Rent-seekers are behind SA nursing crisis

Netcare CEO Richard Friedland’s warning of a nursing crisis looming in SA is a depressing reflection of the state of the country.

A cohort of ageing nurses, many about to retire, is not being replaced, due to government inaction. It was warned well in advance but chose to ignore the warning, Friedland says. Netcare was accredited to train more than 3,000 nurses a year but allowed to train “barely a tenth of that”.

Clearly there is demand for more nurses and a large potential supply given the employment benefits and career prospects of the profession. Why would the government stand in the way of Netcare and others helping to close the gap between supply and demand?

One explanation is the argument against private medicine in principle. The case for equal treatment for all, paid for by the taxpayer, is one the dominant ideologues in the health department cling to fervently. Nursing and other services provided privately threaten this vision.

Yet even the ideologues appear to concede the case for better-off individuals being able to pay extra for top-up medical benefits. Perhaps they understand that wealthy people are likely to take themselves and their contribution to government revenue away from SA for want of world-class and affordable medical services. This is a service we can now receive from private hospitals and independent physicians — if we are willing to pay.

For an economy obviously lacking in human capital — not only the capital embodied in the cohort of nurses who are such attractive potential emigrants — the consequences of an uncompetitive medical offering for highly mobile skilled South Africans are truly disastrous for income growth and taxes collected in SA. It is these taxes on which any National Health Insurance (NHI) system must ultimately depend. Equal and hopelessly inferior is not an attractive prospect, even for those who ignore the realities of our government-provided medical services.

But why is the government, with its own large suite of public hospitals and enormous budgets, failing to train more nurses, and doctors for that matter? The answer is in the existing budget constraints.

Budgets provide well for those already in government service and offer employment benefits that keep up with and often exceed rising living costs, but they leave little to employ new government service entrants, of whom there are potentially legions.

The private sector does not compete at all well with the public sector in competing for workers of all skills, taking into account the private medical and pension benefits public sector employees now draw upon. But more important in the resistance to private medicine may be the force already prominent in explaining the actions and allocations of budget commonly taken by state-operated agencies in SA — public hospitals and their procurement practices definitely not excepted.

The taxpayer is held to ransom by opportunists who intermediate between the state as payer and providers of health services and equipment. They have been extracting wealth from taxpayers on a mindnumbing scale, as the Zondo state capture commission, media and US government have revealed.

It is envisaged that the NHI system will be the single payer for all health services provided by the state. The intended budget will be enormous. The opportunities to navigate gaps between the government as payer and the service and goods providers will be many and lucrative. It is unfortunately a reality that you cannot do (big) business with the SA government without a bribe or kickback.

The evidence vitiates the case for a universal healthcare system in SA. But the private interests promoting such an arrangement are immensely powerful. SA private medicine providers in SA have to resist strongly to survive. They must make their case to the voting public, as Netcare has done.