The Competition Commission has placed the ever-increasing cost of South Africa’s private health-care industry in its crosshairs.
|||Durban - The Competition Commission has placed the ever-increasing cost of South Africa’s private health-care industry in its crosshairs.
Trudi Makhaya, advocacy and stakeholder relations manager at the Competition Commission, said yesterday that the commission would undertake a market inquiry into the private health-care sector within three months that would probe pricing, costs and the state of competition and innovation in private health care.
“The health-care market does not seem to be working properly and prices don’t seem to be coming down and costs seem to be increasing,” Makhaya said.
“Part of it has to do with some of our past decisions.
“In terms of cartels, in 2003 we stopped collective bargaining in the industry where the hospitals, the funders and the specialists would get together and determine prices, essentially fixing prices for themselves for their own benefit. It was seen as a private cartel getting together for their own benefit without regulation. But when that ended… prices did not come down,” she said.
The high cost of South Africa’s private health care has also been on the radar of Health Minister Aaron Motsoaledi who has lamented its “destructive, unsustainable practices”.
Motsoaledi has vowed to regulate the industry, saying the issue of the pricing of health care is a “big concern”.
Makhaya said that private health care had become a “free-for-all”.
She agreed with the Health Department’s plan to regulate the industry.
“When the collective bargaining stopped, the expectation was that the government would come and regulate. They did try, but there were many legal challenges and we once again find ourselves in a situation where it is a free-for-all and doctors can charge anything they want and patients don’t have the information to bargain properly and medical aids don’t seem to have the power to do anything,” Makhaya said.
“We need to understand what the best way to regulate this market is, because even across the world, health care is regulated,” she said.
Makhaya said another problem was that smaller hospital groups were often swallowed up by their bigger rivals and while they had challenged some of the mergers they had been unsuccessful.
“You will find an independent group coming up that may be innovative and even cheaper, but they end up getting swallowed up by the big firms and when they do get swallowed up they have to charge what the bigger firm is charging.
“We need to understand what the drivers of cost are.
“Among the requests to them would be for them to show us what the cost elements are on their income statements. Is it that they are seeing more sick patients, are they paying more for supplies and nurses, or is it simply profit?” she said.
The Competition Commission has launched probes into various industries over the years including the bread industry, which was fined R195 million for operating a price-fixing cartel, the cement industry, and, more recently, the building industry.
Melanie da Costa, director of strategy and health policy at the Netcare hospital group, said the group welcomed the commission’s inquiry.
“Netcare is aware of the Competition Commission’s intention to review the health-care market. We see such an inquiry as a transparent process affording an opportunity for the facts to be conveyed with a view to a more informed debate on health-care access and delivery in South Africa.
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