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The state of the government’s bill for medical claims is a cause for concern, particularly because it has grown significantly over the years, to the point where some provincial health departments could not keep up. That is, healthcare facilities entrusted with the lives of South Africans every day are paying more towards medical claims than they are towards the service delivery needs of their constituents.
A provincial hospital in the North West province is again in the news for its controversial handling of a delicate medical matter. The Mahikeng Provincial Hospital is investigating the conduct of officials in its maternity ward after photographs of a number of newborns placed in cardboard boxes instead of the conventional cribs and incubators found their way onto social media.
The public outrage that followed was channelled at officials and oversight authorities alike, leading to health MEC Madoda Sambatha urgently arranging to supply cribs and incubators to the hospital. Fortunately, none of the infants affected died, nor were any of them reported to be in any immediate medical risk because of being placed in unhygienic conditions, but the incident is a stark reminder of how quickly and easily things can go wrong in the healthcare field.
Over the years, in the larger and busier Baragwanath Hospital in Soweto, the circumstances have not been any better. The hospital was recently reported to have seen over 900 infant deaths over a period of three years between 2020 and 2022. They all occurred under what is classified as “avoidable incidents”, probably meaning that the hospital could have a better job of caring for the babies.
Health money used to defend legal claims
In practical terms, this situation of increasing medical claims against the health system indicates an interminable cycle of health departments having to defend themselves against claims for which they have not budgeted, and in the process sacrificing the budgets intended for desperately need service delivery.
President Cyril Ramaphosa’s advisor on social policy, Dr Olive Sishana, recently declared that while provinces faced a major challenge in relation to medico-legal claims – in other words, medical negligence and malpractice claims – the national government would be cautious in dealing with the crisis. It would not bail out any provincial health departments facing mountains of medical claims from the public, in instances where these were not being managed down, she added.
The Free State provincial health department was singled out as the only one actively using government’s case management system designed to help government defend itself against claims. The others are lagging behind on this front, and potentially facing claims that run well into the hundreds of millions per province.
The situation is laid bare in the Auditor-General’s (AG) 2021/22 audit report for national and provincial departments, in which the dire state of escalating claims that threaten the availability of service delivery budgets is noted. The most common type of claim is medico-legal claims against provincial health departments, for which departments do not normally budget, said AG Tsakani Maluleke. For those departments that do budget for claims, there isn’t always enough to cover them.
Of the situation in the Limpopo health department, Maluleke said: “The provincial health department, which is one of the key service delivery departments, faces medical negligence and malpractice claims amounting to R14.29-billion. If these claims translate into actual liabilities, funds earmarked for strategic and service delivery objectives will need to be used to settle them.
“The premier must enforce the implementation of robust strategies to generate revenue and curb expenditure to prevent much-needed resources from being wasted and to ensure their efficient use. This will place the province in a better position to achieve its service delivery objectives and have a positive impact on the lived realities of the province’s people.”
Service delivery compromised
The situation in Mpumalanga is not that much better, as its own claims bill came up to R10.2-billion in the same period. The AG makes a positive observation of the way in which the Western Cape health department managed its claims, carefully assessing the merits of each with the help of a dedicated team. For this, the department showed a significantly lower claims bill compared to other provinces, which amounted to a total of R426-million for the period.
Maluleke also laments in her report, the way in which claims are managed by provincial health departments. “The measures implemented by departments to manage and defend medico-legal claims are also flawed. As a result, all successful claims will be paid from funds earmarked for service delivery, further eroding departments’ ability to be financially sustainable and to deliver on their service delivery commitments.”
For Gauteng, she notes, legal claims continue to pose a risk to the health department’s financial sustainability, with increasing contingent liabilities arising from medical negligence and malpractice claims. “Due to poor management of medical records, the department is often unable to defend itself in cases, which leads to cases being settled and unbudgeted expenditure being incurred.”
Hospitals not supported in delivering adequate services
In 2021-22, the estimated settlement value of claims against [health] departments totalled R153.64- billion. This amount represents claims that have not yet been settled (by court order or mutually between the parties). In accordance with the Modified Cash Standard, departments report an estimated value of the claim based on the most likely outcome of the process. As in the previous year, the provincial health departments accounted for the largest portion of this amount (67%).”
To further put matters into perspective, the country’s nine provincial health departments will have to share 82% of the R60-billion announced in early May by Health Minister Joe Phaahla in his budget vote. As things stand, the minister raised the concern that his sector is underfunded by around R11-billion, and has to be careful about how it spends the funds that it does get from the national budget.
For Mahikeng Hospital, and many like it around the country that face the daily challenge of inferior or no proper infrastructure to meet the medical needs of communities, the glaring, disproportionate obligations of the provincial health departments towards their service delivery goals and the ballooning legal woes is far from being conquered.
