1 October 2019
The Competition Commission has released the Health Market Inquiry Final Findings and Recommendations Report.
The Inquiry commenced in January 2014 and underwent a number of extensions.
The Inquiry has been conducted in terms of Chapter 4A of the Competition Act of 1998.
According to the terms of reference, chapter 4A allows the Commission to conduct market inquiries in respect of the “general state of competition in a market for particular goods or services, without necessarily referring to the conduct or activities of any particular named firm”.
The Inquiry has looked at the general level of competition in private healthcare in South Africa.
It has focused on healthcare financing and healthcare services.
One finding is that the South African private healthcare market is “characterised by high and rising costs of healthcare and medical scheme cover, and significant overutilization without stakeholders having been able to demonstrate associated improvements in health outcomes”.
Other findings include that the “market is characterised by highly concentrated funders and facilities markets, disempowered and uninformed consumers, a general absence of value-based purchasing, practitioners who are subject to little regulation and failures of accountability at many levels”.
The Competition Commission also found that the private sector has not been managed properly with the health department not using existing legislation to manage the private healthcare market, failing to ensure regular reviews as required by law and failing to hold regulators sufficiently accountable.
Consequently, the private sector can be described as neither efficient nor competitive.
The Commission also holds the view that a “more competitive private healthcare market will translate into lower costs and prices, more value-for-money for consumers and should promote innovation in the delivery and funding of healthcare”.
It declared that competition should occur on price, cost and quality and not on risk avoidance.
Recommendations include a set of interrelated interventions designed to promote systemic change to improve the context within which facilities, funders, and practitioners operate, and create a shift towards a pro-competitive environment; that the Competition Commission review its approach to creeping mergers to address high levels of concentration through effective merger review; the setting up of a dedicated healthcare regulatory authority to be known as the Supply Side Regulator for Healthcare; the creation of an Outcomes Monitoring and Reporting Organisation as a platform for providers, patients and all other stakeholders in the provision of healthcare to generate patient-centred and scientifically robust information on outcomes of healthcare; adjust HPCSA ethical rules to promote innovation in models of care to allow for multidisciplinary group practices and alternative care models so that fee-for-service ceases to be the dominant payment mechanism and the introduction of a risk-adjustment mechanism linked to the single, comprehensive, standardised base benefit option to remove any incentive by schemes to compete on risk.
The final report can be viewed at http://www.compcom.co.za/healthcare-inquiry/