The cost of private care has risen by more than 5% above inflation over the past couple of years, according to Discovery Health Adiministrators CEO Jonathan Broomberg.

He spoke at the annual Hospital Association of South Africa conference last week.

Nigel Edwards, KPMG's director of global health reform, said a change was needed in the way healthcare was provided .

Edwards said hospitals in the 1920s - with rows of waiting outpatients - looked similar to the many hospitals of today.

"New business models to reduce costs are needed," he said.

Broomberg said that, from 2008 to last year, the cost of private healthcare had increased annually by 10.9% - well over the average consumer price index of 5.5%.

He said the increasing admission rates and use of new technologies were adding to the problem. This, he said, had led to Discovery investigating ways to reduce treatment costs.

Broomberg proposed the establishment of high-volume surgery centres for specific procedures.

He said a pilot project by Discovery showed that when hip-replacement surgery was done at a centre developed only for that procedure, costs were reduced by R30000.

Hospitalisation periods nearly halved when this approach was used, Broomberg said.

"We can change the delivery model of healthcare from the sole use of general hospitals to include high-volume surgery centres."

Medi-Clinic's funder relations head, Roly Buys, said the strict regulations governing the private hospital industry prevented this kind of innovation.

He said South Africa did not have the number of doctors and nurses needed to run high-volume surgery centres.