THE DIRTY LINEN OF SA’S STATE HOSPITALS

Summary

The DA has over November 2005, conducted an analysis of Auditor-General's reports for the health departments of each of the nine provinces. This analysis reveals that in many cases, our public hospitals are financial sink holes. Enormous sums of money are pumped into them, but this money is often simply not accounted for or is squandered in ways that offer no obvious benefit to patients.

It is clear from these reports that if better financial management of hospitals were entrenched, it would be possible for hospitals to provide a substantially better level of care than they are able to currently, without increasing their budgets.

Many of the problems that the Auditor-General identified were centred around non-collection of hospital fees. Earlier this year the DA exposed the fact that hospitals were owed over R1.2bn in unpaid fees. Our analysis of these reports goes some way to explaining how this situation could have arisen - and, furthermore, makes it clear that this R1.2bn figure is likely to be a considerable underestimate.

Moreover, the reports reveal a wide array of other financial problems, suggesting that hospitals are, by and large, massively inefficient and wasteful and that hospital property is poorly maintained and protected.

It is alarming that only two of the nine provincial departments, which are responsible for the management of hospitals, obtained unqualified audit reports. In one of these provinces, strong reservations about certain aspects were expressed. In two provinces, the Auditor-General was not able to express an opinion about the validity of the accounts submitted.

A range of billing problems - including a widespread failure to keep records of what patients owe; little effort made to track down debtors; and extremely loose controls over access to patient records - resulted in large sums of money that should have been reinvested in health care remaining uncollected. It must be pointed out that fees in state hospitals are levied according to the patient's ability to pay, so no one should be charged fees they cannot afford.

In addition to billing problems, a range of other problems had a direct bearing on the capacity of state hospitals to provide quality health care. These include, for example:

• Significant problems with managing overtime payments and leave for hospital staff.
• Failure to maintain registers of equipment and other assets. Stock-taking - a basic requirement for any organization - had often not been done for several years.
• Major problems with medicines, including failure to protect them from theft; failure to keep proper records; failure to remove expired medicines; and failure to order new stocks before old stocks ran out.
• Lack of proper protection of hospital buildings; of patient records and of hospital equipment.

Below is a summarized report on each province, identifying the key problems in each one.

Limpopo: The audit opinion of Limpopo was not qualified, but strong reservations were expressed about a number of matters. In particular, the Auditor-General was concerned about a 33% increase on the previous year in unpaid hospital bills, and he concluded that patients were simply not paying their debts. He also expressed concern about a breakdown in record-keeping and control of hospital equipment. In some hospitals, stock-taking had not been undertaken for three years.

Free State: The Free State received a qualified audit opinion, based largely on inadequacies in the patient billing system; large amounts of irrecoverable debt; and poor control over medicines. R33m of accumulated debt was identified as irrecoverable, and no interest was being charged on overdue bills.

Northern Cape: The Auditor-General was unable to express an opinion on the Northern Cape's accounts, largely because of significant problems with debtors' records. Amongst the problems identified were that patients were not charged fees on the basis of their income; some medicines and procedures were simply not charged for; and debt was simply written off without the necessary authority. At the Kimberley Hospital, not a single patient made any payment on an outstanding account during the month that was reviewed.

Gauteng: Gauteng received a qualified audit opinion, with particular problems around the security, storage, and stock-taking of medicines. There were also weak controls over patient billing and recording of patient information. At some hospitals, for example, patient files and accounting reports either did not exist or could not be found. Where records were available, crucial information - like admission dates - was often not included.

North West: The audit opinion on the North West was also qualified. The Auditor-General found that virtually no effort was being made to collect patient fees and that patient information was scarce. There were, in addition, serious human resources problems - for example, he found that "The existence of some staff members could not be confirmed", and leave was often not properly authorized.

Western Cape: The audit opinion on the Western Cape was qualified. Many hospitals could not calculate patient debt, partly because a newly installed debtor information system could not generate the information required. There were also a wide range of staffing problems, including some double payments for overtime; poor record-keeping of hours worked - which made it difficult to establish the correctness of overtime payments; and failure to properly record leave taken. Malpractice and negligence claims increased dramatically from 23m in the previous year to R67m - which was probably due to severe under-staffing, according to the report.

Mpumalanga: The Auditor-General also issued a qualified opinion on Mpumalanga. He criticized in particular a human resources plan that contained no figures on human resources requirements or the supply available; and incomplete medicine stock inventories and poor security at many hospitals. Alarmingly, different rates were paid to sessional doctors working at different hospitals.

Eastern Cape: The Auditor-General could not express an opinion on the Eastern Cape, and concluded that hospitals in the province were in too poor a state to provide adequate health services. Particular problems were poor hospital security, inadequate hospital asset records and little control over equipment, medicines and medical waste.

KwaZulu-Natal: This province was the only one to receive a completely clear audit opinion, and no significant problems were identified. The province is to be congratulated on its report.

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