The management of diabetes at primary level in South Africa: the results of a facility-based assessment.

Diabetes is a widespread condition in South Africa and is often managed at primary level health facilities. This study aimed to assess the quality of diabetes management using a rapid assessment approach, focusing on three indicators as proxy measurements of quality: the regularity of blood glucose level (BGL) measurement; the percentage of patients whose BGLs were within 'acceptable' limits (under 10.0 mmol/l) on at least 75% of visits; the rate at which action was taken in response to high BGLs. Five sites were included in the study, including public and private, doctor- and nurse-based facilities. A total of 128 records were examined. Only 33% of all records were found to be well-managed according to the study criteria. None of the individual facilities were found to have more than 40% of patients achieving BGLs within the study limits. Some obstacles to good glycaemic control were costs to patients, transport problems, a lack of health education and shortcomings in clinical expertise. Policy implications and recommendations are suggested.

Improving the efficiency of district hospitals: is contracting an option?

A world-wide revolution in thinking about public sector management has occurred in recent years, termed the 'new public management'. It aims to improve the efficiency of service provision primarily through the introduction of market mechanisms into the public sector. The earliest form of marketization in developed countries has tended to be the introduction of competitive tendering and contracts for the provision of public services. In less wealthy countries, the language of contracting is heard with increasing frequency in discussions of health sector reform despite the lack of evidence of the virtues (or vices) of contracting in specific country settings. This paper examines the economic arguments for contracting district hospital care in two rather different settings in Southern Africa: in South Africa using private-for-profit providers, and in Zimbabwe using NGO (mission) providers. The South African study compared the performance of three 'contractor' hospitals with three government-run hospitals, analysing data on costs and quality. There were no significant differences in quality between the two sets of hospitals, but contractor hospitals provided care at significantly lower unit costs. However, the cost to the government of contracting was close to that of direct provision, indicating that the efficiency gains were captured almost entirely by the contractor. A crucial lesson from the study is the importance of developing government capacity to design and negotiate contracts that ensure the government is able to derive significant efficiency gains from contractual arrangements. In other parts of Africa, contracts for hospital care are more likely to be agreed with not-for-profit providers. The Zimbabwean study compared the performance of two government district hospitals with two district 'designated' mission hospitals. It found that the two mission hospitals delivered similar services to those of the two government hospitals but at substantially lower unit cost. The nature of the contract between government and missions was implicit rather than explicit and of long standing. On the whole the mission organizations felt the informal nature of the agreement was advantageous, though the government plans to introduce service contracts at district level with all hospitals, both government and mission. The paper concludes by identifying concerns raised by the case-studies that are of relevance to other countries considering the introduction of explicit contractual arrangements for district hospital provision.

Economic analysis at the global level: a resource requirement model for HIV prevention in developing countries.

Agencies operating at the international level have a need for economic analysis to help develop global health policies and determine resource requirements to support their advocacy efforts. This paper presents work commissioned by the Global Programme on AIDS to estimate the total resource requirements of implementing a package of HIV prevention strategies in developing countries. The modelling approach identified a hypothetical package which should be implemented and developed a set of assumptions relating the size, number and coverage of programmes required for each strategy to a set of demographic and other characteristics of individual countries. Costs were attached to estimate the total costs of the package for individual countries, regions and the developing world. Results are presented for regions and their implications discussed. Conclusions are drawn on the value of this type of modelling approach to estimating resource requirements.

Managing the health care market in developing countries: prospects and problems.

There is increasing interest in the prospects for managed market reforms in developing countries, stimulated by current reforms and policy debates in developed countries, and by perceptions of widespread public sector inefficiency in many countries. This review examines the prospects for such reforms in a developing country context, primarily by drawing on the arguments and evidence emerging from developed countries, with a specific focus on the provision of hospital services. The paper begins with a discussion of the current policy context of these reforms, and their main features. It argues that while current and proposed reforms vary in detail, most have in common the introduction of competition in the provision of health care, with the retention of a public monopoly of financing, and that this structure emerges from the dual goals of addressing current public sector inefficiencies while retaining the known equity and efficiency advantages of public health systems. The paper then explores the theoretical arguments and empirical evidence for and against these reforms, and examines their relevance for developing countries. Managed markets are argued to enhance both efficiency and equity. These arguments are analysed in terms of three distinct claims made by their proponents: that managed markets will promote increased provider competition, and hence, provider efficiency; that contractual relationships are more efficient than direct management; and that the benefits of managed markets will outweigh their costs. The analysis suggests that on all three issues, the theoretical arguments and empirical evidence remain ambiguous, and that this ambiguity is attributable in part to poor understanding of the behaviour of health sector agents within the market, and to the limited experience with these reforms. In the context of developing countries, the paper argues that most of the conditions required for successful implementation of these reforms are absent in all but a few, richer developing countries, and that the costs of these reforms, particularly in equity terms, are likely to pose substantial problems. Extensive managed market reforms are therefore unlikely to succeed, although limited introduction of particular elements of these reforms may be more successful. Developed country experience is useful in defining the conditions under which such limited reforms may succeed. There is an urgent need to evaluate the existing experience of different forms of contracting in developing countries, as well as to interpret emerging evidence from developed country reforms in the light of conditions in developing countries.

PIP: Recent implementation of managed market reforms in some developed countries, the policy debate on these reforms, and perceptions of extensive public sector inefficiency are raising interest in the likelihood for managed market reforms in developing countries. Most current and proposed market reforms for hospital services differ, yet they all introduce competition while retaining public financing. The two goals of addressing current public sector inefficiencies while preserving the equity and efficiency advantages of public health systems gave birth to this structure. Based on developed countries' experience, a health policy specialist compares arguments and evidence for and against these reforms to reflect on the prospects for such reforms in a developing country framework by focusing on the provision of hospital services. The arguments are that managed markets improve both efficiency and equity. The specialist analyzes the arguments based on 3 different claims made by proponents of managed markets: managed markets encourage increased provider competition and thus provider efficiency, contractual relationships are more efficient than direct management, and the advantages of managed markets outweigh their costs. The analysis shows that the arguments and evidence are vague on all 3 claims. Inadequate understanding of the behavior of health sector agents within the market and the limited experience with these reforms contribute to this vagueness. Just a few, richer developing countries have the necessary conditions for successful implementation of these reforms. The costs of the managed market reforms will probably pose considerable problems, likely leading to failure of these reforms in developing countries. Limited introduction of some elements of these reforms could be successful, however. One must evaluate the present experience of various contracting methods in developing countries and interpret emerging evidence from reforms in developed countries while considering conditions in developing countries.

The role of private hospitals in South Africa. Part II. Towards a national policy on private hospitals.

This paper reviews some aspects of present state policy on private hospitals and sets out broad policy guidelines, as well as specific policy options, for the future role of private hospitals in South Africa. Current state policy is reviewed via an examination of the findings and recommendations of the two major Commissions of Inquiry into the role of private hospitals over the last 2 decades, and comparison of these with the present situation. The analysis confirms that existing state policy on private hospitals is inadequate, and suggests some explanations for this. Policy options analysed include the elimination of the private hospital sector through nationalization; partial integration of private hospitals into a centrally financed health care system (such as a national health insurance system); and the retention of separate, privately owned hospitals that will remain privately financed and outside the system of national health care provision. These options are explained and their merits and the associated problems debated. While it is recognised that, in the long term, public ownership of hospitals may be an effective way of attaining equity and efficiency in hospital services, the paper argues that elimination of private hospitals is not a realistic policy option for the foreseeable future. In this scenario, partial integration of private hospitals under a centrally financed system is argued to be the most effective way of improving the efficiency of the private hospital sector, and of maximising its contribution to national health care resources.

Delivering at the right price--the costs of primary maternity care at the Diepkloof Community Health Centre, Soweto.

This paper reports on a study of the costs of primary maternity care services at the Diepkloof Community Health Centre (DK) in Soweto. DK, the Soweto community health centre system as a whole and numerous other non-hospital settings provide a wide range of maternal health services to substantial numbers of women, and relieve hospitals of a major potential clinical burden. However, no research has been done in South Africa on the relative costs of the provision of these services in different settings and by different types of health worker. The cost structure of these services at DK is presented and the costs of antenatal care, deliveries in midwife-run labour wards, postnatal care (at the health centre and at home) and family planning services detailed. Some comparisons are made with existing data for another community health centre and with Baragwanath Hospital. These results are relevant to policy and planning of maternal health services. They are also shown to be of relevance to management and several areas of potential improvement of these services are noted.

What does primary health care cost and can we afford to find out? Rationale and methodology for a cost analysis of the Diepkloof Community Health Centre, Soweto.

Accurate information on the costs of providing primary health care (PHC) services is now an urgent priority for health policy makers and planners, if the Government's stated commitment to an adequate PHC system is to be realised. Cost information is also a critical management tool for both public and private sector providers. In this context, the inability of public sector PHC providers to generate accurate cost accounting information is a serious shortcoming. In an attempt to address this lack of local PHC cost data, a detailed analysis of the costs of PHC services was undertaken at the Diepkloof Community Health Centre (DK) in Soweto during 1990. The study aimed to assess the cost of each service provided at DK and where possible, to identify areas of inefficiency. This paper is the first of two that report the findings of this study. It briefly describes the methodology employed and presents the major results. These raise several important management issues. Most importantly, the study suggests that there is excess capacity in the administrative and in several of the clinical areas of this community health centre; this implies that the average cost per service could be reduced in several areas. Certain services, such as home visits, are particularly expensive and require careful evaluation. The policy implications of this analysis are also examined. The high cost of several services implies that extension of this type of PHC service to all urban and rural areas is likely to be unaffordable.(ABSTRACT TRUNCATED AT 250 WORDS)

The costs of HIV prevention strategies in developing countries.

Since many evaluations of HIV (human immunodeficiency virus) prevention programmes do not include data on costs, a preliminary analysis of the costs and outputs of a sample of HIV prevention projects was attempted. Case studies, representing six broad HIV prevention strategies in developing countries with differing levels of per capita gross domestic product, were sought on the basis of availability of data and potential generalizability. The six prevention strategies studied were mass media campaigns, peer education programmes, sexually transmitted disease treatment, condom social marketing, safe blood provision, and needle exchange/bleach provision programmes. Financial cost data were abstracted from published studies or were obtained directly from project coordinators. Although estimates of cost-effectiveness were not made, calculations of the relative cost per common process measure of output were compared. Condom distribution costs ranged from US$ 0.02 to 0.70 per condom distributed, and costs of strategies involving personal educational input ranged from US$ 0.15 to 12.59 per contact.

The role of private hospitals in South Africa. Part I. Current trends.

This paper is the first of two that examine the present and the future role of private hospitals in South Africa. Part I describes the current structure and size of the private hospital sector, and analyses recent trends in the number and distribution of beds and hospitals, expenditure patterns, and utilisation of care. These observations are used as the basis for an analysis of the present role of the private hospital sector. It is argued that this sector is an important potential national resource for health care. However, the present contribution of private hospitals to national health care is limited by several factors. Access to a large proportion of these hospitals is restricted to those who can afford to pay, while the economic inefficiency and geographical maldistribution of fee-for-service and charity hospitals compound the negative effect private hospitals have on the public health sector. The gap between the potential contribution of private hospitals and current reality provides a strong argument for the development of a national policy that will improve the situation.

Costs of primary health care at the Alexandra Health Centre.

This study provides a detailed analysis of costs and expenditure patterns at a primary health care centre serving an impoverished community of about 200,000 people. Data were collected on costs and utilisation of services at the Alexandra Health Centre and University Clinic (AHC) for the financial year ending March 1990. Capital and running costs were kept separate. The sources of data collection were statistics routinely collected in the different sections of the clinic, the accounting records, staff duty rosters and a prospective study done to collect information to apportion drug costs and to calculate the cost of a prescription. The audited operating expenditure at AHC for the 1990 financial year was R3.9 million, or R4,45 million with donations (mainly drugs and staff). Sixty-three per cent of total costs went on staff, 16% on drugs and supplies, 9% on buildings, furniture and transport, 3% on laboratory services, 2% on security and 8% on other items. The outpatients department accounted for 57% of expenditure, the 24-hour unit 37% and the outreach section 6%. Looked at another way, 66% went on curative services, 32% on preventive and promotive (including 13% on maternity costs) services, and 2% on rehabilitation services. The average cost per visit to each of 14 services is presented. The cost of a visit to casualty is R38.85, to the antenatal clinic R18.65 and to the child health outreach programme for immunisation R6.67. The component costs of each visit are analysed. The major cost component of a consultation is usually clinical staff, and detailed staff allocations for each section are given.(ABSTRACT TRUNCATED AT 250 WORDS)

Private health care in South Africa: should the unions intervene?

The South African state's policy of privatization of health services has led to deterioration of public-sector health care and increased costs of access to this sector. This has generated an increasing demand for private health insurance among the predominantly black organized working class. These demands pose a dilemma for the progressive trade unions; negotiation of private-sector health insurance will have deleterious consequences for the equity and efficiency of the health services in general. Current trends in the private health sector also indicate that rapid cost increases will make most regular insurance packages unaffordable to the majority of workers within a few years. On the other hand, trade unions are obliged to meet the material demands of their members, and to intervene to stem the flow of individual workers to the private health sector. This article describes these trends, and the authors argue the case for intervention in this process by trade unions, in the form of union-negotiated and union-controlled "managed care" schemes. Such schemes will allow for the delivery of an adequate and appropriate package of health services at affordable rates. Union control will also allow for such structures to become the building blocks of a future national health service, and for incorporation into that service. Finally, the political implications of such interventions are addressed. The authors argue that the potential for undermining broader political campaigns and for creating divisions within the working class are important problems, but that many of these may be overcome through appropriate interventions.

The impact of the fee-for-service reimbursement system on the utilisation of health services. Part I. A review of the determinants of doctors' practice patterns.

The impact of different methods of reimbursement on the practice patterns of doctors has received little attention in the local literature. This series of three papers attempts to address this gap. Here the international evidence on this issue is reviewed. The 'information gap' between doctors and their patients allows doctors to induce demand for their services. This leads to the potential for doctors to increase the supply of services when they stand to gain financially from doing so, as is the case in the fee-for-service system. There is extensive international evidence, at both national and micro levels, of the link between increased utilisation and the fee-for-service payment system. This is in contrast with the pattern noted in the salary system, used in some health maintenance organisations (HMOs) in the USA, or in the capitation system, used in the British National Health Service. The 'practice setting' in which doctors operate also affects patterns of practice. In the local fee-for-service sector, 'third-party payment' means that both doctors and patients have little awareness of the direct costs of services. In other systems, such as HMOs, there is a strong cost consciousness on the part of practitioners. These differences in practice setting account in part for the different patterns of utilisation in these systems. The fee-for-service system, as it is structured in South Africa, thus leads to extreme inefficiency, and the development of alternatives is becoming an urgent necessity. All systems of reimbursement have certain problems, and some combination may be the best solution.

The impact of the fee-for-service reimbursement system on the utilisation of health services. Part II. Comparison of utilisation patterns in medical aid schemes and a local health maintenance organisation.

This study reports the results of a retrospective analysis of the use of a range of inpatient and outpatient services by the members of a health maintenance organisation (HMO), in which most providers are salaried, and by the members of three medical aid schemes in which providers are paid on a fee-for-services basis. The analysis shows significantly higher utilisation of all services by medical aid scheme members than by HMO members. Medical aid scheme patients saw all doctors 33% more often than their HMO counterparts. For general practitioners and specialists specifically, the differences were 36% and 18% respectively. Doctors looking after medical aid scheme beneficiaries ordered 133% more radiological procedures and 14% more pathological investigations than did those caring for HMO beneficiaries. Hospital utilisation was also higher for medical aid patients. While quality of care is difficult to measure, there are no reasons to suspect that significant differences in quality exist between the two systems described here. One factor that may contribute to the higher utilisation rates in the medical aid group is the higher average income of this group. However, these results also demonstrate that providers working in the fee-for-service system are likely to increase the supply of services compared with providers who are salaried. The different methods of reimbursement are compounded by the different practice settings in which these groups of doctors work; the HMO generates an awareness of costs that is absent from the independent practice, 'third-party payment' system of the medical aid schemes.(ABSTRACT TRUNCATED AT 250 WORDS)

The impact of the fee-for-service reimbursement system on the utilisation of health services. Part III. A comparison of caesarean section rates in white nulliparous women in the private and public sectors.

The caesarean section (CS) rate among white women aged 20-35 years and having their first baby was examined, comparing the private fee-for-service medical aid sector with Johannesburg Hospital. The chance of having a CS in the private sector was 50% greater than in the public sector (28.7% v. 19.5%). Twice as many CSs were done on weekdays as over weekends, and it is argued that only a quarter of these are accounted for by elective procedures (planned before labour begins). We also found that in the private sector the daily frequency of non-caesarean deliveries was 56% higher during the week than on Saturdays or Sundays. Considering non-caesarean deliveries separately, it is inferred that the rate of induction of such deliveries was 28.7% in the private sector compared with 2.8% in Johannesburg Hospital. The evidence strongly confirms the international experience that the CS rate in a given population is not objectively determined by medical factors and is strongly influenced by individual doctors' decisions. Moreover, fee-for-service reimbursement of doctors leads to increased intervention in delivery, in the form of more frequent induction of labour and more CSs.

The private health sector in South Africa--current trends and future developments.

The private health sector is experiencing a crisis of spiralling costs, with average annual cost increases of between 13% and 32% over the decade 1978-1988. This trend is partly explained by the high utilisation rates that result from the combination of the 'fee-for-service' system and the 'third-party' payment structure of the sector. Medical schemes have responded by promoting the idea of 'flexible packages', and have won the right to 'risk-rate' prospective members. It is argued that these measures will undermine the principle of equity in health care, and will not solve the problems of the private sector. Instead, a more significant restructuring of the sector is likely to emerge. This may take the form of 'managed care' structures, along the lines of the health maintenance organisation model from the USA. The principles, advantages and problems of 'managed care' structures are described. These are shown to be potentially more rational and efficient than the current structure of the private sector. Although some resistance to 'managed care' structures can be expected, the convergence of interests of large employers and trade unions in containing health care costs suggests that their emergence is a likely development.