Competition commission: Lawyer warns against price regulation for private healthcare

2013-10-30 08:47

The Competition Commission may find itself in a compromising situation if it forges ahead with plans to look into price regulation and make recommendations on this contentious issue during its probe into the cost of private healthcare.

This is according to Anthony Norton, who specialises in a range of regulatory issues, including competition law, healthcare regulation and consumer protection.

Speaking at the Hospital Association of South Africa conference in Cape Town yesterday, Norton cautioned the commission against “getting into this terrain because it might raise questions about its independence”.

“The commission is supposed to be an independent institution that pursues free and fair competition in markets. For it to simultaneously intervene in markets through price setting, possibly towards uncompetitive outcomes ... would be contradictory,” he said.

The Competition Commission is planning to launch a market inquiry into the private healthcare sector next month.

The inquiry is aimed at finding out how the private healthcare sector decided on how it charges patients for service; what led to exorbitant increases in private healthcare costs in the last few years as well as to make recommendations on whether there needs to be some form of price regulation in the sector.

The probe will be similar to that which was launched into the banking sector in 2006.

Currently private healthcare users don’t know what they will be charged by hospitals for treatment and admission. There are also unconfirmed claims the costs have doubled in the past five years which has resulted in exorbitant increases in medical contributions.

Norton pointed out that while this was an important exercise for the Competition Commission, it needed to draw a line of independence between it and the state.

He said: “Once it makes a recommendation that the private healthcare sector needs to be regulated it cannot go back on that.

“The minister (of health) may have to come with legislation and it could have unintended consequences for the industry,” Norton said.

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