The critical shortage of nurses in South Africa has serious implications for the implementation of a nurse-dependent National Health Insurance (NHI) system, but it also appears to be a significant cost driver for the private hospital sector.
Moneyweb reports that in their submissions to the panel inquiring into cost increases in South Africa’s private healthcare industry Mediclinic, Netcare and Life Healthcare (LHC) stressed the effect of labour costs on price increases at private hospitals. These groups, who have a combined private hospital market share of about 70%, argue that the above inflation increases in private hospital costs, expenditure and prices have been driven by a range of factors, which are unrelated to the state of competition in the private hospital market. According to the private hospital groups the increase in the price services largely reflects the increase in their input costs, to which labour expenditure contributes heftily.
In 2007 the Department of Public Service and Administration's Occupation Specific Dispensation (OSD) resulted in higher levels of nurse salary inflation in the public sector. According to the hospital groups this has placed upward pressure on the nursing salaries in the private sector. The private hospitals say they have to increase nurse salaries each year at levels well above CPI in order to catch up to the salaries offered by the State.
To address the nursing shortages Mediclinic, Netcare and LHC have training programmes to qualify nurses, but all voice that regulatory restrictions limit their ability to do this effectively. The SA Nursing Council (SANC) restricts the number of nursing students that nursing educational institutions can train. Netcare says it has not been able to establish what criteria are used in this regard, nor does it appear that they are consistently applied.
[link url="http://www.moneyweb.co.za/moneyweb-south-africa/nurse-shortage-behind-increase-in-private-hospital"]Full Moneyweb report[/link]