Chapter 17: The Role of Hospitals
White Paper for the Transformation of the Health System in South Africa

1. Background and Introduction

The public hospital system is central to the successful implementation of the primary health care approach. Problems of inequity, inefficiency and poor quality services would have to be addressed to bring the public hospital system in line with the transformation process currently taking place in the national health system.

Further, for the effective implementation of the PHC approach, a large proportion of existing allocations to the hospital sector will have to be rechannelled to primary health care facilities. This can only happen if hospitals make substantial savings, by improving their efficiency.

2. Guiding principles

• The redefinition of the role of hospitals to bring it in line with the primary health care approach;
• The development of plans to rationalise hospital services;
• The decentralisation of hospital management structures to promote efficiency and cost-effectiveness;
• The establishment of hospital boards to increase accountability to communities;
• The introduction of a user fee system;
• The implementation of policy and regulations pertaining to private hospitals, thereby ensuring increased contribution to the National Health System;
• Hospitals providing unique or highly specialised services will be treated as national resources.

3. Implementation strategies

3.1. The role of hospitals will be redefined to be in line with the PHC approach

The White Paper identifies several factors that have contributed to ineffective hospital services. The structure and functioning of referral systems, inaccessibility because of geographic distances or lack of finances for hospital fees are but some of the problems that central hospitals have experienced. These problems, however, have resulted in the under-development of PHC services and district and regional hospitals. Strategies to address these problems include:

• Clear definition of the roles of the various hospitals in the referral chain and clear differentiation between the primary, secondary and tertiary levels of care ;
• Establishment of appropriate referral mechanisms to facilitate interaction between community, clinic and hospital-based care;
• Development of appropriate clinical referral guidelines to improve the equity, efficiency and quality of care;
• Reorientation of existing hospital-based staff towards the PHC approach.

3.2. Rationalisation of hospital services, facilities, staffing and capital investment

Realistic strategies must be developed to reallocate financial, human and physical resources from urban to rural centres and from expensive to more cost-effective levels of care. There are also differences, within and between hospitals, in the workloads of personnel. This needs to be addressed by the rationalisation and redistribution of staff. Costs of teaching hospitals need to be rationalised to encourage greater utilisation at lower level facilities for teaching and training purposes. Implementation strategies include:

• the upgrading or replacement of existing facilities in line with the National Health Facilities Audit;
• development of a comprehensive capital investment plan at the provincial level;
• formulation of guidelines for certain procedures and the licencing of facilities;
• formulation of national affordability guidelines for the staffing of all types of hospitals;
• development of national policy on the location, size and financing of specialised health facilities;
• strengthening of specialised provincial hospitals to make them more accessible to clients. The quality and efficiency of community level health facilities will also be improved;
• development of the concept of Academic Health Centres to ensure greater availability of academic staff at other levels, and to increase involvement of academics in teaching and research throughout regions;
• identification of areas of under- and over-provision, and inefficiency in referral patterns;
• development of comprehensive guidelines for the rationalisation of hospital services.

3.3. Introduction of decentralised hospital management to promote efficiency and cost-effectiveness

Most public hospitals are severely under managed: managers have limited responsibility, authority or skills and management structures and systems are inappropriate and ineffective. To reduce spending, whilst retaining the quality and accessibility of hospital care, hospital management structures will have to be strengthened. Strategies to address these issues include:

• Decentralisation of hospital management

Hospital managers will have greater decision-making powers, especially in relation to longer-term strategic issues, and the provision of cost-effective services. They will also have greater control over daily operations, including decisions relating to personnel, procurement and financial management.

• Management Structures, Systems and Capacity

Within a given hospital, management will be further decentralised. Each management structure will have a single focus and significant authority with regard to their budgets, staff and other resources. To create a higher awareness of health users’ needs, there will be continuous staff reorientation programmes with greater emphasis on the delivery of quality services.

• Staffing and Personnel

Hospital managers will be responsible for personnel management functions such as appointments, performance appraisals and grievance and disciplinary procedures. Within national guidelines, they will also determine salary grading and performance- related bonuses.

• Procurement, public works and transport

Hospital managers and hospital tender committees will be authorised to buy goods as needed.

• Progressive phasing in of decentralised management

Decentralisation will be phased in progressively in a process tailored to address the specific conditions of each province and hospital.

 

3.4. Establishment of hospital boards to increase accountability to communities

To make hospital boards more representative of the communities they serve, it will be important that they engage more actively with local management structures. To achieve this, hospital boards will be established as statutory bodies, with advisory, representative and oversight functions. They must also ensure that hospital management meets its obligations in terms of its ‘performance agreement’ with the province and that the needs and views of the community are responded to appropriately.

3.5. Introduction of a user fee system to improve services and generate income

To bring about greater equity and improve the collection of fees, the following changes are envisaged:

• the introduction of a bypass fee payable by patients not referred by a PHC clinic;
• different levels of payment at district, regional and central hospitals to encourage the appropriate use of facilities;
• changes to income categories to ensure access for those who cannot pay;
• simple fee schedules and adjustments reflecting underlying costs and inflation.

Additional changes will include improved use of information, appropriate staff training, and efforts to attract paying patients to public hospitals.

3.6. Implementation of policy and regulations to encourage cost containment in the private sector

Various policies and regulations will be introduced to encourage closer collaboration with the private hospital sector. These include:

• the development and implementation of a national set of criteria and requirements for the granting of new private hospital licences and extensions to current ones;
• revision of the legal definition of private hospital facilities to eliminate current loopholes;
• strengthening of capacity to ensure full compliance with laws and regulations governing private health facilities;
• investigation and discussion of mechanisms for collaboration between the public and private sectors in the use of public hospital facilities, as part of a process to develop creative solutions which will benefit both sectors.

3.7. Hospitals providing unique or highly specialised services to be seen as national resources

Facilities offering unique, specialised services will be treated a national resources. Implementation strategies include:

• the redefinition of unique and highly specialised services;
• the formulation of clear guidelines for admission to these facilities to ensure non-discriminatory access according to need;
• the development of guidelines for the opening up or licencing of similar facilities on the basis of a clearly defined need, and within the context of available resources; and
• the development and implementation of a new policy on solid organ transplantation.

4. Some Issues raised

• The transformation process outlined in this chapter affect many different stakeholders. What is the envisaged consultation/negotiation process? How will communities be able to feed in their views or values?

• What are the budgetary implications of the decentralisation process outlined? Perhaps the assumption that decentralised management will lead to greater cost-effectiveness, and that more resources will be available for PHC services, needs to be backed up by economic data.

• How will hospital boards be made to be representative of communities, and responsive to their needs? How will these boards be elected? Will communities have direct representation on these boards?

For more information, please contact Bea Abrahams by telephone at 021 - 6964954, by fax at 021 - 6969308, or by e-mail at philaw@wn.apc.org . The PHILA programme is supported by a grant from the Henry J. Kaiser Family Foundation.

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