Justice system closes on in health sector corruption

President Cyril Ramaphosa has launched the Health Sector Anti-Corruption Forum under whose auspices government and civil society organisations will collaborate in preventing, detecting and prosecuting fraud and corruption in the health sector.

The forum was launched yesterday, Tuesday 01 October 2019, in a meeting at the Union Buildings in Pretoria where forum partners signed terms of agreement that will guide the forum under the chairship of the Special Investigating Unit.

Parties to the agreement are the Council for Medical Schemes, the Directorate for Priority Crime Investigation, the Health Funders Association, the  Health Professions Council of South Africa, Corruption Watch, Section 27 and the Health Funders Association.

The forum is an outcome of the first Presidential health Summit which was held in October 2018 to examine concerns facing the health care system.

The Summit identified corruption as a challenge that undermined health care in the public and private sectors and took the form of, among other manifestations, fraudulent claims, pharmaceutical companies inflating prices and over-billing by service providers.

The Council for Medical Schemes estimates that the total cost of fraud in the South African private health care system amounts to around R22 billion a year.

At yesterday’s launch, partners received reports on progress being made in fraud and corruption investigations into the health sector.

The Special Investigating Unit is continuing its investigations into collusion between persons suing government hospitals for malpractice and certain state attorneys who either settle cases that have no merit, or deliberately lose cases.

Deputy Minister of Justice and Constitutional Development reported to the forum that work done by the Special Investigating Unit had already led to, among others, the arrest of an attorney in the Eastern Cape relating to fraudulent medico-legal claims estimated to total more than R100 million.

The SIU has successfully stopped a further R39 million payments to this attorney who is out on bail and identified another 13 matters to the value of R53 million in Gauteng relating to the same attorney.

Adv Andy Mothibi, Head of the Special Investigating Unit, reported that fraud, waste and abuse in health care totalled R39 billion a year with risk arising in supply chain processes, including medical products, pharmaceuticals and medical equipment.

Over-servicing and duplication in the provision of medical services also rendered health care vulnerable to fraud, corruption and waste.

Adv Mothibi said the SIU was investigating procurement and purchasing process irregularities, registration and accreditation irregularities, collusion, medico-legal fraudulent claims, over-servicing, over-pricing of services and products, and instances where health care workers or professionals in the public sector had not obtained permission to perform remunerative work in the private sector.

The SIU has adopted a focus on data analytics that will help with risk analysis and the prevention of fraud and corruption in entities or sub-sectors under investigation.

Adv Shamila Batohi, National Director of Public Prosecutions, highlighted a range of investigations underway by the Directorate the Directorate of Priority Crime Investigation (the Hawks). Prosecution in these matters will be prioritised by the National Prosecuting Authority in terms of a memorandum of understanding between the NPA and the SIU which serves as chair of the Health Sector Anti-Corruption Forum.

The investigations involve the departments of health in KwaZulu-Natal, the Northern Cape, Free State, North West, Gauteng and Limpopo.

Adv Batohi said the NPA would use an additional budget allocation to recruit prosecutors in the Specialised Commercial Crimes Unit and to build capacity in the Asset Forfeiture Unit.

The President welcomed the Forum as a means to end the “stench of corruption” in the health sector.


Media enquiries:  Khusela Diko, Spokesperson to the President – 072 854 5707

Issued by: The Presidency
Pretoria