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What to expect from Health Market Inquiry findings?

All eyes are on whether the inquiry’s provisional report will make recommendations on the role of private hospitals in driving above-inflation costs.
A contentious issue that the inquiry will likely make a recommendation on is the role that private hospitals play in driving up healthcare costs. Picture: Supplied.

The seriously delayed Health Market Inquiry, which is tasked with probing the cost drivers of SA’s private healthcare market, is now set to publish its provisional findings and recommendations in a report on July 5.

It has been slow going for the inquiry since its start four-and-a-half years ago. And its conclusion – originally earmarked for December 2015 – is still pending. Headed by former Constitutional Court Justice Sandile Ngcobo, the inquiry’s mandate was clear from the start: probe the dynamics in the private healthcare market and determine whether there are barriers to competition and patient access.

So contentious has the inquiry been that the deadline to publish its provisional report has been shifted four times since November 2017 due to obtaining and analysing complex information supplied by medical schemes and private hospitals.

The inquiry has also suffered objections from large hospital groups – Discovery, Netcare, Mediclinic SA, and Life Healthcare – which have taken umbrage with the publication of supposed confidential data and argued that it would be unfair to publish a provisional report without analysis reports. Although the inquiry resolved the dispute with Netcare, Mediclinic SA, and Discovery, Life Healthcare continued to object to the treatment of confidential data in the report. This scuppered plans by the Inquiry to publish its report on June 28.

Life Healthcare withdrew its concerns about the confidentiality of data at the last minute, paving the way for the inquiry to push ahead with its new deadline of July 5 for making the report public.

Expectations

A contentious issue that the inquiry will likely make a recommendation on is the role that private hospitals play in driving up healthcare costs. The inquiry has already said that hospitals are responsible for a big portion of above-inflation increases in expenditure reported by medical schemes for their members.

An extensive analysis of medical schemes claims data by the inquiry revealed that the average private medical scheme spend per member increased by 9.2% per annum for a five-year period from 2010 to 2014. This was nearly four percentage points higher than average consumer price inflation over the five-year period of 5.6%.

After taking into account changes in medical scheme members’ plan type, gender, disease profile and membership movement, there was an unexplained increase in spend per member of more than 2% per annum after adjusting for inflation.

“To put this in context, 2% of spending amounts to around R3 billion in 2014 terms i.e. R330 per beneficiary per annum, or a total of R1 650 per beneficiary over the five-year period studied [2010 to 2014],” the analysis read.

The unexplained cost increase appears to be for out-of-hospital care (7.28% cost increase vs 5.6% inflation) while in-hospital care is a far more important driver (a 10.84% increase vs 5.6% inflation). The analysis also revealed that hospital tariffs had not increased much above inflation, but there was a significant increase in the average cost per admission.

Defenders of the industry have argued that private healthcare costs have increased due to increased utilisation by members and not price increases.

Dr Mzukisi Grootboom, chairman of the South African Medical Association (Sama), said the report should also make recommendations on medical specialists and medical schemes. “The inquiry needs to look at how members [are] affected by medical schemes rules. It needs to examine whether their rules are conducive to the competitive nature of the industry and whether the use of brokers and administrators are responsible for high medical costs.”

Sama is SA’s biggest doctor organisation, with members employed by both the public and private sector.

Carl Grillenberger, group CEO of day clinic specialist Advanced Health, said he looked forward to the report’s recommendations on private healthcare patients being informed about the quality of service in relation to cost. This is currently not done by medical schemes, he added. “There must be an environment of transparency. Medical schemes have information on quality at their disposal.”

After the release of the provisional report, the industry and public will have an opportunity to comment on it. After the comment period, the inquiry will produce a final report, which will contain recommendations to the minister of economic development, Ebrahim Patel. “[The recommendations will be] on areas that need to be addressed on the state of competition in the private healthcare sector,” said Clint Oellermann, director of the inquiry.

Administrative fines or even criminal charges might be recommended for parties that are found to be engaging in anti-competitive behaviour or collusion.

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O my goodness, this is sooo long overdue. Can any organisation please do a similar investigation into vet fees – some vets seem to charge exhorbitant fees – no wonder many people do not take their animals when needed for treatment.

Runaway fire in the forest.
Netcares move to scupper BMI healthcare may rather be the reverse:
property rights in SA under threat
a holy smoke eminating from the compcom report
NHI/MA legislation will put heir margins here under serious pressure
BMI is not on London SE , just wonder what % shares Friedland et al holds over there
Neat move , neat disinvestment in Netcare SA troubles.

Did not follow the Old Mutual thingy , could it be a similar pre-emptive move?

If the ANC-in-Government were serious about rolling out decent health care to the masses (not a given since they, as Winnie Madikezela did, can afford private hospitals) they would:
• Focus on fixing the current healthcare mess as a first step
• Realise that good healthcare is related to good education: it is today’s schools that supply tomorrow’s doctors, nurses, hospital clerks, physios, pharmacists, radiographers, etc etc and teach future parents about diet, lifestyle, biology and so on. Fixing the school system would be a next step
• There is no doubt that health, including life expectancy, is linked to the environment. Not just air- and industrial pollution but sewage, drains and clean running water. From Kasrils to Mokonyane, the ANC has put third rate ministers in charge and simply abandoned the “dirty voters” to their mess.

Since there are signs of this changing, we draw our own conclusions

End of comments.

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