A cure-all for pri­vate health­care in SA? The mar­ket in­quiry into the costs as­so­ci­ated with pri­vate health­care in South Africa, which has been ini­ti­ated by the Com­pe­ti­tion Com­mis­sion, should hope­fully lead to lower costs and im­proved ser­vices.

Finweek English Edition - - THE WEEK IN THE NEWS - Ed­i­to­rial@fin­week.co.za

con­sumers who have been bat­tered by their med­i­cal ex­penses, hav­ing to pay for medicines, vis­its to hos­pi­tals and their med­i­cal aid pre­mi­ums – which rise by more than the in­fla­tion rate ev­ery year – can ex­pect dras­tic rec­om­men­da­tions by a mar­ket in­quiry into the pri­vate health sec­tor.

And the share­hold­ers of the three large hospi­tal groups – Net­care, Life Health­care and Medi­clinic – and even fi­nan­cial ser­vices com­pa­nies such as Dis­cov­ery, which get a large chunk of their prof­its from the ad­min­is­tra­tion of med­i­cal aids, should also be in­ter­ested in the find­ings of the mar­ket in­quiry.

Whether the com­pa­nies are mak­ing su­per prof­its in­stead of nor­mal prof­its is part of the in­ves­ti­ga­tion, says Boshoff Steenekamp, head of strate­gic projects at Metropoli­tan Health Risk Man­age­ment.

The in­ves­ti­ga­tion was started by the Com­pe­ti­tion Com­mis­sion to de­ter­mine why health­care costs in­crease by more than the in­fla­tion rate ev­ery year. The mar­ket in­quiry panel, un­der the lead­er­ship of the for­mer Chief Jus­tice Sandile Ngcobo, must de­ter­mine whether com­pe­ti­tion in the mar­ket is dis­torted, limited or pre­vented, and whether th­ese fac­tors have an im­pact on con­sumers’ ac­cess to health­care.

They must then make rec­om­men­da­tions, and the pre­lim­i­nary re­port, to­gether with the rec­om­men­da­tions, must be com­pleted by Au­gust and the fi­nal re­port in Novem­ber.

How­ever, the pro­gramme has now been de­layed af­ter two sets of pub­lic hear­ings, which should have taken place since end March, and has been post­poned.

The mar­ket in­ves­ti­ga­tion has al­ready been de­layed by close on a year.

Steenekamp be­lieves it’s un­likely that the pre­lim­i­nary re­port will be com­pleted by Au­gust as planned. The first se­ries of pub­lic hear­ings started in Fe­bru­ary and lasted to the sec­ond week in March.

By week four of the pub­lic hear­ings it be­came ev­i­dent that a lot was wrong with the pri­vate health­care sec­tor and that much of the blame could also be laid at the door of govern­ment.

Min­is­ter of health, Dr Aaron Mot­soaledi, ad­mit­ted dur­ing the pub­lic hear­ings that it was be­cause of prob­lems ex­pe­ri­enced in the de­part­ment at the turn of the cen­tury that much of the leg­is­la­tion was put on the back­burner. “I must con­fess, there was a decade that the de­part­ment of health in this country was dys­func­tional,” Mot­soaledi said. It was dur­ing the era of Aids de­nial – when Manto Tshabalala-Msi­mang was min­is­ter of health, from 1999 to 2008.

Mot­soaledi be­came min­is­ter of health in 2009 and has since been plas­ter­ing over the cracks caused by this decade’s prob­lems.

The mar­ket in­quiry could have se­ri­ous con­se­quences for hospi­tal groups. In the UK a sim­i­lar in­quiry, among oth­ers, or­dered that cer­tain hospi­tal groups should di­vest from par­tic­u­lar hos­pi­tals in or­der to pro­mote com­pe­ti­tion.

Steenekamp, how­ever, be­lieves it’s un­likely that a sim­i­lar find­ing will be made here as there are other ways of ad­dress­ing the prob­lems faced by the mar­ket. “It’s ex­pected that the rec­om­men­da­tions will be dras­tic and that they will be im­ple­mented over a pe­riod of five years.”

Steenekamp doesn’t think the lo­cal mar­ket in­quiry will come to the same con­clu­sions as the UK mar­ket in­quiry.

“The Bri­tish sit­u­a­tion is very dif­fer­ent, the type of in­surance and its scope is rel­a­tively much smaller than South Africa’s and there are com­pletely dif­fer­ent mar­ket dy­nam­ics.”

The in­ves­ti­ga­tion was started by the Com­pe­ti­tion Com­mis­sion to de­ter­mine why health­care costs in­crease by more than the in­fla­tion rate ev­ery year.

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