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Why the public-private partnership to build Lesotho’s only specialist hospital floundered

It was hailed as a revolution in private investment in healthcare in Africa but almost a decade after it was opened, Lesotho’s only specialist hospital takes up almost a third of the country’s entire health budget. Now, we may finally know why.

12 May 2020 by Pascalinah Kabi 

The once-heralded public-private hospital in Lesotho is the country’s only specialist facility. The catch? It takes up about 30% of the health budget. CreditThabelo Monamane, Lesotho Times

A hot, sticky liquid is slowly spreading across one-year-old Tebello Temekoane’s face. 

He is in dreamland. It’s August 2018.

Just a few steps from his mattress in his home in Butha-Buthe, Lesotho, Tebello’s grandmother, ‘Mamaki, has just woken up.  

She lights a candle; the dim light slowly reveals a scene from a horror movie. 

Tebello’s pillow is soaked in blood. 

His grandmother panics, calls his parents and bundles the boy into a minibus taxi and headed to the Maluti Adventist Hospital in Berea, about one hour away. 

World Bank gives the project the thumb’s up

It was still morning but already, the summer sun was scorching. Hundreds of Basotho were gathered in Lesotho’s capital, Maseru, to mark the opening of the country’s first specialist hospital. It’s the year 2011. 

The lines of the hospital’s long beige and brown stone facade almost mimicked the rocky Maloti Mountains foothills rising in the distance. And on its face, big blue lettering was the hospital’s new name: Queen ‘Mamohato Memorial.

In a smaller font, just underneath the sign, it read: “Managed by the Tšepong Consortium”.

On a small stage in front of the building, sat dignitaries, including head of state King Letsie III. Then Minister of Health and Social Welfare Mphu Ramatlapeng stepped forward to address a Lesotho morning television crew.  

Beaming with excitement, she stared straight into the camera. This new hospital, she said, is a new dawn for Basotho. 

In 2008, the government had signed a billion-rand contract to build and manage the 425-bed hospital with Tšepong (Pty) Limited — a company comprised of South African hospital giant Netcare and largely local partners. As part of the public-private partnership, Tšepong would also build an additional clinic and refurbish three others. 

Government put up almost R840-million for the project. The Development Bank of Southern Africa loaned Tšepong (Pty) Limited another R1.4-million, according to a 2013 report by the United States-based University of California San Francisco. 

The hospital, Ramatlapeng promised colleagues in a 2007 presentation, would attract specialists and private sector expertise to improve the quality of healthcare services — and all for what she said was a “predictable” cost. And after all, the country had received expert advice on the deal not just from academics but the World Bank’s International Finance Corporation (IFC), which encourages private-sector development in the Global South.  

At the end of one of the slides she presented to colleagues that day in 2007, lay a single bolded sentence: 

“IFC main advisor on this public-private partnership.”

‘The tests came back. My son had cancer.’

Back at the Maluti Adventist Hospital in Mapoteng, Tebello’s prognosis is grim. He’s too sick to be treated at the district hospital, say doctors. He’ll need specialist care.

Two hours later, an ambulance carrying Tebello and his mother ‘Matebello, arrives at the Queen ‘Mamohato Memorial Hospital in Maseru. Paramedics rush him straight into one of the hospital’s beds.

The facility provides the highest level of care in the country and almost half of the country’s specialists work within its halls. Of all the questions running through ‘Matebello’s mind, how to pay for today’s visit is, thankfully, not one of them. Medical care in Lesotho is heavily subsidised by the state.

But doctors didn’t immediately move to stop the flow of blood still trickling from Tebello’s nose, ‘Matebello explains. She’s sitting in her tuck shop, from where she sells groceries to villagers in Leribe, about two hours’ drive from Maseru. “They were eager to see how much and how fast the blood was coming. Then, they set about trying to figure out why it’s happening.”

Later that day, she had an answer.

“The tests came back,” ‘Matebello says. “My son had cancer.”

Today, the Queen ‘Mamohato Memorial Hospital takes up almost 30% of Lesotho’s health budget, according to confidential Tšepong company records seen by Bhekisisa / Lesotho Times. In other words, about R699-million of the country’s R2.5-billion health budget went to the specialist hospital and linked clinics in 2018/19 — but even then, it still can’t treat everyone, including cancer patients.

And the public-private partnership once set to revolutionize investment into healthcare in Africa may have outstripped the country’s ability to manage it, leaving it vulnerable to spiralling costs and infighting — with Lesotho’s health system left to pick up the tab.

When ‘Matebello’s son was diagnosed in 2018 with a form of aggressive cancer called acute myeloid leukaemia, they had to seek care in South Africa. The condition affects the blood and bone marrow, explains the US research organisation the Mayo Clinic on its website. Forms of leukaemia account for almost two out of every 10 cases of childhood cancer reported in Lesotho between 1986 to 2010, according to a 2015 study published by Journal of Tropical Pediatrics.

Seven days after the diagnosis, ‘Matebello acquired a passport for Tebello and prepared to make the trip to Netcare’s Universitas Hospital in Bloemfontein for at least eight weeks of treatment.

“Based on others’ experiences, I knew that being transferred to Bloemfontein meant he was critical,” ‘Matebello says, “[and] that I may come back alone, with him dead.”

Two days later, Tebello was being prepped for surgery in the Free State facility.

The tiny toddler was wheeled into theatre and given anaesthesia before doctors made two small incisions into his chest. Next, they inserted a long, flexible tube just underneath his chest through which they administered chemotherapy or other medications.

‘Matebello remembers: “Seeing that hole made me cry. I cried every day.”

Project price tags spiral

In 2007, the Lesotho government advertised the tender for a R500-million project to construct the Queen ‘Mamohato Memorial Hospital. But the project advertised was very different to the one eventually implemented, argues Mark Hellowell, director of University of Edinburgh’s global health policy unit in a 2019 paper published in the BMJ Global Health journal.

By the time the government unveiled a financial model for the final project, the price tag had more than doubled, ballooning to R1.165-billion.

The Tśepong consortium’s fee also dramatically increased during final negotiations, rising from R180-million to R255-million, according to Hellowell and international charity Oxfam.
Oxfam Public Service Policy Manager Anna Marriott says that the scale of changes made “in the absence of competition during the final stages of contract negotiation would be considered unlawful in many other markets and certainly fails the World Bank’s own recommended best practice.”

Oxfam has called on the World Bank’s International Finance Corporation, which advised the government on the deal, to “take responsibility for many of the serious flaws in the structure of the public-private partnership contract”. World Bank representative Omer Ramses Zang Zidjou says the international organisation has been assisting the government since 2018 to address challenges.

Meanwhile, the Lesotho government can’t keep up with payments to Tśepong and Netcare says government owes the consortium R700-million. In December 2019, the South African hospital group unsuccessfully approached the Lesotho High Court to put the consortium — plagued by in-fighting — under court-appointed management.

The Lesotho Minister of Health Nkaku Kabi had not responded to requests for comment by the time of going to print.

And every time the government can’t pay Tśepong on time, the consortium charges it interest, adding to ever-spiralling costs, Hellowell says. Even when the consortium defaults on its own debts, the penalties too are passed onto the government in higher invoices.

Repayments on Tśepong’s loan from the Development Bank of Southern Africa are also billed to government.

Patients must still travel to South Africa for care

On the 28th of January this year, Tebello strutted around at the old Queen Elizabeth II Hospital grounds trying to get the attention of his mother.

The duo had just completed a two and half hour journey from Leribe. From here they would leave for Universitas Hospital — a trip that was scheduled to leave at 6am.

They were not alone — several other patients were joining them in the queue to travel to various Free State hospitals.

A chilly morning breeze cut sharply into their skin.

But the 22-seater sprinter-turned-patient-transport is more than an hour late.

When the transport finally crosses the border, Tebello is fast asleep on his mother’s lap.

In 2009, then Minister of Health and Social Welfare Mphu Ramatlapeng was hopeful that the Queen ‘Mamohato hospital would curb expensive patient traffic to South Africa, she told Engineering News.

And for some patients, such as those needing orthopaedic surgeries, it did, explains Netcare general manager Christoffel Smith.

But the specialist hospital was never supposed to offer cancer treatment. Instead, says Kabi, it was only supposed to transfer those patients to Netcare and state hospitals in Bloemfontein. (The dearth of cancer care in the country is also complicated by the fact that until the country passed the Radiation Protection Agency Bill of 2018, it lacked the legislation to build a radiation oncology centre.)

Now, Kabi accuses the consortium of billing the government for the transfer of other types of patients whose care is supposed to be covered by the 2008 deal.

“Some of the specialised care covered by the contract is not offered at the hospital because of lack of expertise. Tśepong is supposed to pay for those transfers and should not bill us,” Kabi says.

Smiths denies the allegations, saying the government of Lesotho has not been billed for any patients referred to Bloemfontein by Netcare for treatment.

But in 2018, the Free State health department reported that the Lesotho government paid R31.2-million for treatment of Basotho patients in that province.

‘I am not going to cry’

“I am not going to cry,” Tebello says as a nurse at the Bloemfontein facility calls out his name.

A few minutes later, he emerges from the room with a white patch on his wrist

The doctor is happy with his progress — so much so, that they’ve taken him off medication.

But he’s not entirely out of the woods.

Tebello’s bone marrow biopsy had weakened his spinal cord. This means it is prone to injuries.

He knows he must always be careful when playing.

“It (spinal cord) will get hurt,” Tebello explains, pointing to a scar on his lower back.

But as a boy child, he enjoys rough games.

The pitfalls and promises of PPPs

Former Lesotho Health Minister ‘Molotsi Monyamane says the Lesotho government also owes South Africa millions for Basotho patients treated in the Free State.

In practice, he says that “Netcare was given a monopoly to transfer patients to [the Netcare hospital in] Bloemfontein without the ministry’s verification”.

Netcare has denied the allegations.

But Monyamane’s observation about oversight strikes at the core of what went wrong with Lesotho’s Queen ‘Mamohato Memorial Hospital public-private partnership: The country never had the capacity to negotiate or manage the contract, agree Marriott, Hellowell and former health ministry officials quoted in a 2015 The Lancet article.

As of 2015, only two full-time ministry of health employees managed all outsourced contracts — those contracts accounted for more than half the total health budget that year, Hellowell says.

Without oversight, the country was unable to utilise performance-based clauses in the contract that would have allowed it to, for instance, impose penalties where services fell short. This made it difficult to figure out if Lesotho was getting value for money with the contract even as the costs of Queen ‘Mamohato Memorial Hospital spiralled.

There was, however, one saving grace. The Lesotho government may not have been able to monitor the contract well enough to use money to incentivise better services at the hospital, but, the contract with Tśepong, says Hellowell, did include an interesting backup measure.

The agreement requires that the consortium ensures the hospital is accredited by the Council for Health Service Accreditation of Southern Africa. The organisation is the only internationally recognised healthcare facility accreditation body in sub-Saharan Africa. According to Hellowell’s research, in 2013 the Queen ‘Mamohato Memorial Hospital became the first public sector hospital in sub-Saharan Africa to obtain this accreditation outside South Africa.

But this too had unintended consequences, retired head of planning at the Lesotho Ministry of Health Majoel Makhakhe tells The Lancet in 2015. Government, she says, didn’t anticipate how many patients would seek out what they perceived as better care at the new hospital, bypassing clinics altogether. The more patients came, the more government was beholden to top-up payments stipulated in its contract with Tśepong.

In hindsight, she says, the IFC might have advised them to strengthen primary healthcare before building the new hospital.

Back in Leribe, ‘Matebello has just given Tebello an apple. He takes a bite and climbs onto his mother’s lap. “My son is healed, but if there were nearby cancer centres, many children wouldn’t die of cancer. Some parents flatly refuse to let their children go when they’re referred to Bloemfontein.”

Tebello jumps off his mother’s and takes off his T-shirt in the heat. It reveals the operation scars on his chest.

His mother looks at him, shakes her head, and says: “We deserve better healthcare in this country.”

Kabi is an IJHUB fellow and this story was produced in partnership with the Lesotho Times. This story was produced and first published by Bhekisisa Centre for Health Journalism.

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