Gauteng hospital private wards owe R56 million

14 November 2019

The Gauteng Health Department’s Folateng private wards, which were supposed to be closed down but still operate at the Charlotte Maxeke Johannesburg Hospital (CMJH), are owed R56.5 million in patient fees from private patients.

This is disclosed by Gauteng Health MEC Bandile Masuku in a reply to my questions in the Gauteng Legislature.

According to Masuku, the Folateng wards at CMJH have 137 approved beds, but currently only 37 are used for private patients while the rest are used for state activities.

Last year, R20 035 027 was spent on goods and services for these private wards, which brought in R20 932 467 in revenue. The surplus was R897 440, but staff and machinery costs are not given, so there was certainly a large loss.

At 31 March, which is the end of the last financial year, R49 780 114 was owing from medical aids and R6 757 154 in cash, the vast majority longer than 120 days. This means that R56 537 267 is owed in total and is likely to be written off as uncollectible.

Masuku says the following lessons have been learned:

Proper operating costs of the unit should have been done and reviewed;

The process of integrating private and public service staff should have started earlier;

Staffing of the billing office to ensure all monies owed are recovered;

A different model of contracting doctors to ensure continuity of treatment;

The full review of whether the ward met the objectives of what it was intended for, risk identification and project management skills would have assisted in defining clear milestones to be achieved and risk mitigation.

The Folateng private wards were launched in 2002 and were supposed to provide revenue for public patients but failed dismally. They were supposed to be closed in 2014 when then Health Minister Aaron Motsoaledi complained about them.

The major problem was poor costing and collection of patient fees, which resulted in R569 million written off.

The real lesson to be learned from this expensive failure is that the state is a very poor administrator and should not be entrusted with running a complex NHI where the risk of disaster is high.

Issued by Jack Bloom, DA Gauteng Shadow Health MEC, 14 November 2019