Comparison of Private Hospital Prices in SADC countries with Hospital Prices in OECD Countries

Recent study by OECD concluded that private hospital prices in South Africa are expensive for South Africans. The study showed that price levels for private hospital services in South Africa are comparable to the levels observed across OECD countries and that they (price levels) are around the levels observed in countries with much higher GDP levels, such as France, Germany or the United Kingdom.

The Board of Healthcare Funders (BHF) of Southern Africa has expressed interest in collaborating with WHO to replicate the study among the SADC countries. Experts on health financing have been consulted and they have agreed with WHO South Africa and BHF that the study is necessary in the SADC region.

The first step is engaging relevant stakeholders about the study to clarify the aims of this project and manage their expectations, clarify the roles, financial requirements and agree on the final output of the project. Buy-in from the various governments and payers has to be secured. During this phase the stakeholders should agree on their role (provide data, agree with publication of results, provide input into interpretation, provide funding, validate data etc.) which will put WHO/OECD into an independent position. Only such “outsider” view will allow WHO and OECD to interpret the results from health system perspective focusing only on the data received.

It should also be communicated that the international hospital price level comparison is just a starting point for further analysis and cannot provide information on the driver of the prices, how market structure, demand or supply shape the prices. It can hint the direction for further research but is essentially “only” a price comparison framework.

To understand the organization of the provision and payment of hospital services and the information systems which underpin the transaction between payers and hospitals, a feasibility study should be conducted. This study can be in a form of interview or standardized questionnaire with relevant stakeholders, usually the government officials or representatives of private insurance companies or their administrators.

Feasibility study investigates the market structure (e.g. the share of population covered under the scheme reporting the data) and how representative is it to the whole market. It also collects information on the information available to identify the admission case types based on a coding mechanism of procedures and diseases. It asks about the price and how it was set and whether it includes all parts of the admission (hospital component, medical specialist, pharmaceuticals, co-payments etc.). Data received from the countries would help determine which countries would have adequate data to participate in the comparative study. Template to collect such data has been sent to BHF to be forwarded to the Data providers in the SADC countries