Private healthcare, or health-needs exploitation?

The recent announcement by private healthcare groups (Netcare, Medi-Clinic and others) that their ward and theatre fees would rise considerably (between 8% and 33%) this year — drawing the response from the Registrar of Medical Schemes that they would be taken to the Competition Commission if they could not explain why these increases are necessary, given that members of medical aid schemes would not be able to afford the consequent increases in medical aid contributions — should be put into perspective.

First, the announcement should be seen against the backdrop of the revelation, last year, that private hospitals had been adding substantial (and unjustifiable) mark-ups to consumables in hospitals.

From the hospitals groups’ brazen explanation that the ward and theatre fee increase is justified by the fact that they have to compensate for the recent loss of profit on consumables, it is apparent that they have been forced to drop the price of the latter. Perhaps the representatives of these private hospital groups openly display such cynicism because they feel that one should feel sorry for them, in a country where only the very rich and those who can afford to belong to medical-aid schemes have access to private healthcare — in other words, where the vast majority of the citizens have no choice but to go to state hospitals, in this way depriving them of all the additional profit they might otherwise have made.

The time is overdue for citizens to voice their displeasure — if not outright disgust — openly and loudly in the face of such cynical exploitation of the fact that, where people’s health is at stake, they would obviously want the best healthcare available. And because state hospitals are, by all accounts, not health facilities where one may expect the best healthcare these days, people are left with no alternative but to go to private hospitals — that is, if they happen to belong to medical-aid schemes or are independently wealthy.

But there are other reasons why, regardless of whether one receives good care at these facilities (and by and large it appears that the care is of good quality), it seems to me to be nothing short of exploitative. The first has to do with the fact that these hospitals cannot operate without medical doctors and nursing staff. And these — at least the doctors — are obliged, according to the ancient Hippocratic Oath that binds them, to do everything in their power to serve the best health interests of their patients. The more recent Geneva Declaration corroborates the spirit of its ancient predecessor.

Now, I would argue that medical doctors who are aware that some of their patients need sustained medical care urgently, and are aware of the likelihood that they would not receive such care in state health institutions, would want them to be admitted to private hospitals, even when such patients cannot afford it.

I’m also willing to bet that many medical doctors are shareholders in private healthcare groups. Would such doctors (and by association, nursing staff as well as administrative staff at private hospitals) not be in a position where there is a clear conflict of interests? The oath they have taken compels them, ethically speaking, to bestow all the necessary medical attention on their patients, but the very hospitals where this can be optimally done will not admit such patients unless they can pay the exorbitant fees required. And if such a doctor is a shareholder in the hospital group, the ethical dilemma is exacerbated.

I have a friend whose wife was bitten by a puffadder during their honeymoon, and because this was during the waiting period before she could claim medical-aid benefits (having been registered as his dependent just before their wedding), the private hospital where he rushed her would not admit her for treatment before he had forked out a substantial sum as cash deposit (I think it was R5 000; this was about 10 years ago). This kind of thing should not occur in a civilised country, where the needs of the patient should be attended to immediately, especially in such a case, where the loss of a limb, as a result of cytotoxic effects, is a real risk.

Such a dilemma (involving the conflict between the Hippocratic Oath and private hospitals’ primary emphasis on money, or profit) would never have arisen if healthcare had not been privatised, of course. And I would argue that health (in the sense of hospital) care should not be privatised, because healthcare should not, for ethical reasons, be conditional on patients’ economic capacity to contribute to health facilities’ profits. This is why many countries have public healthcare systems, some better than others (I am told that the British National Health system has deteriorated compared with similar health services in European countries) — it is a civilised thing to do.

But let me not be so uncompromising — let’s say private healthcare is an admissible idea, on condition that the interest of such facilities in maximising profits for their shareholders be tempered by the mitigating factor of considering the interest of the public at the same time. I fully expect readers to object that this is a contradiction, or at least that the two things are incompatible. Not necessarily.

It is true that, in most countries, following American legislation in this regard, the law determines that the only strictly legal responsibility on the part of corporate decision-makers is to maximise profits for their shareholders. I suspect that this is the case here, too, in practice if not de juris. This has an interesting history — one that casts Henry Ford in what seems to me to be nothing less than a heroic role as far as his conception of service to the public is concerned.

When Ford wanted to divert money from dividends to customers in the form of price reductions on Model T cars in 1916, claiming that profits were less important than service to the public (yes, I know, it’s amazing, coming from one of the giant figures in capitalism’s industrial history — he still had a social conscience!), the Dodge brothers, who were major shareholders in the Ford company, took him to court, claiming that he wanted, effectively, to give their and other shareholders’ money to customers. The judge agreed with the Dodges, and this verdict set the precedent for the (by now) entrenched principle, that the only responsibility that corporate decision-makers have is to make as much profit as possible for the shareholders of companies.

In an age where the social and environmental responsibility of corporations has come under the spotlight in no uncertain terms, this sounds incongruous, to say the least — in Canada, for example, companies have to include a section on environmental responsibility in their annual reports, and so-called “triple bottom-line reporting” is becoming more common every year all over the world.

How does this tally with what I pointed out above about the exclusive focus on profits? It does not take a genius to realise that, as Joel Bakan puts it in his powerful analysis of all the facets surrounding corporations in his book The Corporation: The Pathological Pursuit of Profit and Power: “corporate social responsibility is thus illegal — at least when it is genuine”.

What this means in practice is that, as a judge (Lord Bowen) realised in 19th-century England already, charity (or social responsibility, for that matter) needs not be excluded from a corporation or company’s activities or decisions, as long as it is in the long-term interest of the company (and the shareholders) concerned. In other words, once a company realises that short-term loss of profit is likely to be offset by long-term profit through increased public support, both sides are likely to win to a certain degree — even if one knows that the apparent concessions on the part of corporations have ulterior motives.

In the case of private hospital groups in South Africa, this would translate into some consideration on their part of the public, in a context where the rise in the cost of living has resulted in private (or good quality) healthcare rapidly becoming a luxury, excluding the vast majority of the people in this country.

If they were to find ways of doing this, more people would be able to make use of their services, and in the end they would probably increase their income. The other side of the coin, of course, is the question of the quality of healthcare in state hospitals — if this were to be improved dramatically, I, for one, would prefer to go to a state hospital rather than to a private one.