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Auditor-General again flags medico-legal claims risk for health sector

The Auditor-General of South Africa (AGSA) has again raised concern about mounting medical-legal claims against state hospital, saying they have identified such expenditure as "an emerging risk", which could pose a "significant future problem for the sector".

News24 reports that National Assembly's Standing Committee on Public Accounts (Scopa), in a briefing by AGSA, yesterday heard that total claims against the health sector amounted to more than R68bn in the 2022/2023 financial year, excluding the Limpopo Health Department, whose audit was not signed off at the cut-off date. It also excludes the Western Cape Health Department, because it did not record any claims.

During the year, the sector paid R1.42bn in claims. The previous year, the total claims were just below R82bn – and it paid out R926m. The year before that, the claims were almost R122bn, and it paid out R1.75bn.

Sekgetho said they had identified the expenditure on medico-legal claims as a focus area.

"You can't budget for the medico-legal claims because, at any point, you don't know how much you are going to have to pay out."

He added that, by paying out these claims, it "erodes" the budgets of the departments, meaning they had to spend less on buying medical equipment, for instance.

"So you're eating away from next year's budget, or even this year's budget, if you're paying on these medico-legal claims."

"The financial health of the sector has also been under immense pressure over the years because of the limited budget and poor financial management," reads AGSA's presentation to the committee.

Furthermore, the total claims against the health sector constituted roughly 75% of the sector's budget.

"If these claims are not managed efficiently, as highlighted in the medico-legal claims above, these may result in medico-legal claims being paid by the sector, further putting pressure on the available funds for service delivery," reads AGSA's presentation.

One of the causes of the payouts was something as basic as proper record keeping.

"In our previous general reports, we have consistently highlighted the need for the health sector to pay specific attention to medical record keeping because claims often cannot be successfully defended without these records and need to be paid out. The department is also ordered to pay interest on claims not paid out to beneficiaries by the time ordered by the court. This interest is then a further financial loss for the department," stated AGSA.

"The poor record keeping of medical records has still not been attended to by the Health Departments in four provinces (Eastern Cape, Gauteng, KwaZulu-Natal and Northern Cape). This is because the establishments did not ensure that health records containing prescribed information are created for every user of health services and are maintained at that health establishment."

News24 – Medico-legal claims a 'ticking timebomb', says Scopa chair

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