Answers: Why health bills are so high

2013-05-12 14:00

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Private healthcare in South Africa is heading for the dock.

City Press has obtained the terms of reference for the­ ­competition commission’s probe into the private healthcare sector, ­including medical aids.

The probe is set to start by September and the terms of ­reference are scheduled to be published some time in the coming week on the commission’s website.

The commission is not required by law to get public input into these terms of reference.

But deputy commissioner Trudi Makhaya said the scale of the probe meant they decided to publish the terms “in the interest of fairness and transparency”.

The inquiry is expected to take between 18 and 24 months to be completed.

The Board of Healthcare Funders (BHF), which represents 85% of all medical schemes in South Africa, welcomed the news that the terms of reference were about to be published.

But Dr Humprey Zokufa, the BHF’s managing director, ­cautioned: “The commission should not limit itself to two years to investigate what is an extremely complex environment.

“There is currently no transparency in the pricing of healthcare services and a lack of scientific ­approach in arriving at tariffs.

“These and other cost drivers within the industry need to be ­curtailed through reform.”

The probe will be similar to that which investigated the banking sector in 2006. That investigation resulted in lowered fees across banks.

The major difference though is that the commission now has the power to subpoena any individual or company to appear before the inquiry and compel parties to ­provide evidence.

It also has the power to lodge a complaint against a service ­provider or company based on ­information obtained during the inquiry.

Makhaya said she didn’t believe the commission would need to crack the whip though.

Engagement processes so far had been encouraging, she said.

This is what the commission will probe:

» What is driving the cost of private healthcare in South Africa;

» How prices are determined between service providers – like clinics, hospital groups and private specialists – and medical aids;

» The nature of the competition between South African medical aid schemes;

» Where the power lies in the relationship between service providers and medical aid schemes; and,

»Whether consumers have enough access to information about the cost of private healthcare to aid their choices

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