Commission starts inquiry into healthcare costs

2014-08-10 15:00

Formal investigations into the cost of healthcare in South Africa have finally started as part of the Competition Commission’s long-awaited inquiry.

The wide-ranging inquiry, led by retired Judge Sandile Ngcobo, seeks to establish the underlying reasons for the dramatic increase in private healthcare costs over the past decade.

With terms of reference encompassing every aspect of the private healthcare sector – from medical aids, administrators and brokers, to doctors, specialists, hospital groups, and drug and equipment suppliers – there is concern that the commission may not complete its work by the deadline, which is November next year.

These fears were heightened when the private hospital group Netcare filed a suit against the commission and its technical partner, KPMG, late last year, ostensibly because it feared KPMG would give confidential information obtained while doing work for Netcare to the commission.

A ruling in this matter is pending in the South Gauteng High Court.

Heidi Kruger of the Board of Healthcare Funders said: “We agree that the deadline is tight.

However, we believe that the commission should not compromise the inquiry, but rather take the time it needs to complete the work fully, even if it takes a bit longer.”

Nongovernmental organisations Treatment Action Campaign and Section27 have both criticised Netcare’s lawsuit as an attempt to frustrate the commission’s work, although Netcare has denied this was the case.

The inquiry director, Clint Oellermann, acknowledged that Netcare’s lawsuit had affected the inquiry because it had to identify and appoint alternative service providers as a result.

“The work of the inquiry must go ahead, and has gone ahead, although the commission has had to put considerable time towards putting in place alternative arrangements to facilitate the work of the inquiry,” he said.

He added that KPMG’s skills and expertise were “still considered important for the investigative phase of the inquiry”.

Oellermann said the panel was bound by the time frames of the terms of reference, but the commission had the power to extend the inquiry if necessary.

The panel stated earlier this year it would investigate various relationships in the private healthcare sector. Among the factors it would consider are:

.?The powers different players in the industry have over one another, and how these influence costs and prices;

.?The relationships between hospital groups and specialists, including shareholdings and access to specialised equipment;

.?Existing arrangements that prevent new players from entering the market;

.?How existing laws and regulations influence behaviour of different players in the market; and

.?Whether insufficient information, such as advice provided by brokers aligned to certain medical funds, or from doctors or specialists regarding available treatment options, may influence the choices patients make.

The inquiry is receiving written submissions between now and the end of October.

It will then consider the submissions until the end of January, with public hearings scheduled for March and April next year, followed by analysis of the information and targeted public hearings from the beginning of May until the end of July.

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