Health Minister Aaron Motsoaledi says the provisional
findings of the Competition Commission’s Health Market Inquiry have vindicated
his department in its ongoing fight against the exorbitant costs of private
healthcare. Commenting on the HMI’s Provisional Report and Recommendations, the
minister cited his ongoing attempts to get the Competition Commission to
intervene in what he called “the uncontrollable costs” in the private sector
following its 2004 ruling that banned collective price negotiations between
medical schemes, doctors and hospitals.

According to Motsaoledi, the HMI findings provided his
department with much more evidence that it was looking for to support its
claims that costs in the private healthcare sector were too high.

“This investigation showed that much more is needed to
address the costs than reversing the 2004 ruling, particularly in enforcing
regulation that stakeholders have been fighting against,” he said.

He welcomed the HMI’s recommendations around the setting up
of a Supply Side Regulator for Healthcare (SSRH) to provide effective and
efficient regulatory oversight on issues such as pricing and healthcare quality,
as well as its recommendation to enforce legislation dealing with the issuing
of certificates of need (CoN) aimed at the redistribution of healthcare
resources to improve access. Motsoaledi however stressed that the proposed new
regulator should be independent and not be appointed by him.

In its recommendations, the HMI pointed out that some of
what it called “significant supply-side failures” cannot wait for the
establishment of a new regulatory authority. In these cases, interim proposals
are made for existing regulatory or interim bodies to oversee the implementation
of the recommendations.

It identified four key areas of supply-side regulation that
are currently lacking, saying that current regulatory measures on the supply
side have been limited and fragmented compared with other countries where there
is often a single, dedicated supply-side regulator.

“In South Africa, the supply side has generally been left to
operate within a fragmented, poorly enforced regulatory system, with weak
oversight. It is clear that the existing regulatory system does not go far
enough in terms of achieving optimal healthcare outcomes and appropriate access
to quality healthcare services,” the recommendations state.

The HMI says regulatory measures to “affect” the behaviour
or operation of healthcare service providers and usually include four critical

  • Healthcare capacity planning,
  • Economic value assessments,
  • Implementation of appropriate payment mechanisms, and
  • Outcome measurement, registration, and reporting.

Its recommendations regarding the CoN only deal with private
hospitals, proposing that it should replace the current system of hospital
licences, However, it noted that ‘the Minister may issue appropriate
regulations for the granting of the CON in line with a centralised national
licensing framework for all health establishments, including day clinics,
hospitals, sub-acute facilities as well as primary care facilities such as
dental surgeries, GP rooms and primary care clinics”.

Answering a question by Dr Johann Serfontein from the SAPPF
about whether the criteria for CoN would be based on national health needs or
the positioning of private patients, HMI Panel member, Prof Sharon Fonn said
that private healthcare providers should see it as an opportunity to grow their

She said as the NHI Bill provides for the state to purchase
healthcare services from private providers, it opens up multiple opportunities
in relation to the purchasing of care.

“Currently, we think only people who can purchase care from
private providers are people on medical schemes. That is open for discussion I
don’t think it is necessary true.  If the
public sector becomes the purchaser and private providers can prove that they
can provide outstanding quality care, it will open up opportunities for private
providers and facilities to flourish and become profitable. The silo approach
to the buying of healthcare should change and while we (the HMI) can’t enforce
the implementation of CoN, we need to open up the conversation to look at the
real opportunities it can afford to the private sector,” Prof Fonn said.