Johannesburg - Doctors and all other health professionals face a restriction on the amount of shareholding they can have in private healthcare establishments.
The move, which has sparked uproar in the private healthcare sector, is intended to curb unethical practices and conflicts of interest that manifest through ownership of shares by health practitioners in private healthcare entities.
The Health Professions Council of South Africa (HPCSA), the statutory body for regulating doctor conduct, is opposed to health professionals having shares in private healthcare establishments, but given the prevalence of the practice it is now proposing a limit to the amount of equity that can be held.
"The HPCSA has always been concerned about perverse incentives and conflicts of interests as manifested through ownership of shares by healthcare professionals," says HPCSA registrar Advocate Boyce Mkhize.
"For that reason, the HPCSA has insisted that practitioners should not own shares in private healthcare establishments, except with written authorisation from the council and even then, such shareholding should be capped at 10%," he added.
Control private clinics
Mkhize and Dr Abdul Wahab Barday, the Ombudsman of the health professions, recently raised this ethical issue with the leadership of the Hospital Association of South Africa (Hasa).
They raised concern about the large numbers of doctors and specialists who owned and in some instances even controlled private hospitals and clinics.
Mkhize said the maximum percentage shareholding that health professionals can hold in a private health establishment is 10% in total. If there is more than one professional, then that 10% must be divided among the total number of investors, the two authorities cautioned.
"Health professionals should purchase shares in accordance with the Health Professions Council's rules.
"These include informing the council of the intention to purchase and the nature and price of the transaction.
"Any equity or shareholding purchased may not be discounted or subject to any preferential financial agreement. Accordingly, the terms, conditions and nature of such purchase agreements must be disclosed and approved by the council prior to finalisation."
Perverse incentives
The proposal appears to have not been well received by the affected health professionals. Mkhize would not say when the proposal would be applicable.
"Unfortunately we are not able to provide details at this stage given the highly sensitive legal issues around this matter," said Mkhize.
Close relationships between hospitals and health professionals foster perverse incentives.
The HPCSA has received complaints from patients who underwent clinically unnecessary operations and other procedures at facilities owned by health practitioners.
Misleading ads
It has recently also cautioned the public about misleading advertising for cosmetic surgery and threatened to discipline the health practitioners involved.
"We are gravely concerned about the flurry of advertisements in the print and electronic media on cosmetic surgery and elective procedures. In some circumstances, these advertisements are not entirely accurate in that they are based only on these procedures being successful.
"Yet evidence abounds that there are serious failures at times which are often downplayed or never mentioned," Mkhize said.
The competition authorities have also voiced concern about oligopolistic tendencies in the private healthcare sector.
The Council for Medical Schemes (CMS), regulator for the medical schemes industry, has also spoken on the need to eliminate perverse incentives, unethical business practices and unprofessional conduct from the private healthcare sector.
Hospitalisation costs surge
The CMS says vertical relationships between doctors and hospitals contributed to the steep increases in costs of private hospitalisation.
Private hospitalisation costs have gone up 70% since 1999.
The department of health is also looking to regulate prices through a national reference price list.
The industry and other stakeholders had until the end of last month to submit comments on the draft regulations.
Entrepreneur Dr Anna Mokgokong, a non-practising medico with interests in the private healthcare sector, said the intentions to regulate doctor-hospital relations were honourable but she did not think imposing arbitrary caps was the way to go.
"I obviously have a problem with a practising surgeon referring a patient to his own hospital, but we also have to think about empowering the other healthcare professionals, especially the underpaid nurses," she said.
"We must be careful that the good intentions do not frustrate broad based black economic empowerment," she said.