Motsoaledi welcomes private healthcare sector probe

The investigation will be the same as the 2006 inquiry into banking costs that required the banks’ voluntary co-operation

The Minister of health, Aaron Motsoaledi, has welcomed the move by the department of economic development and the competition commission to conduct a market inquiry into the private healthcare sector.

Motsaledi has since 2009 been on a mission to transform the South African healthcare system. One of the milestones achieved during his term as minister of health was the introduction of the National Health Insurance (NHI). Motsoaledi holds a view that private sector in SA is charging too much for healthcare.

“I said many times that the fees are exorbitant. It is time to find out what is going on out there, and I want this public enquiry to come and bring order to the situation. We are intervening in two levels, first to make healthcare services in the country more efficient.

“…. The public healthcare in the country has too many serious problems. We are planning to resolve the deteriorating and poor quality in the public healthcare, and the exorbitant prices in the private healthcare,” said Motsoaledi recently.

The economic development minister, Ibrahim Patel, said the competition commission will conduct this inquiry, the first investigation of its kind under the Competition Amendment Act that came into effect on April 1. The inquiry will start before the end of September and is expected to take between 18 and 24 months before being concluded.

The private healthcare industry is said to be struggling to resolve key challenges facing the industry, the most pressing of which is pricing. Without an agreement on tariffs, healthcare professionals in the same discipline may charge widely differing rates, and patients often get a nasty shock when they are billed.

According to Patel, preliminary evidence obtained by the commission suggests that some features of the market, especially as they relate to patients’ ability to take decisions on prices and the incentives gained by private healthcare companies, have led to a situation where competition is prevented, distorted or restricted.

The competition commission will publish the terms of reference for the market inquiry for public input before they are published in a government gazette.

The investigation will be the same as the 2006 inquiry into banking costs that required the banks’ voluntary co-operation. However, the commission will have wide-ranging powers to summons people to testify or to provide documents.

It will be able to call for any information it may deem relevant, and may initiate a complaint against a firm, based on the information obtained during the inquiry. The commission first announced its intention to look into rising costs in the private healthcare sector in December 2011.

The commission will look into the influencing factors on cost of private healthcare in South Africa. It will also establish the manner in which prices are determined between service providers and medical aid. These service providers include clinics, hospitals and private specialists. The nature of competition between medical schemes in the country will also be considered.

Access to information about cost of private healthcare that will aid consumers to make choices will be probed too.