Private healthcare dominated by ‘disempowered and uninformed consumers’
The Health Market Inquiry into the rising costs of private healthcare in South Africa has found that there is a need for a supply-side regulator in the private healthcare sector.
The inquiry, chaired by former Chief Justice Sandile Ngcobo, was instituted by the Competition Commission four years ago.
The preliminary report, which was released on Thursday, found that while there are 22 open medical aid schemes, Discovery Health and Medscheme account for 76% of the market.
The data analysed revealed that between 2010 and 2014, the cost of medical aid increased by 9.2% every year.
This was 4% higher than the average consumer price inflation during that period.
“The market is characterised by high and rising costs of healthcare and medical scheme cover, highly concentrated funders and facilities and disempowered and uninformed consumers, a general absence of value-based purchasing and ineffective constraints on rising volumes of care, while practitioners are subject to little regulation and failures of accountability at many levels,” said Ngcobo.
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The inquiry also found that three hospital groups dominate the market. Netcare, Mediclinic, and Life share a combined 83% when it comes to the number of beds and 90% of the total number of admissions.
Some of the recommendations include simplifying medical aid schemes and introducing a base benefit option, which will allow consumers to be able to compare schemes.
The inquiry has also recommended a supply-side regulator be established to set tariffs after extensive consultation with consumers and stakeholders.
Health Minister Aaron Motsoaledi welcomed the report, saying the report took four years to complete because the private sector does not want to be regulated.
South Africans have until September to comment.
The final report will be published in November.