Healthcare competition inquiry widened
The Board of Healthcare Funders (BHF), which represents medical schemes and their administrators, has welcomed the expansion of the terms of reference of the Competition Commission’s inquiry into the private healthcare sector.
The Competition Commission has finalised the terms of reference and published them in the Government Gazette.
It says the inquiry will start on January 6 and be completed by November 30, 2015.
The revised terms of reference state that the inquiry will consider “the extent to which the regulatory framework achieves the adequate function of the market for health insurance”.
The inquiry will also look into the influence of the current laws and regulations on health insurers and private health insurance to respond to the demand for health care.
At a recent BHF conference, independent actuary Christoff Raath, of the Health Monitor Company, described the medical scheme industry as “a regulatory orphan”, because government’s failure to implement certain reforms has made medical scheme membership increasingly unaffordable.
In particular, medical schemes are obliged to provide certain minimum benefits that must be paid for in full no matter what the service provider charges. And open schemes must admit anyone who wants to join without setting contributions in line with your state of health or age.
However, there is no compulsory membership of medical schemes and, as a result, younger, healthier people do not join schemes until they need medical care.
It is estimated that schemes could be 30 percent cheaper if scheme membership was compulsory for all employed people, and other measures, such the crosssubsidisation of costs across schemes and income groups, were introduced.
The BHF says it is also encouraged that the medical equipment, consumables and pharmaceutical industries are listed specifically in the terms of reference for the inquiry.
The BHF’s managing director, Humphrey Zokufa, says it is clear from the terms of reference that the inquiry will not focus only on the costs of health care, but will also examine efficiencies and quality within the sector.
Zokufa says it is extremely important that these issues are resolved, not only to ensure the viability of medical schemes, but also because they could pose a threat to the proposed National Health Insurance system.