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7 fixes the Health Market Inquiry wants for private healthcare in SA

The Gauteng Department of Health has revealed that at least 12 of the province's hospitals do not have permanent chief executive officers. The province has 32 public hospitals under the department's authority. 

The Health Market Inquiry has several recommendations to create a "pro-competitive" environment in the private healthcare market, which has been dominated by just a few major players.


The inquiry has taken five years to wrap up. On Monday, former chief justice Sandile Ngcobo, who led the panel of experts investigating the status of competition in the market, announced its final findings. 

The panel's investigation came after the Commission observed increases in the prices and expenditure in the private healthcare sector, which only a minority of South Africans could afford. "This raised concerns of the functioning of competition in the private healthcare market," Ngcobo told journalists at a media briefing.

"The recommendations focus on key interventions to correct competitive distortions, improve access to and increase the affordability of private healthcare."  

Trade and Industry Minister Ebrahim Patel, who also attended the briefing, said that he would refer the panel's report to Health Minister Zweli Mkhize, who would lead the charge in implementing recommendations. The report will be tabled in Parliament too, he confirmed.

Fin24 took a look at some of the key recommendations.

1. Close eye: Competition Commission to watch creeping mergers

The panel found there are three hospital groups dominating the market – Netcare, Mediclinic and LifeHealthcare, which has potential to "distort and prevent" competition.

The panel argues that a competitive private healthcare sector would translate to lower cost and prices and more "value for money" for consumers. 

The commission must review its approach to creeping mergers, as this will address high levels of concentration, the report recommends. 

2. Watchdog needed: Body to regulate healthcare suppliers

The report found that there have been regulatory failures in the private healthcare sector. To ensure effective and efficient regulatory oversight of suppliers of healthcare services, a new healthcare regulatory authority should be established – the Supply Side Regulator for Healthcare (SSRH).

Among its responsibilities, the SSRH will regulate health facilities and practitioners. Its duties will include capacity building and issuing of facility licences that follow national guidelines developed by a technical team.

The SSRH will also set up a negotiating forum for practitioners to set a maximum price for prescribed minimum benefits or PMBs. (The Council of Medical Schemes, which regulates medical schemes, defines PMBs as a set of defined benefits to ensure all medical scheme members have access to certain minimum health services regardless of their benefit option.)

Additionally, practitioners will also set reference prices for non-PMBs.

The SSRH will set up committees or other processes as part of research to advise on the best practice for particular medical conditions.

3. Info hub: Create an Outcomes Monitoring and Reporting Organisation

The panel recommended an independent private organisation – the Outcomes Monitoring and Reporting Organisation (OMRO) – which will be a platform for providers, patients and all other healthcare stakeholders to provide "patient-centred" and "scientifically robust" information on healthcare outcomes.

As hospitals, doctors and patients cooperate in generating information on healthcare outcomes, it will provide practitioners and hospitals with relevant information and ways to improve clinical quality.

It will also help provide patients and funders with relevant information on health outcomes for decision making purposes. 

4. Ethics focus: Changes to Health Professions Council of South Africa

The panel proposes changes to the ethical rules of the Health Professions Council of South Africa, to promote innovation in models of care.

Further, the HPSCA must make mandatory that curricula for all health practitioners (at both undergraduate and postgraduate level) include training to ensure graduates are aware of cost implications of their decisions.

It will also ensure they are aware how health system financing models impact on individual health decisions and ethics.

5. Lower risks: Anti-competitive interventions

Guidelines for associations have been proposed to ensure they are not at risk of potentially anti-competitive behaviour.

6. Keep it simple: Standardised options

Additionally, a single, comprehensive standardised base benefit option will be introduced and offered by all schemes.

This is "to increase comparability between schemes and to increase competition in the funders market," the report read. This will enable consumers to compare products, reward funders able to innovate and offer lower prices or at a higher quality.

There should also be a risk-adjustment mechanism linked to the benefit – it will remove any incentive by schemes to compete on risk. Schemes should rather compete on measures that attract new members irrespective of their age, health or risk profile, the report read. 

7. Incentives and training for board of trustees and principal officers

"We have found inadequate or poor oversight by board of trustees in the management of schemes," Ngcobo told journalists.

"The principal officers and trustees of schemes could be more active in ensuring that beneficiary interests are protected… there is a need to strengthen the role played by the boards of trustees and principal officers to ensure the member is always put first," the report read.

The panel recommended that the scheme boards of trustees and principal officers should be trained and incentivised to ensure schemes receive value for money from administrators and healthcare providers.

Addressing media, Competition Commissioner Tembinkosi Bonakele noted that the recommendations can still be challenged by various industry players