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How to harness the assets of private healthcare to respond to Covid-19 demands 

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Dr Brian Ruff is a Physician who has worked in the public sector and the NGO sector as a doctor; as a strategist in the Gauteng Health Department during the transition to democracy; he was then Head of Strategy and of Risk Intelligence at Discovery Health for many years, which he left 5 years ago, with funding from the FPD, to found the innovative healthcare management company PPO Serve.

Many private beds are occupied by patients whose ailments do not necessarily require admission. Or these ailments could be dealt with in a short hospital stay along with supported home recovery. This excessive use of hospital resources is wasteful.

The burden of illness from Covid-19 is predicted to peak in July or August 2020. It is now late May 2020. How best can the SA healthcare sector use all its resources and assets in the Covid-19 emergency? The challenge is that the system is already highly strained, with disconnected structures that offer uneven and fragmented care. This impacts severely on patient outcomes. We can and must address that central weakness now.

If the sector is to make a significant contribution, a creative and sustainable response lies in quickly establishing functional models and structures that efficiently utilise the current assets, that bridges the disconnect and is affordable for the country.

It requires two key team-based strategies, namely bridging the public-private gap, and vertically integrating the system.

The public and private systems operate vastly separately from each other. And vertically, the system of hospital care is both disconnected from and vastly different in quality to community “primary healthcare” (PHC) services.

But the burden of Covid-19 will require a pooling of all resources in a creative, productive way that bridges this vast divide. Covid-19 most severely impacts poor black people, as it does in other countries. This is especially true in a country with apartheid spatial geography and extreme living densities in townships and informal settlements. These factors are exacerbated by chronically poor nutrition that affects the health status of the poor, making them more vulnerable. These patients are not privately funded. Thus the healthcare load falls mostly on the public sector, straining that overburdened system to the brink.

Clearly, it is necessary to include the assets of the private sector in the response. It has roughly a third of all the hospital beds and nursing staff; half the doctors and over two thirds of the specialist clinicians practising in the country. Scheme members constitute just 15% of the SA population.

If organised properly, the capacity of the private system should serve over 20 million people, rather than the current 8.8 million.

But the private sector is currently poorly productive and expensive, making it prohibitive for the state to afford its services. The high cost and suboptimal utilisation of private sector resources stems from the current model in which clinicians are paid to work alone and where substantial earnings can derive from over servicing relatively few patients. The model is not geared towards efficiency.

“Hyper-specialisation” even impedes productivity in a system where highly qualified people are doing work that could readily be done by far less skilled team members and relieve the specialists to attend to the severe problems they are trained to address. The lack of leverage and the “diseconomies of scale” result in a low throughput, overly costly system.

The solution is a model that organises the clinical staff into multidisciplinary teams with specialist clinicians, doctors, nurses and allied professionals working together. This model applies throughout the system – it should be rolled out for Intensive and High Care Units; for medical, surgical and obstetric teams, and for community PHC services.

These are locally integrated teams, whose work is integrated with the local clinical community and hospital services, and with the local social care environment. The teams and the care delivered are run by accountable managers, who tailor services to specific diagnoses and patient circumstances, guided by performance and outcome data. This represents best practice of high functioning healthcare systems.

The burden on hospital beds must be relieved in order to efficiently tackle the anticipated patient load. A balance between community-based primary healthcare (PHC) systems and hospital beds is required. It’s tenfold more costly to do the same procedure in a hospital than in a clinic. And hospitals carry other risks, particularly in the time of a viral pandemic.

Taking the pulse of the private sector

The components of the private sector that are geared to sustain the current suboptimal system comprise private PHC practices, hospitals (and hospital beds) and medical scheme administrators. The system is funded through scheme contributions.

PHC: private practitioners in solo practices The health sector includes 8,000-9,000 general practitioners (GPs), typically working in small, with some larger “corporate”, practices. However, they are each paid as a lone clinician by “fee for service”, set at very low rates. There is very little teamwork. GPs are therefore incentivised to refer complex patients to a hospital specialist.

But communication systems are not designed for integration, and specialists may not send patients, or feedback, back to the GPs. In effect, the private sector funnels patients upwards to more costly services. As a result, the efforts of GPs are often marginalised. It can be a struggle to survive financially in this model. From a systems viewpoint, this model produces low productivity relative to the potential capacity of both GPs and specialists

Hospitals and hospital beds There are many hospital beds in South Africa – around 120,000 active overall, and many “mothballed” public sector beds. Private hospitals and beds have increased rapidly since 1994 from under 10,000 to nearly 40,000 today. But many private beds are occupied by patients whose ailments do not necessarily require admission. Or these ailments could be dealt with in a short hospital stay along with supported home recovery.

This excessive use of hospital resources is wasteful. It is a medical dilemma that the country can particularly not afford at the time of a pandemic. It is rooted in a system that is dependent on the “over-servicing” of low case mix patients who could be cared for more simply and at lower cost.

Medical Scheme Administrators As determined clearly by the Health Market Inquiry (HMI), the funders (medical schemes and their administrators) and their regulators, have failed to solve the productivity problem. There is an oversupply of hospital beds and specialists serving the 8.8 million scheme-funded patients, while GP services are marginalised.

Funding the private sector The mechanism to drive structural change lies in the funding tools. The public sector has a closed funding mechanism. But the private sector system is not contained by a budget envelope. Instead, it is driven by the costs of supplying the specialised hospital-based services. Few checks or balances curtail spending or delimit affordability in the system. Unmanaged costs are passed onto scheme beneficiaries through higher premiums and a growing portion of unpaid claims.

Despite widespread acknowledgement of the perversity of the “fee for service” remuneration system that pays clinicians to work alone, it remains the default. There is scant adoption of “value-based care” fees. Value-based care fees are risk adjusted global team fees with a portion linked to outcomes.

There is deep resistance to changing the status quo. Harnessing the power of the public and private sector to tackle the healthcare burden that this virus presents requires a broad political and civil commitment and lobbying to shift the system to a more efficient, affordable and integrated healthcare sector whose enormous capacity and strength can be marshalled quickly through teamwork and connectedness.

Establishing a rapid partnership response right now

Team model A team model that draws on the principles of efficiency and integration has been piloted. PPO Serve and the clinicians with whom we work have shown that, with a few tweaks and creative funding contracts, private sector providers can reorganise to make crucial improvements.

The model can be quickly adopted, and private clinicians and facilities can play a major role in taking a significant load off the public system. This requires organising doctors, nurses and allied workers in teams.  Importantly, the leveraged team model is designed to provide high volumes of good quality care at low prices. And so this can be delivered at rates the state can afford.

Relief and alternative services A reorganised private sector can relieve the state of those ordinary patients who are currently in the state hospital system and whose care cannot be delayed while it attends to Covid-19 cases. Team-based ICUs and High Cares that use “critical care” specialists as leaders of teams with other clinicians can manage far more patients than working as the sole doctor. Strong PHC teams with doctors and nurses, and allied health professionals working together can also provide an alternative to hospitalisation with strong community care and support. Clearly, the state needs to contract for these services using global fees, and these should be for teamwork rather than per individual.

PPO Serve has shown that this can be done. We are working in two healthcare areas where public service loads are clinically significant and very large, and where organised private clinicians can quickly make a difference. These are developed approaches and products that can be rolled out at short notice.

Leveraging general practitioners 

GPs are widely spread throughout the country. Rather than ignore them or confine their efforts to testing for Covid-19, they can – when organised and in partnerships – be joined to the country’s efforts. They can do much to strengthen the PHC system and take a huge load off state services.

PPO Serve has created a “Team” approach that builds on our experience with The GP Care Cell network (an HIV management programme undertaken with the Gauteng Health Department), and The Value Care Team (a multidisciplinary team that does population management, supported by a value-based care contract with GEMS – the Government Employee Medical Scheme).

A team of GPs supported by a hospital physician and working with nurses, allied healthcare professionals, pathology services and either a distribution agent or a community pharmacist, can provide monitoring and medicines for:

  • people living with HIV
  • chronic illnesses such as hypertension and diabetes
  • cancer follow-up and palliative care
  • Covid-19: They can also support and manage local people who are diagnosed with Covid-19 and who are in a position to self-isolate as an alternative to state isolation, lessen the need for hospital admissions and let people recovering after hospital go home sooner. This strategy will improve the triage system and save lives.

Leveraging obstetricians

A hospital-based team of organised obstetricians and midwives can take over the healthcare of significant numbers of pregnant women from provincial hospitals and clinics. Our product, “The Birthing Team” has a track record of almost three years and over 1,400 deliveries of this kind of teamwork, that has produced high quality, affordable care. A ramping up of this strategy will reduce the workload of public hospitals and also provide confinement in a safer environment than busy hospitals dealing with Covid-19 patients.

Mobilising private sector involvement in the national effort to cope with the growing increase in Covid-19 cases in the public sector would also highlight the possibility of future cooperation between the public and private sector in delivering better and more affordable healthcare to all South Africans. DM

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