The Health Market Inquiry (HMI) report, released by the Competition Commission on 30 September 2019, outlined crucial recommendations aimed at reducing private healthcare costs in South Africa. However, five years later, these recommendations remain unimplemented by the government. As a result, private healthcare costs continue to rise, making it increasingly inaccessible to many citizens.
In response to this lack of action, the Board of Healthcare Funders (BHF) has formally approached the Competition Commission. In 2021, the BHF submitted an application seeking exemption from certain provisions of the Competition Act.
If granted, this exemption would allow medical schemes to jointly negotiate tariffs with healthcare providers, increasing transparency and potentially driving down costs. This recommendation was central to the HMI report’s findings, yet it remains unrealized, leaving healthcare pricing opaque and out of reach for many.
Relieve burden on public healthcare
The proposed exemption would benefit the entire healthcare system, fostering transparency in private healthcare costs and potentially reducing medical scheme contributions. More affordable private healthcare could relieve pressure on public healthcare facilities, contributing to improved overall service delivery. Additionally, it aligns with the broader goal of achieving universal healthcare coverage in South Africa.
Despite these potential benefits, the department of health has yet to act on the HMI’s recommendation to establish a negotiating forum between private healthcare stakeholders or to create a supply-side regulator to ensure fair pricing.
The government’s inaction stands in stark contrast to its stated goal of making healthcare more accessible and affordable for all, said BHF. The delay has perpetuated a pricing gap between what medical schemes cover and the actual charges levied by healthcare providers, leaving members to face high out-of-pocket costs. Furthermore, consumers are left unable to assess whether they are being overcharged for healthcare services, the organisation explained.
Contrary to some perceptions, South Africa’s medical scheme members come from a broad demographic spectrum. Data from Statistics South Africa shows that 50.4% of medical scheme beneficiaries are black, 9.8% are coloured, and 7.6% are Indian or Asian, meaning 68% of medical scheme members are from previously disadvantaged communities. This highlights the urgent need for reforms that would benefit a diverse population, not just a privileged few.
The BHF, represented by its managing director, Katlego Mothudi, has reiterated its call for the Competition Commission to approve its exemption application without delay.
“With no indication that the department of health plans to implement the tariff recommendations of the report, the BHF has written to the Competition Commission requesting it to urgently approve its application for exemption.”
BHF managing directore Katlego Mothud
“Granting the BHF exemption will be beneficial to the healthcare ecosystem, including medical scheme members, while we await the department of health to establish a negotiation chamber,” said Mothudi.
The BHF has offered to include an independent third-party observer in the negotiation process to ensure transparency and fairness in tariff determination.
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Passing the buck
Recently, the Competition Commission presented its case to Parliament’s Portfolio Committee on Health, reaffirming the urgent need for a forum to set healthcare tariffs. However, instead of granting the BHF’s exemption, the Commission has deferred responsibility to the department of health, leaving the pricing vacuum unresolved. The Commission is also considering a block exemption for healthcare providers, which would still require oversight from the department of health, raising concerns about further delays, BHF noted.
The BHF warned that, given the department’s track record, relying on its involvement in the block exemption process could result in similar delays. As South African households continue to face financial pressure, the failure to implement the HMI’s pricing recommendations exacerbates their economic struggles. Making quality private healthcare more affordable could ease the burden on public healthcare facilities, improving service delivery and contributing to universal healthcare coverage.
Despite the government’s repeated claims that high healthcare costs necessitate the National Health Insurance (NHI) scheme, BHF emphasised that the department of health has failed to act on practical measures that could immediately address these costs.
The BHF urges the Competition Commission to exercise its legal authority and make a swift decision on the exemption application, without waiting for the department of health’s approval.
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