Competition Commission Response to NHI Bill

Implement Health Market Inquiry findings

Tamar Kahn | Business Day | 18 May 2023

THE Competition Commission has urged the Health Department to execute private sector reforms suggested by the Health Market Inquiry (HMI), arguing that they are crucial for the government’s National Health Insurance (NHI) plans. The HMI dedicated five years to examining the private healthcare sector’s operation and identifying potential competitive barriers hindering patient access to care. Though its final report was issued in late 2019, its recommendations have yet to be implemented. The report provided an in-depth analysis of issues within the private healthcare market. It stressed the necessity for effective regulation of the sector, especially as the state plans to procure services from private healthcare providers under the NHI.

The smooth transition to the NHI could be difficult without addressing these issues, according to Mapato Ramokgopa, the Competition Commission’s divisional manager and former director of the HMI. Speaking at the 22nd annual Board of Healthcare Funders (BHF) conference, Ramokgopa emphasised that many HMI recommendations didn’t necessitate legislative changes and could be accommodated within the National Health Act, the Medical Schemes Act, and the Competition Act. The Competition Commission has initiated conversations with the Health Department and the Council for Medical Schemes about creating a multilateral tariff-setting framework.

This would allow medical schemes to negotiate prices with healthcare practitioners. The commission has received three exemption applications, including one from the BHF. Rather than handling individual applications, the decision was made to engage with the Health Department to address the systemic problem highlighted by the HMI. Work on a price determination framework is underway, and a position paper is expected later this year. The HMI noted a “price vacuum” in the private healthcare sector after the Competition Commission prohibited collective bargaining between medical schemes and healthcare providers in 2003. While it was in accordance with the Competition Act, this decision led to uncertainty and disproportionately increased bargaining power for larger schemes. In June 2022, the BHF applied for an exemption to a section of the Competition Act that bars collective bargaining, suggesting that price negotiations between medical schemes and healthcare providers would enhance competition and favour consumers. The attempt to gain an exemption in 2008 was unsuccessful. The BHF was encouraged to reapply in 2022, particularly as the healthcare sector was granted a block exemption to respond to the coronaviruspandemic. Rajesh Patel, the BHF’s head of benefit and risk, expressed a desire to revert to the system in place until 2003, featuring tariff guidelines based on industry-wide negotiations.