Private healthcare in South Africa has another problem: people are leaving the country

Private healthcare in South Africa is facing a near-term risk of a shrinking insured population and a slower than expected return of patients to hospitals despite high numbers of Covid-19 cases failing to materialise.

It also comes at a time when the government is pushing ahead with plans for a universal healthcare system – the National Health Insurance (NHI) – which will see both the public and private systems folded into a single entity.

The aim of the NHI, according to the government, is to ensure that all citizens are provided with essential healthcare, regardless of their employment status and ability to make a direct monetary contribution to the NHI Fund.

Jessica Spira, sector head for healthcare and hospitality at RMB, said: “In March this year, it was reasonable to assume that a global health pandemic would provide a meaningful tailwind for companies providing healthcare services.

“However, like many surprises in the Covid-19 pandemic, this was not the case for the hospital sector in South Africa. Hospitals had been working towards a model of a sustained high intensity of the crisis, but the country’s peak was shorter than expected. As a result, both private and public hospitals coped well in terms of capacity strain.”

She said that hospitals also treated fewer non-Covid-19 patients as many stayed away fearing infection. And the incidence of seasonal infectious diseases also dropped, stymied through social distancing and greater hygiene awareness.

Elective surgical procedures were deferred in anticipation of a deluge of Covid-19 cases, and hospital capacity was deliberately constrained by the need to separate hospitals into Covid and non-Covid wards.

But even as private hospitals slowly return to normal, they face headwinds as the full impact of the economic slump is yet to be felt.

“Currently private hospitals are running at about 60% occupancy but some of this represents a backlog of deferred procedures not carried out during the lockdown period,” Spira said. “But the insured population in South Africa is under pressure.”

Spira said that even before the pandemic, people were ‘buying down’ their healthcare plans and opting for cheaper and less comprehensive options – or dropping their healthcare altogether. Now with even greater economic uncertainty and high numbers of job losses, private healthcare affordability will be a challenge for consumers.

“We’ve also seen a steady trend in people emigrating and we expect this to tick up in the coming year,” she said.

Healthcare-workers waving goodbye

A report on the incoming National Health Insurance (NHI) and its impact on the healthcare industry, showed that healthcare workers are also leaving the country amid misgivings around the NHI.

The general feedback following questionnaires sent to healthcare practitioners in the private as well as the public sector across the country, showed that healthcare practitioners have concerns about the proposed healthcare system.

Only 15% of respondents believe that it would be possible to successfully implement the NHI, and 84.5% are of the view that the implementation of the NHI could destabilise the healthcare system in South Africa and could harm the high-quality service already being provided by the private sector.

One in five respondents indicated that they had already taken steps to emigrate, and a further 41% would consider emigrating when the NHI is implemented.

Drawing on experiences from around the world, there is general consensus that while second wave is highly probable, it’s unlikely to be as severe as the last. Hospital capacity, both in the public and private sector, should be able to deal with it successfully as in the first wave.

“We expect that as South Africans become more comfortable returning to hospitals, particularity for delayed elective procedures that cannot be put off any longer, the private healthcare sector should receive a boost over the coming months.

“But total recovery may take longer than expected in SA and may only return to pre-pandemic levels in 2022 or later,” said RMB’s Spira.

“And it is not certain what a full recovery will even look like. The Covid-19 pandemic put the spotlight on the healthcare sector and showed where inefficiencies exist – especially in the public sector.

“However, the private hospital sector is structurally sound for the long term, provided consumers continue to see medical insurance as a necessity.”

Read: South Africa faces massive healthcare worker shortage

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Private healthcare in South Africa has another problem: people are leaving the country