In­quiry into pri­vate health­care will rec­om­mend reg­u­lated tar­iffs ‘if nec­es­sary’

Weekend Argus (Saturday Edition) - - GOODPOSTER -

The Act­ing Com­pe­ti­tion Com­mis­sioner does not want to say whether an in­quiry into the pri­vate health­care sec­tor will rec­om­mend that med­i­cal tar­iffs be reg­u­lated, but he says the in­quiry is free to make any rec­om­men­da­tion it deems fit based on the ev­i­dence be­fore it.

Tem­binkosi Bon­akele, the act­ing com­mis­sioner who ad­dressed the an­nual con­fer­ence of the Hos­pi­tal As­so­ci­a­tion of South Africa (Hasa) in Cape Town this week, was re­spond­ing to a pre­sen­ta­tion sug­gest­ing that the Com­pe­ti­tion Com­mis­sion should be wary of be­com­ing em­broiled in mak­ing rec­om­men­da­tions to reg­u­late prices. The in­quiry’s terms of ref­er­ence in­clude mak­ing rec­om­men­da­tions aimed at mak­ing high­qual­ity health­care ac­ces­si­ble and af­ford­able.

At the Hasa con­fer­ence, An­thony Norton, di­rec­tor at law firm Nor­tons Inc, said the com­mis­sion should shy away from mak­ing rec­om­men­da­tions about reg­u­lat­ing prices, be­cause such reg­u­la­tions could have un­in­tended con­se­quences.

The Com­pe­ti­tion Com­mis­sion should be seen to be im­par­tial and should main­tain its in­sti­tu­tional in­de­pen­dence, he says.

Price reg­u­la­tion is gen­er­ally the re­spon­si­bil­ity of spe­cific en­ti­ties such as the Na­tional En­ergy Reg­u­la­tor of South Africa or the In­de­pen­dent Com­mu­ni­ca­tions Au­thor­ity of South Africa, Norton says.

Bon­akele told the con­fer­ence that the aim of the in­quiry is to un­der­stand the forces that pre­vent, dis­tort or re­strict com­pe­ti­tion in the pri­vate health­care sec­tor, and how th­ese forces af­fect you, the health­care con­sumer.

The ex­tent of com­pe­ti­tion and the way in which it works in the pri­vate health­care sec­tor are un­clear, and the com­mis­sion wants to un­der­stand how fac­tors – such as the im­bal­ance of in­for­ma­tion be­tween health­care providers and con­sumers, and re­la­tion­ships be­tween con­sumers and in­ter­me­di­aries, in­clud­ing bro­kers and cer­tain providers – dis­tort or re­strict com­pe­ti­tion, Bon­akele says.

Min­is­ter of Health Dr Aaron Mot­soaledi asked the Com­pe­ti­tion Com­mis­sioner ear­lier this year to con­duct the in­quiry.

Mot­soaledi told the con­fer­ence that he does not, as is ru­moured, have a se­cret agenda, and the in­ten­tion of the in­quiry is not to de­stroy the pri­vate health­care sec­tor.

The in­ten­tion is to im­prove the pub­lic and the pri­vate health­care sec­tors so that both sec­tors will able to pro­vide ev­ery­one with qual­ity and af­ford­able health care, he says.

Bon­akele told the con­fer­ence that in­for­ma­tion pub­lished by the Coun­cil for Med­i­cal Schemes on the amounts that med­i­cal schemes pay to providers shows a huge in­crease in the cost of pri­vate hos­pi­tals and spe­cial­ists since 2000. This in­crease is out of pro­por­tion to the cost in­creases in other sub-sec­tors, he says.

The act­ing com­mis­sioner says he is aware that the source of this in­for­ma­tion has been con­tested, but the in­for­ma­tion is in the pub­lic do­main and peo­ple are ask­ing ques­tions about the es­ca­la­tion in the cost of pri­vate hos­pi­tals and spe­cial­ists. The com­mis­sion ex­pects the in­quiry to ad­dress th­ese ques­tions, he says.

Bon­akele told the con­fer­ence that there has been much crit­i­cism of the Com­pe­ti­tion Com­mis­sion’s de­ci­sion in 2003 that the an­nual ne­go­ti­a­tions be­tween med­i­cal schemes and health­care providers on the tar­iffs that providers would charge for their ser­vices con­sti­tuted col­lu­sion and were there­fore in con­tra­ven­tion of the Com­pe­ti­tion Act.

Med­i­cal schemes rep­re­sented by the Board of Health­care Fun­ders, Hasa and the South African Med­i­cal As­so­ci­a­tion paid fines as a set­tle­ment of th­ese con­tra­ven­tions, and there have been no fur­ther col­lec­tive ne­go­ti­a­tions on tar­iffs.

The Com­pe­ti­tion Com­mis­sion’s de­ci­sion has been crit­i­cised for en­abling health­care providers to im­ple­ment higher-than-in­fla­tion tar­iff in­creases, re­sult­ing in a widen­ing gap be­tween what providers charge and what med­i­cal schemes pay for their ser­vices. Mem­bers have to make up the short­fall out of their own pock­ets.

Bon­akele says the com­mis­sion is cer­tain that its de­ci­sion was cor­rect in law, but it wants to see what the im­pact of its de­ci­sion has been and is not afraid to de­bate how the de­ci­sion may have con­trib­uted to ris­ing prices.

The com­mis­sion re­ceived many re­sponses to the draft terms of ref­er­ence of the in­quiry, which were pub­lished in May and has con­sid­ered them se­ri­ously, Bon­akele says.

The fi­nal terms of ref­er­ence, which will be pub­lished be­fore the end of this year, are likely to broaden the scope of the in­quiry, he says.

The com­mis­sion un­der­stands that there is a cer­tain level of mis­trust and mis­ap­pre­hen­sion about the in­quiry, and it has there­fore de­cided to ap­point an in­de­pen­dent panel to con­duct it, Bon­akele says.

The panel of em­i­nent peo­ple, who will have an ap­pro­pri­ate mix of skills, will be an­nounced be­fore the end of this year, he says.

The in­quiry should be­gin early next year, and the aim is to pub­lish a draft re­port by Septem­ber 2015 and a fi­nal re­port by the end of 2015, he says.

Al­though the date is “not cast in stone”, be­cause in­quiries tend to take on a life of their own, the com­mis­sion is de­ter­mined to fi­nalise the in­quiry as soon as pos­si­ble, be­cause many is­sues, such as in­vest­ment in the pri­vate health­care sec­tor, are hang­ing on the out­come of the in­quiry.

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