The NHN was established as a response to the competition imbalance between the independent private hospital market on the one hand, and the 3 (three) large hospital groups on the other. Historically privileged entrepreneurs joined hands with their historically disadvantaged black counterparts and formed the NHN as a public company in 1996, when most of the discriminatory laws which were used to exclude a large majority of the black population from participating in the economy of the country were still in place.

In fact, the founding members emerged during a period marked by the economic exclusion and exploitation of black people, most of whom were relegated to abject poverty. Most commercial banks and financial institutions implemented fragmented, racially based business- support policies and programmes which had a particular impact on most businesses at the time – most of which were the majority of small and medium micro enterprises owned and controlled by historically disadvantaged persons which were subjected to financial and commercial secrecy which epitomised the apartheid state.

Coincidentally, the formation of the NHN coincided with the adoption of the final Constitution of South Africa in 1996. The aim of the NHN was for independent private hospitals to coordinate efforts at opening up the private hospital economy to previously excluded groups in order to mitigate the high concentration which was embedded in the big 3 (three) hospital groups for the longest time.

At the time of its formation in 1996, a majority of the independent private healthcare members of the NHN could not effectively and individually compete against the 3 (three) large hospital groups which, by then, had already established and positioned themselves to provide services in a multitude of healthcare disciplines. One of the advantages enjoyed by all the 3 (three) big hospital groups is the greater national geographical footprint, especially acute hospital beds which the NHN does not enjoy.

Despite that the Competition Act had not been promulgated at the time, the winds of change had signalled the dawn of a competition regime which would foster economic inclusion. As if prophetic, the NHN entrenched economic inclusion as one of its primary objectives in its Memorandum of Incorporation (‘NHN MOI’). This objective is one of the pillars of the Competition Act which was promulgated 2 (two) years later in 1998.

More than a decade later in 2007 the NHN was incorporated as a non-profit company and, since then, its flagship has been to serve as a competitive counterbalance to the 3 (three) large hospital groups which by then had long solidified their market strength. What is more, the NHN also promotes the interests of its members, markets their services and provides a base for benchmarking, which not only assists NHN members to increase efficiencies but – as importantly – attempts to ensure the quality of service that medical schemes and administrators require from service providers.

The nature of the services provided to NHN members have been made possible by the exemption and include, but are not limited to:

• High-level industry feedback on important and current affairs which gives NHN members insight into industry trends and economic factors which may affect the operation of their hospitals. For example, the NHN managed to facilitate all communication and negotiations between the National Department of Health; the various Provincial Departments of Health; and the private sector co-ordinating committee (B4SA) during the COVID-19 pandemic. This also included co-ordination of the vaccine roll-out to all NHN hospital staff, amounting to over 30 000 people.
• Detailed feedback on ARM arrangements concluded with the medical schemes, and the constitution of these ARMs as to enable facilities to better manage the costs of procedures and to perform procedures profitably.
• Detailed feedback on the tools available to NHN members to assist them in managing their facilities optimally. For example, the Medikredit portal through which it is compulsory for all members to switch their claims provides a platform for data mining on all facilities under the NHN so as to monitor and report on metrics such as admission volumes and revenue, including computation of cost effectiveness metrics through NHN actuaries, the output data of which allows the NHN to negotiate effectively with medical schemes based on the performance of NHN facilities in key cost areas.
• Detailed reports and feedback on cost-efficiency and quality measures in NHN facilities along with recommendations on how to improve such metrics.
• Operational meetings held with medical schemes and/or administrators in which problem areas and/or trends are identified and discussed and approaches to resolve any issues are concluded.
• Regular workshops hosted by the NHN.
• Information manuals provided to the NHN facilities.
• On-site training sessions held at NHN member facilities.
• Newsletters/communiques produced by the NHN for NHN member facilities.
• E-mail and telephonic support which is available to NHN facilities and their staff members.
• The NHN Billing Guide which provides a uniform methodology to NHN members on the management of billing procedures and guidelines.