Public hospitals only: government’s plan to cut costs for medical legal claims
South Africa’s health department wants public hospitals to provide future medical care for those who make legal medical claims against the state in a bid to offset the overwhelming costs involved.
The South African healthcare sector is grappling with “an explosion of litigation” in medical claims, amounting to over R100 billion, mirroring trends that hollowed out the Road Accident Fund (RAF).
This was outlined by Health Minister Aaron Motsoeledi in his presentation to the joint Portfolio Committee on Health, as well as the Standing Committees on Appropriations and Public Accounts on 11 September 2024.
Some proposals to combat this touted during the presentation include:
- Ensuring public hospitals provide future medical care for claims to reduce costs,
- Promoting mediation by adopting a compensation system to minimise court battles, and
- Bringing on board those with forensic investigation, data analysis and capturing skills to monitor medico-legal claims.
Broadly, medico-legal claims are litigation against healthcare providers that usually stems from:
- Adverse events;
- Negligence;
- Medical malpractice;
- Unethical behaviour of health professionals.
Motsoaledi explained that all of these may happen in any healthcare setting anywhere in the world.
“However, in the case of healthcare in South Africa, an explosion of litigation just appeared on the scene around 2015,” with litigation directed at healthcare institutions as well as medical practitioners in both the public and private practice.
The Health Minister pointed out that this explosion coincided with the RAF strengthening its systems, which had been severely weakened by numerous ‘suspicious, exorbitant’ claims, diminishing its ability to pay out claimants.
It was revealed that more than R100 billion in medico-legal claims had been made against provincial health departments over the past several years, with more than R33.13 billion in claims under investigation.
“The situation in the sector is concerning as significant increases in medico-legal claims is putting the health sector under immense pressure,” said the office of the Auditor General in a presentation to the Appropriations Committee on 11 September.
“The financial strain resulted in increased accruals and late payments of suppliers,” and in the 2022/23 year, R18.613 billion in unpaid invoices had to be covered, diverting funds from current service delivery, added the Auditor General.
The office said that borrowing from future allocations forces management to prioritise and suspend services, disadvantaging citizens.
Delayed payments also incur interest, impacting budgets and healthcare delivery.
Public hospitals only
Motsoeledi noted that ‘future medical care’ accounts for 80% of most claims—but the costs are calculated based on “exorbitant” private hospital charges.
He said that despite large lump-sum payments for private care, many patients continue to use public hospitals.
Going forward, the minister said that it would be far more cost-effective for public hospitals to provide the care for these claims, potentially reducing claims by up to 80%.
The DoH listed in Government Gazette 42687 (5 September 2019) public health facilities designated to provide future medical care for cerebral palsy, including acute, rehabilitation, and palliative care.
Another route would be to resolve claims through mediation, rather than litigation.
In his presentation, Motsoaledi referred to “countries like China, despite their huge populations, have fewer cases heard in court because most of their litigation cases are mediated upon.”
South Africa is looking to take a page out of this book, and thus far, 18 officials, both legal and medical, have been trained in mediation.
The Health Minister also proposed designing a “fairer compensation mechanism” for those needing it, drawing on successful models from Scandinavian countries.
This approach involves panels of retired judges, senior medical and nursing staff, solicitors, and social workers to determine fair compensation for medical injuries, rather than relying on lengthy court battles.
He said that this method is believed to ensure more deserving individuals receive compensation and aims to avoid the uncertainty of prolonged legal cases, and the department will pursue this approach.
Dodgy claims
Back in 2015, when the rising trend in medico-legal claims was observed, the Department of Health held a summit proposing solutions in three areas:
- Medical: Ensuring and maintaining patient safety standards.
- Administrative: Improving record-keeping, securing patient records, and enhancing communication.
- Legal: Implementing mediation, revising contingency payments, and considering periodic or staggered payments.
The Special Investigating Unit (SIU) was then called in to look into these suspicious claims.
In 2017, the SIU started their work by targeting provinces with the highest share of claims (Gauteng and the Eastern Cape).
By that time, the Eastern Cape contingent liability in respect of medico-legal claims amounted to R15.9 billion while in Gauteng the figure was R21.2 billion, meaning that should all the cases be won in court by the litigants, then the DoH would have had to pay out over R37 billion in the two provinces,
The SIU initially found that many claims, primarily for cerebral palsy—a condition caused by birth-related oxygen deprivation—were being exploited by legal practitioners.
Additionally, many claims were filed without patients’ knowledge, and elderly caregivers were misled into signing legal documents under the pretense of SASSA child support forms.
The ongoing probe into fraudulent claims reportedly saving the state more than R3.1 billion so far.
Back in 2019, the DoH issued a multi-million rand transversal tender to have a company with legal,
forensic investigation, data analysis and data capturing skills “to have a better handle on medico-legal claims.”
The contracts were for three years and expired in December 2022. The Department believed it could develop internal capacity, but the minister said that this approach seems unfeasible.
Consequently he gave instructions to the Department to urgently re-advertise the tender to find these skills as these companies are seen as better equipped to identify invalid or fraudulent claims than the Department’s officials.
Read: Goodbye to stepping foot in Home Affairs in South Africa
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