Mediclinic disagrees with inquiry over competition

Private hospital group Mediclinic has taken issue with the health market inquiry’s concerns about market concentration in the sector and its call for submissions on possible divestiture and a moratorium on issuing new licences.

“Mediclinic does not agree with these findings ... [and] does not believe the proposed remedies are appropriate,” it said in a statement issued on Monday.

The inquiry was launched by the Competition Commission four-and-a-half years ago to investigate the barriers to effective competition in the private healthcare market.

It released its preliminary report on July 5.

Mediclinic said it believed there was robust competition between the four big players: the National Hospital Network and the three JSE-listed hospital groups Netcare, Life Healthcare and Mediclinic.

“Hospital groups are able to leverage on economies of scale, enabling the provision of highquality, cost-efficient care to the benefit of the patient,” it said.

Mediclinic agreed with the inquiry’s finding that healthcare expenditure was rising faster than consumer price inflation due to an increase in utilisation, but disputed its view that supplier-induced demand played a significant role in driving this trend. “Mediclinic’s economic and actuarial experts do not support the accuracy of the calculations and data underpinning these findings,” it said.

Increased utilisation was due to other factors, such as the increasing burden of disease, an ageing population and new technology, it said.

Supplier-induced demand refers to a phenomenon in which increased access prompts additional use of a service that would not have otherwise occurred. In the case of hospitals, this could mean increased bed numbers trigger a surge in hospital admissions.

Mediclinic said it supported the inquiry’s recommendation that bilateral tariff negotiations be maintained between medical schemes and hospital groups.

In a separate development, the health market inquiry said on Tuesday that it had received numerous requests for access to the underlying data considered in preparing its report and it would open its data access room to stakeholders during August.