The South African Dental Association [SADA]
BY DR N CAMPBELL
NATIONAL PORTFOLIO COMMITTEE ON HEALTH
19 AUGUST 2003
THE NATIONAL HEALTH BILL, 2003
Honourable Chairperson, Honourable Committee Members and delegates present,
- The South African Dental Association [SADA] welcomes this opportunity to present its views to the Parliamentary Portfolio Committee on Health on this most important issue and expresses its appreciation to the Chairperson and the Committee for allowing us to speak to you.
- My name is Dr Neil Campbell and I am the Executive Director of the South African Dental Association. Mr Punkaj Govan legal advisor of our Association accompanies me here.
- SADA is a professional association of dentists inaugurated in 1998 having successfully achieved unity in the dental profession and the Association represents more than 80% of dentists practising in the public and private sectors in the Republic of South Africa. My Association has mandated me to speak on their behalf.
- The Honourable Members present are kindly requested to consider this presentation in conjunction with our earlier submissions in November 2001. In this presentation, due to time constraints, we will deal principally with the provisions of Chapter 6 and its impact on the dental profession.
- Our Association is committed to positively contributing to any review of policies or provisions that broaden access to oral health care. Our position is based on the fundamental premise that competition in a free market is the best way to achieve quality and accessible services for all.
- It may appear that this submission focuses only on areas of concern to us. Should this be the case, it must be attributed to time constraints.
- In the development stages of this Bill role players like SADA were not consulted or allowed to participate.
- Our Association is committed to the adoption of any dental delivery programmes which allow individuals, families and communities reasonable opportunities to receive oral health services according to their needs in a free market system.
- We submit the provisions of the Bill will have major ramifications for the private sector, complicated by its relationship with the public sector.
- Although, the Bill does contain some very positive aspects, it fails to recognise the fundamental right of the dental profession to practice their profession freely in South Africa (which right is entrenched in the Constitution) and to ensure financial stability of private healthcare. It is argued that the Bill may be part of a trend towards over-regulation of the private sector. Dentists and other health care providers, who are trained at great expense to the taxpayer, may be forced to leave South Africa for other unregulated or less regulated markets because it creates an inflexible barrier to dentists’ right to practice their profession.
- To force dentists in the private sector to comply with licensing requirements cannot be considered as reasonable and justifiable in an open and democratic society.
- The South African health system has not yet found a mechanism to address the inherent disparities between private and public sector care. Some of the provisions of this Bill can hardly be considered acceptable solutions to filling this gap. If the Government wishes to utilise private sector resources and provide social services in the health sector, it should do so in a less regulatory manner.
- We acknowledge the agenda for change is tough, the pressure of legitimate expectations is intense and the economic climate is harsh. In the past the Department of Health has not been sufficiently sensitive to the pressures their decisions place on those responsible for implementing them and the tremendous unintended consequences.
- The legislative and regulatory goals should be reassessed in relation to the new conditions and needs in the health care system.
COMMENTS ON THE PROVISIONS OF THE BILL
CHAPTER 1 –OBJECTS OF ACT, RESPONSIBILITY FOR HEALTH AND ELIGIBILITY FOR FREE HEALTH SERVICES &
CHAPTER 2 - RIGHTS & DUTIES OF USERS AND HEALTH CARE PROVIDERS
We submit that the statutory councils presently governing the health care industry regulate many of the issues contemplated in Chapters 1 and 2. As the Bill shall prevail over all other health legislation it is likely to have financial implications for health providers and result in unnecessary duplication of resources and regulations. In some instances bodies created by this Bill already exist under other names. The Health Professions Act and statutory council rulings already deal with the issues contemplated herein.
CHAPTER 3 – NATIONAL HEALTH
s 20- General functions of national department
We recommend the inclusion of oral health services in s 20  as part of the national health policy for which the Director-General is responsible.
s 21- Establishment and composition of the National Health Council
- Success of the envisaged National Health Plan will of necessity require the participation and commitment of the private sector, which is glaringly omitted from representation on the National Health Council.
- Many public health services engage with any number of private sector enterprises in a routine commercial manner. In addition many government services also benefit from outright donations from the private sector. We would urge the Committee to reconsider adequate representation of the private sector on the National Health Council.
s 22 - Functions of the National Health Council
We recommend that the private sector, and in particular the dental profession, be invited to play an active role in the functions of the National Health Council and the development and formulation of policy considerations identified herein.
ss23 – 26- Establishment and Composition of National Health Advisory Committee and National Consultative Health Forum
We similarly reiterate proper private sector and, in particular, dental representation on the envisaged committees and participation in the formulation of national oral health plans.
CHAPTER 4 – PROVINCIAL HEALTH
ss 27 – 33
As the provincial health departments are obliged to act in accordance with the national health policies, we would suggest similar representation and participation of the private sector in the development of provincial oral health plans. This will ensure a more active role in decision making and sharing of provincial health issues amongst stakeholders of which the dental profession is one.
CHAPTER 6 – HEALTH ESTABLISHMENTS
s 40- Classification of health establishments
- We are deeply concerned that fundamental issues and key decision making powers regarding classification of health establishments into categories are to be enshrined in the Regulations. This will have tremendous implications for the future viability of the dental profession.
- The Minister is empowered by regulations to dictate the future conduct of dental health establishments in the private sector. These regulations shall not be subject to parliamentary scrutiny – a fundamental need in any true democracy.
s 41 - CERTIFICATE OF NEED ["CON"]
- CON was introduced in the 1970s in some 38 states in the US. Its primary purpose was to reduce health care costs by limiting the number of health care establishments providing identical services or having identical equipment within a given geographical market.
- Most CON programmes had one stated goal: the promotion of equal access to quality healthcare at reasonable cost. The problem is that this single, seemingly unimpeachable goal is in reality three goals that compete and are often mutually irreconcilable: quality, accessibility and cost control.
- The CON programmes were not used to regulate the practice of health care professionals. The regulators in the US feared that the costs of buildings and operating such facilities would result in incentives to perform unnecessary procedures. In South Africa, with the ongoing investigations of abuses by statutory councils coupled with managed care forensic investigations and selective provider contracting, there is adequate control of private practitioners.
- In the United States many states have allowed their CON programmes to expire as they are regarded as anticompetitive and unduly regulatory in nature.
- We strongly believe CON will struggle to strike a balance between competition and preventing duplication of services. It will stifle free competition and force dentists to spend vast amounts on application fees, extensions, reviews and attorneys.
- The introduction of a Certificate of Need ["CON"] for the private sector dental providers is equivalent to the reintroduction of the Group Areas Act, which dictated amongst other things where certain persons resided or carried on a business, trade or occupation.
- The period of one year after commencement of the Act to obtain a "certificate of need" is far too short and creates a lot of uncertainty for dentists who have set up costly practices.
- One of the characteristics of a general dental practice is the high initial capital outlay. There is no State assistance for establishing a new practice, so generally dentists must take out substantial commercial loans from banks. All the dental equipment used in a dental practice is imported and thus subject to the rigours of exchange control fluctuations.
- Private dental practices must perform as businesses by maintaining services, reducing costs and evaluating the financial environment. Yet having an artificial restraint of trade will impose an obstacle to those very requirements. If we want dental practices to be successful, they need to be able to compete and provide services.
- We do not disagree with the goals of maintaining access and quality while holding down costs but we would argue that those goals could be accomplished in other ways.
Exemption for Dental Profession
We submit that dental profession should be exempted from the provisions of CON. Statutory intervention in the realm of dentists’ right to practice is neither necessary nor desirable and the present position should be maintained. We do not believe that this exemption will result in a free-for-all for expansion of an already highly regulated dental profession. Instead focus should be on quality standards and affordability of clinically related oral health services.
s 41 
- The Director-General is given too much authority to make determinations on issues contemplated herein. One must also question the Director General’s capacity or resources to monitor and regulate the provisions contained herein. In addition, the absence of proper representation of the private sector on the Council and consultative bodies offends transparency and principles of democracy.
- We predict the CON process for renewals and applications by health providers will degenerate into acrimonious turf battles amongst competing providers and other facilities.
- In the event that our submissions are rejected we contend that where there is a need to move from an unregulated environment to an environment where CON is mandatory, a longer transition period than one year is necessary.
- Patients are entitled to continuity of care and the transition period will allow them to receive this care. Practitioners, having established their practices, patient bases, families, friends and so forth, cannot be expected to move because of the refusal of the Director General to grant an application for or renewal of the "certificate of need".
s 41 
- The considerations to be investigated by the Director General when issuing or renewing CON as a precondition for the acquisition or running of a dental practice, are a violation of the rights of dentists to practice their chosen profession as entrenched in the Constitution.
The primary reason often cited for enacting CON is to control health care costs by limiting the supply of facilities and services which in turn is meant to reduce service use. We would argue that the introduction of CON will reduce competition, constrain lower cost alternatives and impede the development of some forms of managed care.
CON is not an effective mechanism for controlling overall per capita health care spending. Government sanctioned barriers cannot be effective in restraining costs of health care investments. Those with CON will be the only players in the market, not pressured to deliver high quality care at the lowest prices. Basic economic principles indicate that artificial barriers on competition increase costs.
The expenditure in time and money spent by administrative agencies and providers in complying with the CON process will substantially reduce any saving attributable to it.
- QUALITY OF CARE
Studies have found CON does not provide a means to monitor quality after a certificate is granted.
Although CON may promote a concentration of services and construction of facilities, it cannot monitor dentists’ performance or patient outcomes without a major change in staffing. It is doubtful whether the envisaged inspectorate can fulfil these functions.
The Bill seeks to improve access to health services through the CON regulatory process. Several studies conclude that CON has had a limited ability to affect access.
To facilitate this redistribution of dentists the Government should consider offering proper incentives and rewards for working in underserved areas.
Unlike their colleagues in urban areas, there are many inconveniences and expenses associated with working in remote areas, including bad roads, unreliable telephones, inadequate recreational facilities, schools, access to dental libraries, professional development etc. For most professionals these situational factors are serious disincentives to working in rural areas.
A programme should be developed which will help underserved communities to help themselves in recruiting and retaining dental professionals. The programme should include technical assistance workshops for communities and facilities from underserved areas, internet facilities for technical assistance and financial incentives to support innovative approaches in recruitment and retention.
Discouraging the entry of new dental providers through the CON programme is giving, in effect, a franchise to existing providers, by eliminating competition and the restraining effect that competition can have on prices.
s 42 Duration of certificate of need
- Dental practitioners should not be requested to practice under a vague CON, which is uncertain as to the conditions of issue with only a maximum period being specified. This creates a climate of uncertainty and may have negative consequences for patients under care. It may also impact on many economic decisions dentists are forced to make.
- The Director-General is given far too much authority to determine the duration of the certificate of need. Although we disagree with the principle of CON, if it is proceeded with we recommend that once you receive a CON, you should have it forever.
- A CON will stifle competition and innovation. Reduced competition leads to market power which leads to market failure. It is extremely bureaucratic, and no practitioner would relish having to go through this process.
- CON will most certainly restrict the patient's freedom of choice in health care. It will severely inhibit the dentists' right to freely move and relocate within the borders of South Africa. The flexible use of human resources to meet societal needs for service requires the free movement of practitioners between locations.
- If CON is introduced there must be some form of reciprocity between provinces that will allow practitioners freedom of movement within South Africa.
- The freedom to contract is a fundamental constitutional value in South Africa. Legislative interference with contractual freedom and the contract mechanism should be limited to a minimum and should be approached with caution to avoid the serious consequence which interference with the law of supply and demand can have.
- No system of regulation will succeed unless it has adequate resources to apply to the activities contemplated therein. Historically, all the costs of regulation have been borne by those regulated. These costs will drive expenses up and may be passed on to consumers.
s 43 - Appeal to Minister against Director-General’s decision
It is recommended that the review authority be assigned to a body rather than a Minister.
s 44 - Regulations relating to certificates of need
- We reiterate that far too many important powers are vested in the Minister to promulgate by way of regulations which are not subject to the rigours of scrutiny
- The provisions relating to the renewal of the certificates of need should ideally be in the Act and not provided for in the regulations. There is far too much uncertainty created by stipulating that the requirements will be promulgated in the Regulations.
s 45- Offences and penalties in respect of certificate of need
Dental practitioners will now be subject to the jurisdiction of both the Director General and the statutory council. This is an unnecessary duplication of resources.
CHAPTER 10 – HEALTH OFFICERS AND COMPLAINCE PROCEDURES
Dentistry is already a highly regulated profession and the administrative burden imposed by these provisions is likely to discourage the practice of dentistry in South Africa and encourage practitioners to move to less regulated environments.
- These comments might be viewed by some as reflecting a prejudiced view, but we do not know how the imposition of CON for dental practices will look post acceptance of the Bill. The uncertainties contained in the Bill and the extensive powers given to licensing and its functions make this impossible.
- State assessment of the desirability of new investments and dental practices is unnecessary because private investment decisions are sufficiently cost conscious. Dentistry is a highly regulated profession where excess capacity does not go unused. Patients cannot be expected to seek part of their dental services from facilities having certain equipment. If dentists raised their costs by investing too heavily in extra production capacity, they would lose business to more efficient competitors, who charge lower prices and still make a profit. This is a powerful disincentive to "unnecessary" investment in equipment.
- The CON programme cannot restrain health care costs by regulating the supply of services and facilities. Today most health care is provided under strong controls of managed care plans, which themselves are under pressures from public and private purchasers to control costs.
- This uncertainty and over-regulation of the private sector alone should be sufficient cause to stay the acceptance of those provisions of the Bill until further investigations are conducted.
- It must always be remembered that we are caring for people. One of the most effective elements of building a caring ethos is to get personalised care from constant providers, rather than anonymous care from whoever happens to be available next.
- The provisions of the Bill should be minimally prescriptive to the private sector to engender their spirit of collaboration and participation.
- We call upon the Department of Health to seriously consider the ramifications of the proposed Bill for dentists. There is no evidence that indicates that CON for dental practices will be beneficial to the public interest.
- An environment fostered by the certificate of need programme is more detrimental than any deregulation would be. The problems faced by the present health system cannot be solved by the "one size fits all" approach.
- It is equally important that we all continue to feel a connection with the ideas and the strategies we have generated – and a more pressing obligation to putting them into practice. Perhaps the most basic truth presented here today is that health for all will only be achieved through the sustained and focused action of every organisation with an interest in health drawing on the energy of the communities we serve.
Compiled by South African Dental Association [SADA]