Healthcare costs consistently outpace inflation. In South Africa, these costs are not regulated so it is pivotal for medical aid schemes to explore ways and means of decreasing costs on the supplier side, particularly with hospitals.
This is coupled with a private healthcare industry cost blow-out in 2016 (largely related to increased hospital admission rates) and an oversupply of private hospital beds, particularly in metropolitan areas. There are approximately four private hospital beds per 1,000 medical scheme beneficiaries in South Africa and this number is increasing.
Oversupply of hospital beds
“Some parts of the country have as many as six beds per 1,000 people. This is twice or three times higher than the ratio seen in efficient systems with good community-delivered healthcare services,” says Dr Brian Ruff, CEO of healthcare management company, PPO Serve.
For example, the UK has 2.5 hospital beds per 1,000 population and New Z
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