Cost containment strategies and their relationship to quality of care within the South African private healthcare industry

Abstract

The purpose of this research was to understand cost containment strategies used by private hospitals under managed care plans and their relationship to quality of care within the South African environment. The data was collected using a questionnaire consisting of closed questions requesting respondents to rate statements about costs and quality of care, as well as open questions for additional information about costs and quality of care. The study found that managed care has the ability to control costs and that hospitals monitor LOS and prescribe generic medication in order to control costs. The study also found that cost control strategies have a negative impact on quality of care and that hospitals place more emphasis on cost control than quality of care. In addition, large hospitals that enjoy high occupancy rates experienced an increase in patient complaints since the introduction of managed care, compared to small and medium hospitals. The study found that managed care has had a better than average impact on controlling costs and a better than average impact in quality reduction, however the correlation between cost control and quality reduction was negative. Finally, the study found that technology has an impact on rising healthcare costs and that any constraints placed on rising costs associated with technology will have a negative impact on quality of care. Copyright