Healthcare Market Inquiry: Provisional Report

//Healthcare Market Inquiry: Provisional Report

Healthcare Market Inquiry: Provisional Report

The Competition Commission of South Africa released their Healthcare Market Inquiry: Provisional Report, on 5 July 2018.

The consultative process began in 2014. This inquiry was motivated by the high cost of increasing expenditure on private healthcare in South Africa.

We have provided the link to the Executive Summary of the 480 page report at the end of the newsletter, and share some of the concerns below:

Competition within the Industry

As expected, the report highlights the lack of competition within the South African Medical industry. Discovery Health owns 55% of the open-scheme market.

Fee-for-Service Model
This form of remuneration utilised by practitioners has been highlighted as an incentive for over-servicing, resulting in wasteful expenditure. The lack of a regulated pricing environment intensifies this behaviour.

Supply-induced demand
The report has found evidence that supply-induced demand is prevalent in the market. Specific discretionary surgical procedures were compared against those in comparable countries and utilisation rates in the private sector were higher than the average for six of the seven procedures studied.

Plan Selection
There are approximately 270 plans in the medical scheme market, all of which are difficult to compare. This makes it challenging for consumers to understand the value-for-money they get from each plan.

Funders fail to provide better value for consumers
There are concerns over the failure of governance that results in schemes’ interests being too closely aligned with those of administrators. The report refers to the separation of schemes and administrators as being ‘almost artificial’. A lack of transparency, accountability, and alignment of the interests of consumers and funders are some of the other reasons listed.

You are welcome to click here to access the full Provisional findings and recommendations report.

2018-07-10T11:29:26+00:00

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