Netcare packs its bags

Netcare packs its bags

MASERU – THE end of an era. Or is it the end of an error?
Netcare is packing and leaving Queen ’Mamohato Memorial Hospital today, after a decade of bruising fights with the government.
What was supposed to be a shining example of how cash-strapped governments can partner with the private sector to deliver world-class health services has ended in agony and acrimony. It has been a very expensive experiment for both the government and the country.

The 18-year contract was bleeding the government, taking more than half of the health budget and gobbling up resources that could have been used in other hospitals and clinics.
The government doesn’t deny that Netcare was providing a good service.
Its gripe is with the cost of the service, the punitive charges that came with often delayed payments, Netcare’s handling of labour issues and some alleged transgressions to the contract.

Netcare too might feel aggrieved with the way it all ended. It too is unhappy with how the government handled the contracts. It speaks of unpaid bills and a lack of adherence to the contract.
The cost of losing the contract is huge.
This was a M500 million-a-year contract that had six more years to go. The company was on course to rake in millions from the contract.
It could still extract a pound of flesh when the parties start negotiating what is likely to be an extremely expensive divorce. Some experts have estimated that Netcare and its partners could walk away with as much as M3 billion.

The government is also expecting to pay around that figure but is determined to get it severely trimmed. Either way, the settlement will be a hefty one for Lesotho.
The government doesn’t have some billions parked somewhere. Unless it negotiates terms, it might have to borrow from Peter to pay Paul.
It’s telling that the government believes anything else is better than keeping the contract going.
The immediate challenge for the government is to maintain the standards set by Netcare.
It has very little room for error on that front.

For now, the public perception is against Netcare but it won’t take much for the people to turn against the government. It might be a monumental task to manage the behemoth hospital which, until recently, the government believed requires special expertise to run.
The hospital spokeswoman Thakane Mapeshoane, who starting from today fully works for the government, told thepost last night that Netcare “leaves following a termination of the contracts with the government”.
This comes after the private company fired hundreds of nurses who went on strike over demands for a salary hike and had the backing of the government in their grievances.

Netcare has served their 60-day notice to vacate the premises.
“After receiving the letter, we started changing our Standard Operating Procedures (SOP) policy and just yesterday, we were removing pictures on the walls,” Mapeshoane said.
However, she said Netcare is still expected to pay both July and August salaries.

The Lesotho Nurses Association (LNA) Secretary-General ’Mamonica Mokhesi said they were excited that Netcare was leaving.
“The government fulfilled its promise and we are very happy,” she said.
Mokhesi said it was important for them to prepare for this transition.
“Today we will be engaging with the Health Ministry to discuss the way forward,” she said, adding that they are thankful that the ministry engaged them from the beginning to date.
Mokhesi said they have been suffering for years and they are happy that their advice was considered.
She said the Health Minister Semano Sekatle was their Moses.
She said Netcare has been disrespecting Basotho for years hence terminating their contract was a wise move.

Mokhesi said services rendered by Netcare in the neighbouring country are very good and disappointing to see how they have been treating Basotho.
Meanwhile, the public relations officer of the Ministry of Health ’Mateboho Mosebekoa neither confirmed nor rubbished the allegations.
She said her bosses were still in a meeting with Netcare so she was not sure whether they were really leaving.
“As soon as their meeting ends, we will call a press conference,” she said.

The Netcare Hospital Group, together with its local partner Tšepong (Pty) Ltd, entered into a multimillion-malot contract with the government to build and manage the national referral hospital under the PPP.
The 18-year contract, which the government cancelled as part of solving its dispute with Netcare, was lauded as an example of financing health infrastructure in Africa.

The Lesotho government was heavily relying on South Africa for referral of patients who required special treatment hence the PPP was brought up.
Netcare and Tšepong borrowed about M800 million from the Development Bank of Southern Africa (DBSA) to build the hospital, which was valued at about M1.2 billion.
The government wanted to transform the operation of the facilities, improve the quality of care they provided, and to build capacity in the public health system.

The critics of the deal complained that payments to Netcare were exuberantly increasing and over half of the entire Ministry of Health budget was channelled to it.
The contract showed that Netcare would be paid $32•6 million (about M466.8 million today) index-linked annual unitary charge for up to a maximum of 20 000 in-patient admissions and 310 000 outpatient attendances.
This is about a third of Lesotho’s total hospital demand.
Further, Netcare was paid extra for each additional patient.

’Mapule Motsopa

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