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How do you stop a hospital heist? Appoint a plunder-proof board

- Adjunct Professor Alex van den Heever

Theft-proof hospital boards must be set up to hire and fire the heads of hospitals, and to hold them accountable.

  • The way South Africa’s health sector is governed leaves hospitals exposed to corruption. Hospital chief executive officers (CEOs) are political appointments, and so are the people at the accountability bodies, such as the Office of Health Standards Compliance, that are set up to hold the executives responsible. 
  • CEOs are responsible for making sure the hospital is financially sustainable and to make sure it delivers good quality care to the community. But this won’t happen as long as the wrong people are chosen for the job. 

If you park a car in Hillbrow, leave the doors open and the key in the ignition, it’ll be stolen in no time. 

There’s nothing shocking about that, it’s the natural outcome in an area with such a high crime rate

Similarly, nobody should be surprised when the country’s state hospitals fall prey to corruption.

We’ve left them exposed to a badly designed governance structure for nearly 30 years.  

Chief executive officers (CEOs) at hospitals are chosen by the member of the executive council (MEC) for health in their province. 

This lets politicians deploy cabals that are in control of human resources, procurement and licensing for facilities. CEOs control some of the decisions about which equipment and medicines should be bought, but the provincial health department often has the final say when it comes to approving payments.  

Once they get the job, the CEO is in charge of buying equipment, hiring and firing staff, making sure the facility operates in a sustainable way, and providing good quality care. 

But that won’t happen as long as the wrong people are chosen for these positions — whether they’re unfit because they’re unqualified, or because they’re dishonest. 

If anything goes wrong, it’s only the head of department (HOD), who is invariably a political appointment as well, that can remove a CEO. This governance configuration ensures that honest and hardworking staff are insecure and more likely to face removal, while the corrupt are protected from the consequences of their misconduct. 

The showdown between doctors, the community, and the CEO at the rural Eastern Cape Zithulele District Hospital, is one example of what can happen when systems go wrong.

The hospital’s CEO Nolubabalo Fatyela (appointed in 2021) ordered the facility to turn patients away if they don’t have a referral letter from a primary healthcare facility, the Daily Maverick reports. 

Even though that’s how the public health system is supposed to work in theory, the move upended a years-long commitment by Zithulele staff not to refuse anyone care, since people often have to travel from far-flung areas to get to the hospital for help as so many clinics in the province are dysfunctional.

The Eastern Cape health department backed Fatyela even as rubber bullets hailed down on people outside the hospital who were protesting the changes. The embattled CEO was only transferred in late July along with clinical manager Ben Gaunt, who ran an HIV nonprofit based at the facility (the Jabulani Rural Health Foundation) before Fatyela closed it down. 

Treatment policies at the hospital could still be reversed, but the community’s trust will be much harder to win back, and the conflict has already resulted in a drop in the number of outpatients treated there

This is a tragedy that will repeat at other facilities if South Africa doesn’t change the way hospitals are run: they need theft-proof boards to hire and supervise CEOs instead.  

“Theft-proof boards” may read like an oxymoron, but there are ways to do it. For starters, here’s why the current system isn’t working. 

Firstly, patronage systems run far too deep for any amount of cash to fix the health system.

The health sector is haemorrhaging money. 

The Gauteng health department, for example, has a serious illegal spending habit. 

The department racked up R3.8-billion in irregular expenditure in 2020/21, which is more than double the amount from the previous year. 

Irregular expenditure is a category that describes spending that flouts South Africa’s legal supply chain processes, and it’s used as an indicator of corruption. 

By way of comparison, the Western Cape department of health only had R82-million in irregular expenditure for the entire period from 2016/17 to 2020/21. 

Over the same period the Gauteng department spent R11.7-billion illegally. 

That means there’s either no capacity to fix this, or no wish to do so — and definitely no fear of the consequences. 

If more funding won’t help, it means that we need to overhaul the governance framework that influences the selection of leaders in the system. 

That’s the second issue: currently, politicians decide who fills the top hospital jobs while they also determine who heads up supervisory bodies such as the Office of Health Standards Compliance and other regulators, which have been established to protect the public from misgovernment. 

Unfortunately, this approach has exposed all parts of the health sector to the perverse dynamics associated with patronage politics. Political “leaders” get selected through the exercise of patronage derived from the theft of resources from the state. 

So it doesn’t matter how many checks and balances there are in place to prevent corruption, theft of health sector funds is inescapable — as is a drop in the quality of care patients get. 

At one tertiary hospital, for instance, the contract for hospital beds was awarded to a company that was offering bad quality products at double the price of its competitors, a clinical director told researchers for a study published in the journal, Health Policy and Planning, in 2016. 

One of the beds broke while a patient was undergoing a caesarean section, and she cracked her skull. 

The systemic underperformance in South Africa’s public health system shows that such incidents are a daily occurance, with terrible consequences for everyone dependent on the public health system. 

Who should choose the leaders?

It is possible to set up a trustworthy board in a “low-trust society” like South Africa where people have very little faith in the government and each other.

The way hospital boards are currently structured is, however, not the answer. Provinces already have the power to write the laws that would govern such bodies in a meaningful way, but they’ve done very little with it. 

Provincial laws still permit hospital CEOs and other key personnel to be political appointments and the ineffectual boards don’t have any powers, other than a mandate to act as a link between the hospital staff and the community.  

The Gauteng health department started to recruit board members to oversee state hospitals in 2017, but the project hasn’t worked. Four years on, only a third of the 277 state hospitals in the province had a functioning board, according to the provincial department’s 2020/2021 annual report.  

The posts that were filled were abandoned for that year anyway as a result of COVID-19 lockdowns. None of the hospital boards in the province were active, because members are volunteers, and they weren’t designated as “essential workers” during the stricter levels of lockdown. 

But there are ways to correct the problem. 

For starters, laws must be drawn up to give an independent supervisory board the power to appoint, remove and supervise hospital CEOs. 

People should only be considered for a board position once they’re deemed “fit-and-proper” and equipped to supervise a complex organisation such as a hospital. 

Having a postgraduate degree and appropriate work experience would be essential to ensure that they have sufficient expert professional knowledge and critical thinking skills to carry out their duties.

Some red flags should immediately disqualify candidates. For example, if they were on a board of a company within two years of it going bankrupt, been charged or convicted of a crime and having been dismissed from any position for dishonesty.

Once people are appointed to the board, there shouldn’t be any chance for them to skirt their responsibilities. Improper behaviour should also result in someone being investigated or sacked, say, if they don’t recuse themselves from matters in which they have a conflict of interest. 

Who should be appointed?

The team that appoints people needs to make sure there’s a good mix of skills on the board, including expertise in medicine, management and business. 

Board members can’t have any conflicts with the hospital they’re overseeing. That means no doctors, nurses, or union representatives from the facility should be allowed to serve on hospital boards. 

These groups should serve on consulting teams but they shouldn’t hold the reins.

Where will the hospital boards fit into South Africa’s existing health structures?

South Africa’s health system is divided into 52 districts, each with its own health council.

This structure is supposed to oversee the services in the area and relay that information to the provincial health council. They are purely advisory with little real influence on events. Such councils are also made up of political appointees. 

The provincial health councils can draw on information from these councils to shape aspects of that district’s health system including the budget, treatment targets and staffing drives. In practice, however, they add very little value to strategies and plans. 

Plus, these councils are too far away from individual facilities to decide which services they should provide and how they should do it. 

Instead, their role should be to determine wider strategies. The province could, for example, say that new HIV infections must come down. The hospital board would then negotiate for the funding, equipment and staff to make sure they can roll out the right prevention medicines and educational projects to reach that goal. 

In Australia, provincial offices have five-year agreements with hospitals which specify what they want facilities to achieve. That way, facilities become the independent delivery arm of the strategy that is drawn up at the provincial and district level — and hospitals boards, and CEOs, are held accountable.

Each province (called a state in Australia) also has a five-year contract with the national government that sets out the targets for the state.  Each province will look a bit different depending on the specific health issues they have to solve.

So the system would look more or less like this: the CEO has a contract with the board, and the board has a contract with the province. The province, in turn, has an agreement with the national health department. 

Who will fill all the oversight boards?

There’s more than enough expertise in South Africa to equip the country with good quality boards for most public hospitals.  

The country’s network of school governing bodies is proof that people want to be involved in the governance of public institutions, such as schools and health facilities, that have a direct impact on the quality of their lives.

School governing bodies consist of parents, teachers and community members and the bodies have the power to, for instance, determine a school’s policy on language and religion. Some also manage school finances. 

In areas with less expertise, one hospital board could supervise the CEOs in a number of health districts and hospitals. 

But the main goal must be this: to break the link between political officials and the leaders responsible for the delivery of health services to citizens. The structures of accountability must be brought closer to the served population. 

None of what I’ve explained here is new: these exact policy changes were proposed back in 1996 already as part of the Hospital Strategy Project, a report that the national health department commissioned in order to improve the country’s state health services at the end of apartheid. 

In 2002, the Commission of Inquiry into a Comprehensive System of Social Security for South Africa, recommended this type of hospital governance — again. 

But by then, the patronage systems were already in place, and there was no reason for politicians to change anything. 

As a consequence, the National Health Act of 2003 wrote the patronage model into law, and established corruption and performance failures as an everyday part of the health sector. 

It’s still possible to change the way the health system is governed. In fact, it’s something I believe South Africa can achieve fairly soon, even within a period of five years. 

But without any real commitment from the government, the burden falls on community members to ask more of their local governments. 

In the end, policy change is not only up to individual politicians; public discussion and intellectual inputs count too. Citizens can and must demand that a commitment to a redesigned health service becomes a prerequisite for any politician to gain or keep power. 

The alternative is failure.

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