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Battling corruption in the South African healthcare system

South Africa is reeling from the latest corruption scandal, this time in the tender process for the procurement of COVID-19 medical supplies. Shrikant Peters explains the impact of the misappropriation of funds on the fight against the pandemic and recommends measures to hold the health sector accountable for the allocation of resources.

Reports of large-scale tender corruption in the procurement of Personal Protective Equipment (PPE) meant to protect the country’s healthcare workers has recently made headlines in South Africa. These disturbing allegations coincide with the country’s peak of COVID-19 infections, which has so far infected more than half a million South Africans, and claimed the lives of over 10 000 people, many of them healthcare workers.

How corruption works in the healthcare sector

The general impression amongst South Africans is that corruption is an entrenched practice in national and local governance. South Africans are no longer surprised but are outraged each time funds earmarked for an important cause are misappropriated for personal gain. Misuse of funds during a national health emergency is a pill that is especially hard to swallow.

Herein lies the definition of corruption: the abuse of entrusted power for private gain. The phenomenon of corruption is universal. South Africa’s socio-economic context makes us particularly prone to public sector corruption. In a country with a lack of economic opportunities, access to holders of public office offers an opportunity to emerge from economic hardship.

The size of modern societies implies that citizens are forced to delegate control of public funds to elected officials and their proxies, who then provide with goods and services, including dignified and quality healthcare.  

Misuse of funds during a national health emergency is a pill that is especially hard to swallow.

This divorce between democratic ownership and decision-making power unfortunately allows for the inclusion of private interests during tender processes, which do not always align with the greatest public good. Private interests are often mediated by the flow of false information to funders, or the improper payment of money to individuals who are responsible for ensuring the integrity of the system.

These outflows decrease the total amount of funds available to the healthcare system to procure services for the country. This abrogation of stewardship responsibility results in decreased efficiency, equity and effectiveness of healthcare services. Those who stand to gain from corruption include government officials and private sector entrepreneurs, while healthcare funders, honest suppliers, healthcare workers and patients are the losers, which at its worst, can result in loss of life.

Enablers of healthcare corruption

Although it is perverse to risk adverse healthcare outcomes in pursuit of personal gain, the healthcare sector is particularly prone to such activity. Part of the reason is that healthcare markets are complex and unwieldly systems, with multiple parties procuring a myriad of goods and services. In South Africa, this is accompanied by a lack of standardized and easily accessible protocols and oversight mechanisms.

Unfortunately, the quality of goods and services procured in South Africa is often unknown until they used. Part of the reason for this is that the input of healthcare workers is often excluded during the supply chain decision-making processes, often in the interests of fast procurement and delivery of goods.

South Africa’s public healthcare sector is bedeviled by a lack of separation between party and state. Furthermore, provinces have large, centralized budgets demarcated for curative health service delivery, which often makes it difficult to channel medical resources to where they are most needed.  The private health sector also lacks regulatory controls, which are now being proposed under the National Health Insurance.

During national states of emergency such as the current pandemic, normal tender processes may be set aside to ensure that health products are delivered to where they are required in the shortest possible time. This creates the potential for further lapses in quality control and facilitates informal payments and regulatory failures.

The input of healthcare workers is often excluded during the supply chain processes, often in the interests of fast procurement and delivery of goods.

Cooperation between private and public sector facilities to enable the transfer of patients requiring bed resources has not yet been fully tested and could provide another lucrative tap for the improper flow of funds.

A prescription for healthcare corruption

The annual reports of the Auditor General clearly demonstrate the problem facing the healthcare sector. Since 2005, only the Western Cape Province has been able to achieve unqualified audits consistently, with reconcilable and clear financial statements. Provinces with qualified reports and adverse findings against them have incurred fruitless and wasteful expenditure and a lack of compliance with state law and regulations. Most worryingly, the situation is worsening in many provinces.

South Africa needs legislation to address systemic factors such as decentralizing decision-making processes for healthcare funding. The National Health Service in the United Kingdom circumvents this to an extent by ensuring funds are held at the level of local-area health trusts as opposed to large provinces.

Transparent and well-regulated systems must be built to identify and exclude politically connected individuals and companies from tender processes that could present a conflict of interest.

Whistleblowers need to be encouraged to denounce corruption and be assured of protection by the state. Tender processes should include frontline healthcare workers to ensure the quality control and cost efficiency in the supply chain processes. Above all, existing anti-corruption legislation should be enforced appropriately and consistently, especially at the level of provincial health departments.

Systems must be built to identify and exclude politically connected individuals and companies from tender processes.

Ultimately, bureaucratic and political accountability will be a bulwark against corruption in health and other government sectors. However, until this level of political maturity is reached in South Africa, the people who make use of and work in the public healthcare sector will continue to suffer the consequences of corruption.

In addition to the  loss of life, decreased efficiency, and increased costs, the corrosive nature of corruption eats away at the moral fibre of the country; decimating the morale of honest and hardworking healthcare professionals and officials, and turning an ever-embattled population against its erstwhile leaders.

Rooting out healthcare corruption has become, now more than ever, a national political priority. It is hoped that President Cyril Ramaphosa makes good on his promise to investigate and root out corruption in the appropriation of COVID-19 funding.

* The opinions expressed here by Spotlight.Africa contributors and editors are their own and not official statements of the Society of Jesus in South Africa or of the Catholic Church unless explicitly stated.