General

Private healthcare is about to get more competitive

Rate this item
(0 votes)

Read Mia Andric's comment here...

After a four-year investigation, the Competition Commission has released a report that shows that South Africa’s private health-care market is uncompetitive and needs tougher regulation. It also found that South Africans are paying too much for private healthcare. This will come as no surprise to anyone who has used private healthcare, which is dominated by three hospital operators and the same number of medical aids.

Private healtchcare to become more competitiveThe 800-page report found that Mediclinic International Plc, Netcare Ltd and Life Healthcare Group Holdings Ltd have a combined 90% market share of the private hospital market, while Discovery generates far higher profit than its competitors. In addition to detailing the state of the industry, the report provides recommendations aimed at regulators who “are not as sensitive to core competition concepts as they should be”.

The panel responsible for the report has announced that a new regulator will be chosen through a public process of nominations and a vote in parliament. It has been recommended that this regulator sets tariffs for health services.

“In the majority of local markets, concentration levels are alarmingly high according to several recognised metrics commonly used to screen for concentrated markets. One of the challenges of this, from a competition perspective, is that it affords the three biggest hospital groups ‘must-have’ status in bargaining for contracts with funders which reduces funders’ countervailing power,” the report states.

“There is limited competition between schemes on factors that increase the value of medical scheme cover (in terms of both cost and quality) and limited evidence of efforts to design and implement alternative reimbursement models to contain expenditure and encourage value-based contracting.”

As a result of these findings, the Commission has proposed divestments and imposing a moratorium on issuing new licences to the three large hospital providers until such time as their national market share is no higher than 20%. It has also recommended the introduction of a stand-alone, standardised, obligatory ‘base’ benefit package that all schemes must offer. The package must include cover for catastrophic expenditure, which is basically the current Prescribed Minimum Benefits, and must make provision for treating PMBs out of hospital. The standardised package should also include primary and preventative care.

According to the Department of Health, South Africa spends roughly 9% of gross domestic product on healthcare. More than half of that is spent by about 16% of the population with private medical schemes. In light of the inquiry’s findings, the proposed changes will not only make hospital plans obsolete, as they will be replaced by the obligatory standard package, but will allow for that 16% of the population to gain the same value for a far more reasonable cost

Considering the fact that South Africa’s public health system is strained beyond capacity, these changes will also allow more people to gain access to private healthcare, perhaps even boosting

Minister of Health Aaron Motsoaledi's efforts to cut costs for patients. Whether the changes will impact the proposed National Health Insurance, however, will remain to be seen.

Magazines

African Fusion

AfricanFusionAfrican Fusion, the official publication of the Southern African Institute of Welding (SAIW), aims to provide up-to-date insight into welding technology and the welding industry.

Capital Equipment News

Capital Equipment News is dedicated to the application of equipment and modes of transport that are used in the mining, construction, quarrying, and transport industries.

Construction World

ConstructionWorldConstruction World was first published in 1982 and has grown to become a leader in its field, offering a unique mix of editorial coverage to satisfy the diverse needs of its readers.

Electricity + Control

ElectricityandControlE + C publishes innovative, technical articles that provide solutions to engineering challenges in measurement, automation, control, and energy management.

Lighting in Design

LightingandDesignLighting in Design is a glossy, upmarket publication aimed at lighting professionals. It is the only B2B magazine in SA that is dedicated solely to the subject of lighting.

MechChem Africa

MechChemJanuary2017cover MechChem Africa supports African engineering and technical managers across the full spectrum of chemical and mechanical disciplines.

Modern Mining

ModernMiningEstablished in 2005, Modern Mining is one of SA's leading monthly mining magazines, noted for the quality and accuracy of its writing and the breadth of its coverage.

Modern Quarrying

ModernQuarryingModern Quarrying is firmly entrenched as a leading industry-specific magazine. It focuses on promoting the science and practice of quarrying and processing in southern Africa.

Sparks Electrical News

SparksElectricalNewsReadable and informative, Sparks Electrical News is the newspaper for those involved in installing and maintaining electrical supplies and equipment.

 
Full Name*
Invalid Input

Company Name*
Invalid Input

Your Email*
Invalid Input

Phone*
Invalid Input

Postal Address 1*
Invalid Input

Postal Address 2*
Invalid Input

Postal Code*
Invalid Input

Street Address 1
Invalid Input

Street Address 2
Invalid Input

Postal Code
Invalid Input

Town / City*
Invalid Input

Country*
Invalid Input

Magazine

Invalid Input

Invalid Input