Private hospital group complains about R16k government rate for Covid patients

11 June 2020 - 08:23 By ANDISIWE MAKINANA
The R16,000 critical care daily rate proposed by the government to care for critical Covid-19 patients does not cover costs, says a private hospital group.
The R16,000 critical care daily rate proposed by the government to care for critical Covid-19 patients does not cover costs, says a private hospital group.
Image: Phasut Waraphisit via 123RF

At least one private hospital group has expressed concern over the sustainability of its business if the R16,000 critical care daily rate proposed by the government to care for critical Covid-19 patients is applied over an extended period.

The Life HealthCare group told parliament on Wednesday that the R16,156 per bed for state patients to be treated at private hospitals when there was no space at government hospitals was below the cost-to-recovery rate and was not sustainable.

Addressing MPs' questions during a joint meeting of the National Assembly and National Council of Provinces' health oversight committees, the group's Matthew Prior said the figure was a blended rate across ICU and high care and was a daily rate.

“It includes VAT, it includes the nurse, the bed and all the stock that is used.”

He said they had shared some data with the department of health around the utilisation of stock and this was a pure cost to Life HealthCare, and the company did not make any margin on the utilisation of stock in its hospitals.

“We remain concerned that this is not really on a cost-to-recovery basis, it's below that and we would face sustainability challenges for our organisation should this rate persist for any extended period of time,” he said.

Prior said once you take the VAT off and pay it to the National Treasury, then deduct the stock that's used on the patients in ICU and high care, the rate is “significantly below” their cost to recovery level.

He tried to explain to MPs that health care was an incredibly complicated undertaking and suggested that they look up the company's financial statements and profitable levels.

If it was going to be on a cost-to-recovery basis, even at that level it would not be sustainable. The pricing we would suggest would be higher than the existing pricing that has been put on the table.”

Nonetheless, Prior said they had agreed to participate at those pricing levels “in the interest of meeting the challenges of the country highlighted”.

The next step of the process is to establish a service level agreement and a memorandum of understanding. He said they were in the advanced stages of establishing that in two provinces, which will be used as the basis of the engagement with the balance of the provinces.

Life HealthCare group told parliament that it has treated 301 Covid-19 patients, 63 of whom had died in the Eastern Cape, 16 in the Western Cape, 10 in Gauteng and four in KwaZulu-Natal.

The parliamentary committees heard that 313 of the group's staff had tested positive for Covid-19, 192 of them in the Eastern Cape. Two of those staff members had died, both from the Eastern Cape. The group has 16,376 employees in SA, it said.

Western Cape head of health Keith Cloete was the first to break the news last week that the rate that was agreed to for ICU high care was R16,000.

Netcare's Richard Friedland confirmed this to MPs saying they had successfully reached contractual agreements with the Western Cape in terms of the service level agreement and with the minister of health in terms of a national tariff.

“Our objective was to do this at a cost-to-recovery basis and that is the basis on which we will be contracting with the department in fighting this pandemic hand-in-hand,” said Friedland.


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