Netcare. Picture: FINANCIAL MAIL
Netcare. Picture: FINANCIAL MAIL

HEALTH Minister Aaron Motsoaledi and JSE-listed private hospital group Netcare are at loggerheads over its partnership with the Lesotho government. On Friday the parties sketched two very different pictures of Lesotho’s flagship hospital to the Competition Commission’s health market inquiry.

The Queen Mamohato Memorial Hospital (QMMH) is strategically important to Netcare because it is the first public-private partnership it has concluded in Africa that includes the provision of clinical services, which it has been unable to do in South Africa. However the South African government is wary of such projects, fearful of getting caught up in long-term contracts that prove more expensive than anticipated

On Friday morning Netcare made its first public oral submission to the inquiry, describing the improvements in the quality of care available to patients in Lesotho since the QMMH replaced the delapidated government-run Queen Elizabeth II hospital in 2011. Mortality fell 41%, the pediatric death rate from pneumonia fell 65% and the maternal death rate fell 13%, Netcare head of health policy and strategy Melanie da Costa told the inquiry.

That afternoon, the minister deviated from his prepared presentation to take issue with Netcare’s portrayal of the project, saying it had proved so expensive that the Lesotho health minister had appealed for his help to exit the contract.

"This deal is taking 35% of the Lesotho health budget. The (health) minister said it has affected their primary healthcare budget. Because they flow over the borders, it affects me. Patients are referred to Universitas Hospital (in Bloemfontein) and it is now owed R86m. The debate now is who must pay," said Dr Motsoaledi.

"The minister of health in Lesotho (Molotsi Monyamane) gave me a huge file in October last year, and said ‘you guys in South Africa you are a big brother, you have lots of lawyers, please take us out of this contract, it is terrible’. Today when it was being mooted as one of the best I phoned the minister and he said he wants to come to this commission to talk for himself," said Dr Motsoaledi.

Inquiry panel chairman Sandile Ngcobo agreed to the request Dr Motsoaledi said he had received from his Lesotho counterpart, and instructed the inquiry’s technical support team to facilitate a submission from Dr Monyamane.

Netcare holds 40% of the Tsepong consortium, which won an R800m tender in 2007 to build, finance and run the QMMH, refurbish two filter clinics and build a third. The International Finance Corporation and the World Bank had advised the Lesotho government on the scope of the tender.

A key feature of the project was that risk transferred to Netcare, as the Lesotho government paid an annual fixed unitary fee for a set number of patients, regardless of the treatment they required. The tender covered 20,000 in-patient admissions, and 31,000 outpatients, but extra patients carried an additional fee.

Ms da Costa subsequently told Business Day the project had proved more costly than originally anticipated because demand for services was higher than predicted, but it was not taking the lion’s share of Lesotho’s health budget.

"The suggestion that this project consumes the bulk of Lesotho’s healthcare budget is simply not true. The healthcare budget tabled in Parliament last week in Lesotho was R1.8bn. The total unitary fee for this public private partnership for the year is R458m, only 25.8% of the budget," she said.

"One of the potential unforeseen consequences of establishing a referral centre of this quality and nature is that people that should be using other facilities are flocking to (it) because of the high quality of service it affords," said Ms da Costa, noting the QMMH treats almost three quarters of all hospital admissions in Lesotho. It was also treating patients from South Africa who had dual nationality, she said.