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Health department welcomes inquiry findings but hits back against criticism

2019-10-02 14:52

The department of health has welcomed the findings of the Health Market Inquiry, but has hit back at the criticism levelled against it with regard to its role in regulating the sector, saying that its previous attempts over the years were met with denials and court challenges.

Part of the blame regarding South Africa’s private healthcare sector woes – which was found to be “neither efficient nor competitive” – was apportioned to the department through the findings of the Competition Commission’s Health Market Inquiry, which was released on Monday. It stated that the department didn’t flex its legislative muscle on the sector.

The inquiry released its hard-hitting report into the private sector following a five-year investigation.

In it’s review, the inquiry led by former Chief Justice Sandile Ngcobo, found that the private healthcare market was characterised by “high and rising costs of healthcare and medical scheme cover” and significant over-utilisation, highly concentrated funders and facilities markets, as well as disempowered and uninformed consumers.

“We found there has been inadequate stewardship of the private sector with failures that include the department of health not using existing legislated powers to manage the private healthcare market, failing to ensure regular reviews as required by law and failing to hold regulators sufficiently accountable,” the report said.

However, the department hit back on Wednesday morning, saying for years the government was seen as “interfering” in the sector when it tried to curb rising costs that were negatively affecting the sector’s patients.

“Since 2009 the departmental attempts at creating a legislative framework to protect the public were rejected or met with denials and court challenges. The department then decided in 2015 to approach the department of trade and industry and agreed that an independent inquiry that would expose these challenges and irregularities and pave a way for the implementation of appropriate rules and regulations for the benefit of private healthcare users as well as the entire health sector,” it said.

It also stated that the delays in the commission – which was meant to complete its work in three years – was due, in part, to “persistent efforts to frustrate the process by some private sector stakeholders”.

The release of the findings and recommendations come at a time that government is charging full steam ahead with the implementation of the controversial National Health Insurance Fund (NHI).

Through NHI, it’s envisioned that a unified health system where government becomes the single-purchaser and payer for healthcare services will be created, while making healthcare delivery more affordable and accessible.

But, it too hasn’t been without rigorous contestation from within the sector as well as the public who have often criticised the public sector for failing in many respects in the delivery of healthcare.

Back to the inquiry’s findings, Professor Sharon Fonn said at a media briefing ahead of the release: “There’s a story that the private sector is better ... but there is no evidence of concomitant improved outcomes [in private healthcare]. There is no data to prove this.”

Among the inquiry’s other findings was that three hospital groups, Netcare, Mediclinic and Life, dominated the facilities market.

“The hospital groups make it very hard for newcomers and fringe players to grow and compete on merit. The three groups are able to distort and prevent competition by binding the best medical specialists to their hospitals with lucrative inducement programmes, with associated exclusionary effects on innovative newcomers. “Further, the three largest groups all but dictate year-on-year price and cost increases for funders,” the report stated.

“They facilitate and benefit from excessive utilisation of healthcare services, without the need to contain costs, and they continue to invest in new capacity beyond justifiable clinical need without being disciplined by competitive forces.”

And public hospitals are not able to compete with private hospitals since they do not “consistently provide the quality of care required to compete against the large hospital groups”, the inquiry found.

It recommended a regulation of the supply side of the market through a new regulatory authority which would oversee the regulation of healthcare facility planning, economic value assessments, health services monitoring and health services pricing.


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February 16 2020