emphasises the importance of first understanding the legacy of apartheid and how it has limited access to healthcare.

"One imperative in a developing nation is to ensure that most citizens have, at least, access to functional health facilities. The expectation is that government will spearhead the drive to achieve this."

"Though I don't believe this is government's responsibility alone, it is its responsibility to create a framework in which this can happen," he says. The other imperative is to make room for entrepreneurship in healthcare to flourish.

"It's a tricky balance and you may ask whether we are taking on too much by trying to achieve both at the same time. On the other hand, when would be a good time to do these things? How else will one bring about change if not through a process of altering the status quo?"

Sangqu believes a health charter should not be about BEE issues alone, but should look at legacy issues on a collective, consultative basis. "We should not tackle our challenges as government's problems, but rather as an indication that there is a crisis in the sector and that finding solutions is the responsibility of all parties," he says.

"Change can happen only when we accept that every party must make some trade-offs and that no-one can do it alone." Sangqu says remuneration and incentives for public healthcare professionals should be at the top of the agenda to improve the quality of care and reduce the loss of skills.

Another important element is the creation of private-public partnerships, particularly those that enable the private sector to improve the quality of public service delivery, but on a basis that is profitable. "We need to balance making a decent (but not obscene) profit with making the industry attractive to local and foreign investors and meeting our social needs," he says.

Private Healthcare Forum chairman Dr Fazel Randera sees the charter process as a great opportunity to define a role for the private healthcare system within government's ultimate vision of a national health system. "We have to shift" he says. "The healthcare services still fail our people. We are stepping on [people's] rights all the time."

Business Map Foundation's research director for BEE Colin Reddy says transformation in the healthcare sector has so far been mainly on the healthcare funding side. However, he stresses that there is more to empowerment than ownership.

There is employment equity that can be applied at all levels of the supply chain procurement, where discretionary budgets could be used to support black empowerment companies enterprise development, which involves companies putting finance behind emerging companies or entering joint ventures with them and skills development primarily for black employees.

In many charters there is also a residual component that makes room for sector- specific initiatives. In the case of banking, the residual component was given the greatest scorecard weighting - 43%, as opposed to 22% for direct empowerment, and 20% for human resources - to reflect the sector's desire to provide access to finance for a broad base of previously unbanked people.

Mx Health, the medical aid administrator and managed care company, has been calling for the creation of a charter for the past three years.

"We believe it is not just a nice-to-have but an imperative," says Mx Health non-executive chairperson Nana Magomola. She says it is important to remember that SA's healthcare system was inherited from the apartheid regime, which created large disparities in the provision of healthcare.

"We have a situation where poor areas, which are mainly still black, have poor facilities and traditionally white areas have state-of-the-art facilities, sometimes in excess," she says, contrasting a private hospital with 21st century equipment with Chris Hani Baragwanath Hospital "where patients don't always have blankets and the staff is underpaid, overworked and demotivated".

There are also huge disparities between urban and rural areas, she says. "Such disparities are simply not sustainable for a new democracy." Though the charter will not be legally binding, she believes that if all parties participate and buy into the process, it will begin to address inequality in the system.

"Ultimately, the charter needs to guide government and the private sector into developing a fruitful partnership," she says. "Government needs to create an enabling environment through [initiatives such as] training and a climate in which the private sector can do business. The private sector needs to find ways to make profits by providing quality, accessible healthcare, while assisting government in reaching its goals."

The first things she feels the charter needs to focus on are improving universal access to basic healthcare, improving the quality of care and making healthcare more affordable. It should also concentrate on improving employment equity, black ownership and procurement, and education and training.

It will also have to find a way of providing incentives for those institutions that comply with the provisions of the charter, and disincentives for those that don't.

She feels there should be a strong focus on expanding private-public partnerships that create benefits for both sides. In addition, the charter must emphasise how communities can participate in healthcare provision and what direct benefits it can bring to them. For instance, if a hospital is being built in Bronkhorstspruit, there should be a policy of local procurement.

"We also need to look at how we can improve public sector hospital infrastructure and support, and what incentives we can provide to the staff who work there to stem their exodus to the private sector and overseas," she says.

Board of Healthcare Funders CEO Penny Thlabi says the health charter is long overdue and the process of drafting it will promote greater co-operation between the private and public sectors. But no-one should pretend this will be easy, she says. "It will be much more complex than the financial sector charter because healthcare is an emotive issue."

She says the task teams (once they are appointed) cannot begin by setting BEE targets. "If we start with targets, we will fail because we don't even know where we are," she says.

She says setting targets for improved healthcare outcomes would be a good starting point. It is therefore critical that SA benchmarks itself by establishing a baseline health outcomes survey.

Also needed at the outset is a common vision with clearly defined roles and responsibilities for the private and public sectors. The private sector, she says, is a national asset that is underutilised but could be used to relieve the burden on the state. This would, however, require the development of new business models.

"It is clear from the success of the mining and financial sector charters that consultation and the involvement of all stakeholders is key," she says. "Realistic time frames for transformation are also imperative to ensure the success of any charter."

Thlabi says the goals of equity, access and cost-effectiveness are of critical importance in healthcare transformation and the charter must be founded on these imperatives. But improving access is one issue. The real question, she says, is who will pay?

"Even if the private sector takes a cut in margins (and it is willing to do so), someone has to pay. Has anyone tested the willingness of labour unions to have their members take home less pay and what about employers, we're struggling to create jobs as it is."

A typical charter looks at employment equity in decision-making and management structures. Thlabi says clear targets need to be set and achieved as part of a broader transformation agenda. Of equal importance is the fact that healthcare delivery is still a labour - intensive task, so the charter needs to look aggressively at the needs of the unified health sector, address issues of internal and external migration and conditions of employment.

The charter also needs to consider issues around the sustainability of the healthcare system, transparency in business practices and the pricing of services.

"The private sector needs to be self-sufficient and vibrant and meet the objectives of the healthcare system. However, to do so, it must function within a for-profit environment. The present failings and mistrust do not stem from the fact that certain elements make profits, but because they make super profits. It is important to acknowledge the role of profit making, but within a transparent pricing and business model."

Thlabi also suggests that the feasibility of demutualising medical schemes be considered to improve their capitalisation and efficiency and make them attractive to investors.

Mx Health non-executive chairman Neels Barendrecht is also concerned about how BEE deals in the health sector will be financed when the sector cannot even attract capital to finance normal merger and acquisition activity and new business ventures.

"My concern is that no fresh capital is coming into this industry, so we are all fighting over the same bag of gold, he says. How will you get any financier to put money into healthcare when the size of the cake [in terms of medical aid membership] is shrinking not growing?"

Mx Health medical director Dr Mark Ferreira highlights the difference between the private healthcare industry and the financial services and mining sectors for which charters have already been drawn up. "Health brings a social imperative with it," he says. "Banking the unbanked has a social value, of course, but is not nearly as important as providing healthcare for the poor. Sharing the wealth is only a fraction of what's needed in the health charter. We need to increase access, not dividends."

Because of this, the health charter has to be about much more than equity ownership. Transformation needs to start at the most basic level, he argues, by providing the kind of support that our future professionals need, from their school days, to facilitate transformation at all levels.

"Giving access to more people means more than just building clinics or forcing newly qualified doctors to do one year of community service," he says. "We need to consider carefully how we select, support and train our medical students in all healthcare professions, and how we facilitate the process of them working in underserved areas."

Other charters are preoccupied with setting black ownership targets and transforming the face of management. Though this is as important in healthcare, the debate suggests that healthcare has other imperatives that will make the creation of a charter more complicated. Not least is the urgent need to extend quality healthcare to those who cannot pay for it, to uplift the standard of care in rural areas and to address the brain drain. All of this must be achieved while maintaining a healthy and profitable industry that is attractive to local and foreign investment.

Though the charter will not be legally binding, the process of drafting it could be as important to transformation as the document itself. Consensus will have to be reached among the participants. If so, mutual understanding and respect among stakeholders will be improved. If not, they will have missed a once-in-a-lifetime opportunity to rewrite the future of healthcare in SA. (Source: The Financial Mail, 10 September 2004)