Private healthcare market is ‘failing consumers’ – CompCom

Members pay high prices that aren’t matched by a demonstrated improvement in health outcomes: report.
The big three private hospital groups are not disciplined by competitive forces, according to the Health Market Inquiry. Image: Shutterstock

It has taken the Competition Commission five years to conclude its investigation into the private healthcare market – and the final results are damning: the industry cannot continue to operate as it has been. 

“People keep saying don’t take my private market away; we are saying it’s not serving you nearly as well as it could and should,” says Health Market Inquiry panelist professor Sharon Fonn.

This is the crux of the findings detailed in the 256-page report, released by the commission on Monday.

The inquiry found that the private healthcare market is uncompetitive and failing consumers on many levels, as they pay more and more for services without any real value for money in terms of health outcomes. 

The commission began its probe in 2014, and its findings, which are largely in line with its provisional findings in 2018, were informed by information received in written submissions, public hearings, seminars and information given by experts in the health sector.

Market ‘prevents, restricts, distorts’ competition

The report arranges its findings in three markets – namely health facilities, practitioners and funders – under which it identifies certain aspects about the market which alone or in combination prevent, restrict or distort competition.

The report’s findings are expected to have implications for the contentious National Health Insurance Fund, which is scheduled to be operational by 2026, by possibly creating an enabling environment for it to function within.

Read: South African taxpayers will bear the brunt of the NHI

High concentration

Three hospital groups, Netcare, Mediclinic and Life Healthcare, account for 90% of the private hospital market in terms of beds and admissions. 

The inquiry raised concerns about the highly concentrated nature of the market, which it says makes it more vulnerable to collusion, both through the formation of cartels and informally.

The lack of competition allows the three hospital groups to secure steady and sizeable profits every year by making it difficult for newcomers to enter the market because, according to the report, they are able to “distort and prevent competition by binding the best medical specialists to their hospitals with lucrative inducement programmes”. 

Fonn says one of the more significant findings of the commission, derived from extensive evidence and analysis, is the practice of “massive overutilisation” in the market. This speaks to overtreatment of patients through frequent hospital admissions and extended stays, and increasing the level of treatment where there are lesser alternatives.

‘Perverse incentives’

This is incentivised in the market in what the commission calls “perverse incentives” especially in a “fee-for-service” market where the more services a healthcare professional renders, the more profits they are able to make. Medical aid schemes also have to fully reimburse prescribed minimum benefits (PMBs) at cost, which allows practitioners to determine their own degree of intervention, knowing this will be fully covered by funders. 

“It means as a practitioner I have more power, I can set my own reimbursement level,” says Fonn. “I know if you [the patient] have a PMB [condition] and I do extra investigations to make 100% sure that my diagnosis is right, and I give you this treatment and that treatment, I can determine how much health costs there are.”

This has the effect of pushing up medical aid contributions as schemes and administrators aggregate for the care they pay for year on year. 

“They [the three large groups] facilitate and benefit from excessive utilisation of healthcare services, without the need to contain costs, and they continue to invest in new capacity beyond justifiable clinical need without being disciplined by competitive forces,” the report states.

Are you even healthier?

Despite the administration of excessive treatments that consumers pay a premium for, the commission said there is no way of measuring improved health outcomes for patients from the services they receive from individual practitioners or health facilities. 

Among the commission’s recommendations is the formation of an independent and private ‘outcomes monitoring and reporting organisation’ that will provide patient-centred and scientifically-backed information on the outcomes of healthcare.

“There’s nothing wrong with spending more and having more tests, as long as it results in improved outcomes – and that is what we don’t know,” says Fonn. 

Beyond patients not being able to compare outcomes based on interventions and practitioners, the monitoring organisation will also allow practitioners to benchmark their performance against their peers, which in turn will encourage greater innovation in healthcare. From a funder’s perspective, schemes will be able to contract practitioners based on value for money.

Discovery Health

High levels of concentration and weak regulation were found in the healthcare funders market as well. 

The commission names Discovery Health as one of the administrators that has enjoyed the benefits of this environment. 

“Discovery Health has, over a sustained period, earned profits that are a multiple of those of its main competitors with no sign of effective challenge from incumbents or new firms,” the report reads.

The commission also takes issue with the number of incomparable medical aid benefits that consumers can choose from, saying this often leaves them disempowered. They are also unable to swiftly leave schemes when offered better benefits from other providers. In addition, the schemes market their plans based on risk, mainly looking to attract young and healthy people.

“Absent this disciplining effect arising from consumers, schemes have no pressure to compete on pro-consumer metrics and to offer better products,” says the report.

To remedy this, the commission has recommended that the industry introduce a single, standardised benefit scheme that is designed to attract members irrespective of their age, health or risk profile. 

“It will enable consumers to compare products, reward those funders which are able to innovate to offer lower prices and/or higher quality, and, thereby, both discipline and reward the market.” 

The recommendations include the establishment of a “supply-side healthcare regulatory authority” that would be responsible for issuing licences for new healthcare facilities, among other things. The commission says provincial departments are currently unable to report how many licences they have issued. 

The regulator would also be responsible for measures aimed at bringing healthcare prices down, such as setting up a multilateral negotiating forum where practitioners can set a maximum price for PMBs and reference prices for other healthcare services.

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Pure and utter socialist bull!!! All the want is to try and divert attention from their failed public hospitals due to utter incompetence!!!!!!!!!!

It is not possible that both systems are failing its users?

I love the mental anguish here. The need to moan versus the illogical conclusion that critising one system automatically means supporting the other. Child like thinking.

Well maybe the commission and government are socialists, but we have to admit that there is extensive price gouging going on by private medical service providers and medical aid companies. The problem is that there is no price elasticity when your life is on the line. Ever seen a poor specialist in private practice?

My wife had to go for a relatively minor procedure, 1 night in hospital, 45 minutes in theatre. The price? A cool R92000 all told, of which the specialist “earned” R45000. Not bad for 2 15-minute consultations and 45 minutes of operating, equating to an hourly rate of about R36000. To put this into perspective, a highly experienced, professionally registered engineer, with multiple degrees, will charge public sector clients R2000 per hour for his services, and advocates around the same hourly rate.

The private medical industry is not without blame here.

Agreed, we get ripped off, and it is daylight robbery… Then after the exorbitant price, medical aid refuses to pay some aspects, and you directly out of pockets…

Weeks and months later, strange single invoices appear, for stuff that was never paid, but you didn’t receive an invoice in the first place and they threaten to blacklist you, so you pay…

Not to defend the specialist, but a large chunk of change goes straight to malpractice insurance, because the lawyers are standing around drooling too.

Fact is when people get sick, money loses all meaning, and it’s no wonder there’s a feeding frenzy.

So the patient is not without blame too unfortunately. There *should* be price elasticity, and if healthcare consumers aren’t prepared — at least in principle — to refuse service at some price, can we entirely blame the supplier?

If you study MBCHB it takes a minimum of 6 years, then you work for the state -not at a place of your choice – for another 3 years. If you specialize add another 3 years. SO think again.
As an engineer I studied for 4 years and could work for myself. These guys really have to wait 12 years before they can do the same!!!!!

@Casper1 – many engineers also do postgrad degrees, and have to work for at least 7 years before they can register as a Pr Eng. Even then, when they’ve spent 4+2+2 = 8 years at varsity for an M degree, and then another 7 years pre-registration, they earn less than 6% of what the specialist above earns. This just simply cannot be right.

I must be using the wrong advocates. Last time I needed one (not senior) he charged R 45 000 for 3 hours work. And the instructing lawyer no less than R 5 000 per hour or part of.

Surgeon, assistant and anaesthetist?Did the doctor use his own equipment or that of the hospital?

A useful point about medical costs. The HPCSA considers it unethical for a doctor not to explain to the patient the costs. If I got a surprise exorbitant bill like 45k for an hour of work I would request a significant discount and if not forthcoming a complaint to the HPCSA would be made. That precipitates much anguish and potential problems for the expensivde doctor. If however you had been informed and chose to go ahead then you must pay.
Buyer beware.

Some intelligent commentators on this site tend to forget or ignore the fact that the biggest contributor to the profitability of private healthcare facilities is the very government that complains about uncompetitive behaviour! Who destroyed the competition in the healthcare sector? Who is responsible for the implosion of public healthcare? Who caused the Life Esidimeni massacre? This same government that complains about a lack of competition, destroyed the biggest competitor!

Price acts as a messenger in a free-market economy. Price signals the need for a service or product. The fact that private healthcare is expensive, says one thing only – People are desperate for the service because the party who is responsible for the actual provision of the service, the government, is a total disgrace and a failure.

Government failures contribute to the bottom line of private healthcare facilities. This failure of an ANC government creates a business model for private healthcare. Never underestimate the ignorance and short-sightedness of socialists.

Relax. The NHI will sort this all out. Then everyone will have equally poor health outcomes at a fraction of the price. Happiness.

Yes, because the alternative is worse, we must blindly support this system in spite of its flaws. Public schooling logic.

No Anything – Not blindly – You know that when you sign up you will pay!!!! It is your own free choice to do so !!! If you do not like it go somewhere else or even better start your own medical aid company!!!

Casper did not read the article. All the schemes are perps here. There is no choice because these problems are structural. Public schooling strikes again.

What do you mean, fraction of the price? I want it, I demand it FOR FREE!

I agree 😉

Beyond 2026 many of us will we waiting in a long queue, while chuckling with the person next to you (to pass the time):

“REMEMBER THE GOOD OLD DAYS WHEN WE USED TO COMPLAIN ABOUT EXPENSIVE PRIVATE HEALTHCARE?”

(…instant laughter breaks out, as we will have nothing else to relieve the pain, while waiting)

There is actually the phenomenon of over-diagnosis and over-treatment, which is evident in the US, and on the bright side NHI will help sort that out.

Fee-for-service medical charging systems (such as we have in the SA private market) are widely recognised to lead to over-servicing and over-treatment when compared to, for example, episode-based charging. There is no doubt about that; one is reliant on the professional ethics of one’s doctor not to over-service. It’s also worth noting that at least some over-servicing is driven by the practice of defensive medicine, where tests and treatment are ordered “for the record” and to protect the doctor or hospital against malpractice claims.

Yes agree,

There is certainly merit in this discussion and changes proposed around the private/public healthcare system.

This doesn’t mean one condone the malaise in the public healthcare sector.

A youngster I know badly burnt his hands a week ago. A private hospital demanded R800k to accept him for treatment. He went to Kalafong got some of the best Dr’s for free. The bedding and surrounding aren’t perhaps 5 star yet he is home now after a week and saved R800k. A private hospital would probably have kept him even for longer.

His insurance will payout a lump sum that he can now use on something much better.

Privatization of broad sectors one inevitably find tends to be monopolized by actors with interests other than the actual output or services rendered.

The blind pursuit of the profit motive is stupid.

The competitions commission is an orchestrated arm of the ANC. The government tells it which tune to play. It is set to destroy certain sectors. It was the same with the witch hunt on the construction sector. And where is the construction sector today? Almost non existent.

So you are staying that there was no price fixing despite them volunteeringly admitting it? Wow.

No, actually the charges and admissions were not related to “price fixing”.
The construction firms divided the work required for the Gauteng Freeway Upgrades and the FIFA World Cup among themselves, so as to ensure that all the projects actually got completed in time. But by doing so, of course acted in contravention of section 4(1)(b)(ii) of the Competition Act, 89 of 1998 which prohibits “dividing markets by allocating customers, suppliers, territories, or specific types of goods or services”.
From the ten thousand meter altitude perspective, the construction companies acted both rationally, and in the best interest of the country and society.

It is never in the best interests of the country, or of society, for major companies to secretly collude to carve up markets and not bid against one another. This is tender-rigging and is illegal worldwide precisely because it drives up prices and down quality to the detriment of society. The domestic construction industry’s woes run far deeper than their fines for manifestly illegal behaviour. What appears to have driven the bad behaviour was the belief that they couldn’t all afford to bid on all projects, since bidding is itself costly. A solution to that is to approach the tender board and openly form risk-sharing consortia, not to conspire to rig tenders.

haha – I am suuuure the construction companies did what they did out of the goodness of their hearts. Child-like thinking.

@Anything.
In your 6 comments on this article you inter alia respond to other commentators with:
“Child like thinking”
“Public schooling logic”
“Public schooling strikes again”
“Child-like thinking” (a second time)
– while yourself committing various formal errors of logic. For which part of government do you work? The Competition Commission? SSA? DOH?

The system is not compulsory. You can choose not to partake . Alas the system isn’t that bad and this is shown by our ruling party who all choose Private Health care system over their own State Run system ! Even
Mugabe was a big fan of Private Health Care , just not in his country of birth though !

So? Does that mean it is without flaw? Why get so defensive about its problems?

Private hospitals etc are not cheap at all, but then on the other hand, if one needs a hospital, one knows the private hospital is actually a fully functioning hospital and not a slaughtering house as what public hospitals actually became in the last 20 years – nothing in it is actually fully working, from lifts to dirty walls, floors etc – pay a visit to say the public addington hospital and thereafter to a private hospital in umhlanga – difference is like heaven and hell. The strange part is that once again the government is worried about something that is fully functioning in the private sector, once the incompetent government interfering with some thing they know nothing about, certainly, if managed by them, they will make a mess of it. Will this commission take the brunt if the doctor does not perform the so called “unnecessary” actions and the patient dies. Would be very interesting to see in the following scenario: If one of the-256-page-report-writers needs a hospital, which hospital will be visited by them – private or public????????? – will watch that one with an hawk eye.

“People keep saying don’t take my private market away; we are saying it’s not serving you nearly as well as it could and should,” says Health Market Inquiry panelist professor Sharon Fonn.” – Please note this statement for if and when nhi is in “full functioning” and we will see what the nhi-pie-in-the-sky is going to provide us with.

Please come to reality: Why not worried about the no-value / no return on hard earned tax money paid to the government?????????

Article in yesterday’s Burger: The Eastern Cape has health budget of R22,3 billion. Malpractice claims run to R24 billion, Gauteng health budget R42,1 billion. Malpracice claims for 2018 R21,7 billion etc.
Perhaps some “unnecessary” procedures might have proved to be useful.
It is very easy to find a diagnostic process to be unnecessary after the event, but that is the nature of the beast.

ANC mumbo jumbo.

When it’s time for ESKOM’s increase we have blackouts before they apply to Nersa.

When they want to implement NHI they have a report telling you what you have now is rubbish.

These ignorant and myopic socialists will regulate medical services into extinction. They destroyed the local sugar industry and the chicken industry, along with thousands of jobs with their low and “competitively structured tariffs”. They are in the process of destroying the local wheat and maize industries and even more jobs along with it. Their shortsighted actions lead to increased urbanisation and instability and poverty in rural areas.

If the private medical sector is uncompetitive, why are foreign citizens paying to visit our private hospitals? Government regulations will have the opposite effect. Locals will have to seek medical services in Singapore, like Mugabe. The state should focus on their own responsibilities in die medical sector. They should prevent the deaths of men who go through initiation ceremonies and they should prevent situations like the Life Esidimeni disaster. The government has abandoned its own responsibilities in the medical sector and now they attack the world-class services in the private sector.

When you are employed at an organisation called a “Competition Commission” you have to justify your position, salary and bonus by finding a collusion behind every bush I suppose. My personal fear is that if I suffer a heart attack at some stage, I will have to depend on the Chairman of the Competition Commission for mouth-to-mouth resuscitation.

Well said! Pity the MW-site only allows me ONE up-vote 😉

no probs Michael : I helped with my vote .

Yep, well analised. Do not expect the low intellect to understand.

Oh shock, horror – the private healthcare system is not functioning optimally!
This astounding news brought to you by the Competition Commission, one of the best tools of economic and social destruction in the hands of the Brutal Oligarchy (officially known as the ANC government).

Why don’t we discuss public healthcare for a second? Which is in absolute shambles. The examples are too numerous and too heartbreaking to even list here. Oncology unavailable in whole provinces of the country. Operations postponed and patients dying due to the cleaning equipment for theater linen being out of order. Basic supplies like drips and catheters being unavailable. Highly paid “doctors” in the DOH hardly ever showing up for work but drawing seven-digit salaries – and overtime. Which of these facts come as a surprise, given how socialist systems ALWAYS guarantee these service level outcomes?

In short:
In the private healthcare system patients are being overcharged.
In the public healthcare system patients are dying. Like flies.

It is clear which of the above the Competition Commission and the Oligarchy see as problematic and worthy of drastic intervention.

In spite of the competition commission medical aid patients usually have a choice of which hospital and service provider to use. You will pay a lot more for the best treatment.

Depending on the condition the patient needs to make a judgement call and shop around.

> To remedy this, the commission has recommended that the industry introduce a single, standardised benefit scheme that is designed to attract members irrespective of their age, health or risk profile.

How convenient.

A panel of “experts” that just happen to agree that the solution to what are currently minor problems is to tear down the multi billion rand health industry.

Here is a crazy idea. Instead of building a new airport because we have some broken lightbulbs let’s figure out how to ensure the lightbulbs always work.

Perhaps the commission should investigate the collusion of the Actuarial mathematitians and introduce some or other scheme to arrive at a single result for a complex scenario.
Eish!

So the commission recommends in its conclusions we have a single fund… Hmm nhi.

Also, its incorrect that the PMBs results in more cost to medical aids. Our experience is that the medical aids decide how and where the pmb gets treated. As such if you go above their rate or go for more consultations you pay the difference. Personal case in point, we paid R70k ourselves where the scheme said it would cover R1.2k. Only milking of a private consumer here.

Our private and our public healthcare is a real problem.

No surprises here…..been with Discovery for some time, you pay 50K a year and they act like they are doing you a huge favour giving you 13k a year for your savings……

Hopefully you are not forced with a gun to your head to remain a Discovery member?

Yes, they are freaking pricey. But cost complaints like these will serve as nice passage-way chat beyond 2026 while waiting to be assigned a NHI-doctor.
“remember the good old days when we still had pvt healthcare like expensive Discovery?”

Trust me JadedKnight – You will cherish your contributions when you go for major spinal surgery which worked out to R 245000

26 months , 8 stents and 5 vessels bypass surgery = R1,4M abouts. MA R6000 pm and all paid for. Thankful for such a bargain with a great outcome. Many such stories. Conclusion of CC doubtful. And for the burn patient comments on this site – where do you think the money for your care came from??? Not falling from the sky. Go think again

Sorry to hear about that Jannie, yet not everybody “gets the bargain”…

I can compared your reasoning to a Lotto winner telling people to keep buying lotto tickets, because look a bargain, I won!

I cannot disagree with this article and the Competition Commission more. I have had a major accident and the value I received from Discovery was massive. The reason the premiums keep rising is because the economy is failing, can’t have the one without the other.

It cant be right that year after year we get 2 digits increase way above inflation. Something is not right in this industry

Partially due to cost of medical imported equipment.

While I agree, every year one cringes when the rate of premiums exceeds that of salary, but then one realise “the cost of introducing 1st world medical benefits, to that of a far-flung 3rd world country”, will be expensive”.

The more 3rd world SA becomes, with the ZAR exchange-rate falling sick, the more expensive this foreign medical stuff becomes. (Makes complete sense to me).

The local traditional healer is more cost effective, they should get more support(?). They have an important function to fill.

Medical inflation runs above broader consumer inflation globally, particularly as more expensive drugs like oncology biologicals and high technology implants and devices become the accepted standard of care. If you add the points already made about the fact that healthcare inputs are globally priced, and so exposed to ZAR devaluation, plus rampant increases in malpractice premia (especially for specialists like obstetricians and neurosurgeons), it’s really not surprising that medical aid contributions rise at a faster rate than broader inflation. The only way to prevent this would be to erode the benefit package.

The great thing about statistical average is the fact that some data are higer and some are lower. Hence you add all together and you get an average, which is what the CPI inflation figure is.
Michael and SARep give some of the details.

I suspect the rate of medical expense inflation experienced by scheme members is more than the already substantial increase in medical scheme tariffs. That is because all GP and specialist fees are restricted to the ‘scheme rate’ (or some multiple thereof) and this is increasingly detached from actual fees. In some disciplines I think we are down to less than a few hundred specialists left in SA and the way access to those specialists is being rationed is through higher fees. Further ‘managing’ the fees down will probably only reduce supply even further.
We should also be cautious in regarding all private hospitals as being of a high standard – I think the reality is that there is a very mixed bag in terms of quality – even amongst private hospitals.

Price controls are an excellent way to create shortages. In healthcare it’s even worse because doctors are not loaves of bread: there’s a supply-side problem as well, made worse by the fundamentally monopolistic (and ancient) licensing regime.

Any “innovation” on the demand side should be matched by some serious contemplation for how supply can be improved. I’ve only heard deafening silence on that score though so far. Perhaps not surprising since everyone weighing in on NHI is on the supply side and benefits immensely from its constraints.

…I note the proposed “supply-side regulator” is, incredibly, clearly intended to reduce supply further by regulating whatever (??) in the industry is somehow not already regulated.

So the 256page report does not mention that SA private healthcare (medical aid schemes) per member costs 25% of UK NHI per citizen and 10% of US medical care per citizen? And the report does not check whether medical outcomes are good? What did the comp com do for 5 years?

The most glaring fact to emerge from this report is that the ANC appointees on the panel regard medical aids as *funders*. This is absolute false facthood: the medical aids allow members to fund themselves, with an element of cross-subsidy, but, unlike taxes (in the ANc/Union/SACP view) the money does not appear by magic, it is collected from the members or their employers.

In other words, this is about the ANC wanting to expropriate Other Peoples’ Money without compensation, in a similar manner to which they wish to raid pensions to fund their looting and nomenklatural lifestyles.

Another concerning fact is that the Omission shares the ANC’s mistrust of “our people”, not trusting them to be able to choose between the offerings.

What is next?
Forcing cell phone companies to offer standardised, uniform packages so that we aren’t bewildered by choice?
Eliminating private schools?
Forcing everybody to use the same security company, and while we are at it, nationalise it and incorporate it into SAPS?
And since we should not trust the lumpen citizens and Choice Is Bad, force all political parties to offer the same policies. Better yet, emulate their idols and have a one-party state, with everybody in Mao uniforms.

LOL V3 – You are predicting the future here!!!

The most glaring fact to emerge from this report is that the ANC appointees on the panel regard medical aids as *funders*. This is absolute false facthood: the medical aids allow members to fund themselves, with an element of cross-subsidy, but, unlike taxes (in the ANc/Union/SACP view) the money does not appear by magic, it is collected from the members or their employers.

In other words, this is about the ANC wanting to expropriate Other Peoples’ Money without compensation, in a similar manner to which they wish to raid pensions to fund their looting and nomenklatural lifestyles.

Another concerning fact is that the Omission shares the ANC’s mistrust of “our people”, not trusting them to be able to choose between the offerings.

What is next?
Forcing cell phone companies to offer standardised, uniform packages so that we aren’t bewildered by choice?
Eliminating private schools?
Forcing everybody to use the same security company, and while we are at it, nationalise it and incorporate it into SAPS?
And since we should not trust the lumpen citizens and Choice Is Bad, force all political parties to offer the same policies. Better yet, emulate their idols and have a one-party state, with everybody in Mao uniforms.

They have raised some valid points, but say that healthcare costs have increased by 9%, 10% a year and this according to this commission is causing consumers to pay more for something that for which members get less value a year?

Ok so what is the 15% a year electricity increase that the healthcare sector has to absorb? The 30% fall in the value of the currency since 2014? The 5 fold increase in municipal rates since 2000?

Aren’t these costs the healthcare sector has to absorb?

The 50% increase in petrol costs since 2014? The December 2014 petrol price was R11.02. It’s R15.83 currently – a lot of it is tax. VAT has increased by 1%. The Rand has fallen by 30%+ since 2011 due to SOE bailouts – R50bn+ a year. Medicine is imported with our Rand, medical machines are imported. Petrol is used to transport people and equipment.

So aren’t these private sector healthcare costs that are determined actually by government’s actions in the FREE MARKET? Aren’t the private sector currently absorbing these costs? It seems in this environment of high costs and non-performance, only the private sector is growing – having added 3 million more beds?

Prices should come down if there’s a free market in South Africa in the cost determinants of healthcare, but the government is doing everything in its ability to stop the free market from functioning: delaying urgent economic reforms to the electricity sector, partially privatizing and listing SOEs on the JSE, to lowering business taxes etc. as asked by the credit ratings agencies, IMF, World Bank, foreign investors, local investors, businesses….

Personal income taxes are 13% in Russia ( in 2019 ).
Business taxes are 14% in Russia.

That’s in the ex-Soviet Union.

Well summarised, if only the government focused on the inputs that they directly control they wouldn’t need to stick their grubby paws into the private sector. It would be interesting to see just how much taxes are collected from this sector which will be all but foregone once NHI is in force.

I wonder whether the Competition Commission will release the data that underpins its conclusions. To reach the conclusion that there is supply-induced demand for healthcare in the private sector in SA is startling to say the least. This means they believe they have data that prove that patients are submitting to, or even requesting, hospitalisation when they do not need it in view of their disease burden. This is bizarre. With the exception of cosmetic surgery, nobody goes into hospital because there is a supply of healthcare services available. It’s not like giving a newly opened restaurant a try. Unless they have watertight data to back this up, which I would doubt, it’s a ludicrous claim.

There are some things that they got right – for example, pointing out that there had been unintended consequences of the Prescribed Minimum Benefit regime, with healthcare providers abusing this, especially in emergency situations when there is no obligation to use a network provider. What allowed this situation to exist? The Competition Commission decided in its wisdom that it was illegal to have guideline tariffs for procedures / interventions and that doctors should compete for business on cost! So they have only themselves to blame. Sadly, the regulator has unmasked itself as a political, not a consumer-protection, organ of the ANC government. Surprise, surprise – the solution is more regulation by a manifestly dysfunctional state that cannot manage its existing responsibilities…

When doctors were fined for “price collusion”, it was in the ridiculous belief that competition will drive prices down. The opposite happened, due to the undersupply of doctors and this apparently came as a surprise to them. Caviar communists only have their own Armani and Gucci clothes in their sights. The money pools are drying up and the money in Medical Aid reserves now has them salivating. If your life is the price you are willing to pay, by all means support the NHI. You will not be able to purchase medical services anyway.

6 wasted years.

Public healthcare has failed us.

I would love to see a follow up article putting the question to the panelists of the Inquiry as to whether they use Public or Private healthcare facilities, and their reasons for doing so. My bet is that they ALL use Private Healthcare. The Private facilities are no angels for sure – they exploit to the full. But what they are exploiting to the maximum is the utterly useless Public Healthcare system. The Competition Commission should inform the public, who they allegedly work for, why the Public Health Sector is not providing the required Competition to keep the Private sector in check (another question for that article please). Or perhaps they feel that the Public Sector is up to acceptable standards? Are they prepared to venture an opinion? What do they feel about the common reaction from most commentators here that the Commission should delve into the level of delivery rendered by the Public Health Sector before wasting anymore time & money on this exercise trying to justify the grandiose NHI – the sole reason for the report they produced, which they surely acknowledge – or not?

According to the CompCom the private healthcare is “failing consumers” due to poor value we supposedly receive.

This argument can be slung against MOST industries in SA. Take the local vehicle manufacturing industry: our new vehicles are surely over-priced, not so(?) Want proof that BMW/Nissan/VW/Ford/Merc etc is “failing” the consumer?

Examples?

Over R450K for entry-level BMW 1-series. Seriously?!
3-series BMW around R500-600K mark. You gotta be kidding me!
No new Audi under R300K. No…!
New Merc? You’re lucky to find something with R500K for starters!
Cheapest Ford Fiesta….R270+K
R300+K for an entry-level Golf7. What?!
Oh wait…price of Double Cab bakkies or T/Fortuner? Let’s not even go there!

If the NHI was in control of SA’s vehicle industry, a Golf7 should cost say R120K brand new, a Polo around R90K, 3-series BM say R150K…a Double Cab 4×4…R170K brand new should not be too much to ask for?
…..err….yes, we DO HAVE such a car for you Michael..HERE’s YOUR brand new DONKEY CART! (no maintenance plan….just a complimentary 3 yrs supply of carrots, or for 150,000 trots)

You see….new vehicle prices in SA suddenly make medical procedures appear very reasonably priced 😉 Yes, we complain it costs a lot, but a car is still better than the mostly unavailable MetroRail.

Cars are over-priced locally because of tariffs and trade barriers to subsidise and prop up our otherwise uncompetitive domestic motor industry. There is no read-across from this bad situation to the private healthcare market, unless you are arguing that tariffs on imported medical equipment and drugs are a material part of the cost pressure.

@SARepatriate. I agree with you 100% & glad you mentioned the word “uncompetitive”. This uncompetitiveness is strewn across the whole South African landscape (…I wonder why?)
If we had to design & manuf our own medical equipment for our own tiny market, the cost would be completely unaffordable. The best deal is to import equipment from efficient markets abroad…..pity about the ZAR though 😉

I for one and super happy with the vehicle miss pricing, keep our vehicle costs ultra high, it keeps people off the roads. Just imagine your traffic, if vehicles were affordable for the average South African… Total chaos…

Let’s all hop across to the ‘dog treatment’ dished out in the public healthcare sector.

About the training of medical doctors – how does working two 36-hour shifts per week as an intern, community service doctor and also during training as specialist (for up to 4 years) sound?
Do we deserve the doctors we have?

I would rather be ripped off and come out alive by private care than subject myself of my family to ANC-health care. Like the nomenklatura, who avoid the state health care they provide to “their people”.

Incidentally, while the report waxes hysterically on the lack of competition amongst hospital groups and medical aids, the Competition Omission has no problem with SA’s worst monopolies, Eskom, the unions, SAA, Transnet, etc

See a lot of complaints about medical aid costs. Has anyone tried either self-insuring (good luck with that), or medical insurance that covers catastrophic items?

I’ve only found insurance that pays out with a cap, but I want insurance that pays out only for large claims with a big excess (say after R300k excess) and self-insure the rest, any recommendations?

….for self-funded major costs exceeding say R500K….maybe get such procedures performed in other 3rd/2nd world countries (which have a good healthcare system, while the exchange rate is still bearable). Ecuador? Thailand? Philippines? Georgia? (…if you have proper money like Mad Bob had…go Singapore)

Major op could end up cheaper, even if one add in return flights & accomm.

(*lol*….maybe, save more money, and make it a non-return flight. Basta!)

If the above fails, approach Bonitas(?)

Yes I’ve heard Thailand, Malaysia, Taiwan have good systems for great cost.
Just need to find an insurer that’s willing to cover if it costs millions.. which is also the original purpose of insurance – cover things that are ruinous, not you new cellphone…

I remember three years ago I became very very ill and nearly died. My medical bills topped R1.2 million rand. Had I been forced into the public healthcare I would be dead. So I was happy to pay my medical aid every month. I was grateful that I didnt have to pay NOT one cent towards my hideous illness. I kept my house, my car, my money. So its not one sided, if you become very sick you are going to want to be cared for and treated by doctors and specialists who can save your life. Dont bash the doctors, I am forever grateful for my surgeon and his team that saved my life on more than one time with 11 surgeries. Our Government is the cause of all the high cost of medical BECAUSE we have a weak rand and every time hippo mouth open his mouth the rand tanks. Medical inflation goes through the floor every time. Its not the private medical industry to blame its government. We have low IQ who have an IQ of 69 in charge ad THIS is the reason public health has failed….I want my private medical aid, it has served me well.

Do you still want it if medical inflation runs at 10%? In 3 decades I would be paying more than salary at that point exactly when I need it most…no-one will argue with you that it is fine at present. It’s the future that is a big problem (globally, private, and public) on medical costs.

Health care is a grudge purchase, so I doubt there will be too many people protesting that private hospitals should get paid more when a room (ignoring intensive care) already costs more than a 5 star hotel, or that doctors should be paid more or medical aid administrators earn even more.

We are not cost efficient at present.

Like it or not, the model where middle and upper income citizens get tax credits and deductions for money spent on private providers WILL disappear. The government cannot prop up their grossly incompetent public health and pay towards private health care.

I don’t see a good outcome any direction.

End of comments.

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