Government’s knee-jerk rection to implement the recommendations of the Health Market Inquiry will not do much to improve access to healthcare.
The Universal Healthcare Access Coalition believes that the legality of the DTIC’s decision to implement only minor selected recommendations of the Health Market Inquiry is questionable while implementing any of the recommendations falls under the minister of health and not the DTIC.
Only full implementation of the Health Market Inquiry (HMI) that was finalised in 2019 to address high costs of private healthcare will advance urgently needed reform of public as well as private healthcare, the Universal Healthcare Access Coalition (UHAC), a broad-based alliance representing the majority of SA’s healthcare professionals and funders, says.
UHAC was responding to trade, industry and competition (DTIC) minister Parks Tau’s invitation for public comment on draft regulations to facilitate tariff negotiation in the private healthcare sector.
The “draft interim block exemptions” would exempt medical schemes and private healthcare providers from the Competition Act’s ban on collective bargaining and set up a multilateral negotiating and price-setting body overseen by the department of health.
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Legality of ‘block exemption’ approach questionable
Dr Mvuyisi Mzukwa, steering committee member of UHAC and chairperson of the Medical Association of South Africa, says UHAC questions the legality of the “block exemption” approach and control of the tariff-setting process by the department rather than an independent body, as well as the effectiveness of a piecemeal approach to implementing the HMI recommendations.
He points out that the proposed multilateral negotiating forum excludes tariffs for private hospitals and other private healthcare facilities although these are responsible for most healthcare costs and inflation.
According to Tau, the aim of the regulations is to contribute to realising the constitutional right of access to healthcare and put a check on private healthcare costs to ensure the majority of South Africans have access to affordable healthcare.
However, Mzukwa describes this decision as one-sided and ineffective to improve access to private healthcare while it does not address the need for integration of public and private healthcare.
“It is a fact that we need better regulation of the private healthcare sector, including on how tariffs are determined. Controlling the costs of private healthcare is a vital component to achieve equitable access to healthcare, but government’s contention that this will ensure affordable healthcare for the majority of South Africans is a fallacy,” he says.
“The reality is that only about 15% of South Africans are members of a private medical scheme and even if prices decrease significantly, the majority do not have sufficient income to pay for healthcare in any form, regardless of price.”
Mzukwa points out that a tax-funded free public healthcare service will always cater for the majority and not medical schemes. “The only possible framework for the South African context is for both systems to work together to ensure universal healthcare access for all levels of income and non-income earners.”
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Regulations beyond scope of Competition Act
UHAC steering committee member, Prof Alex van den Heever from the Wits School of Governance, says the use of an exemption provision to the Competition Act to manage health policy was questionable and likely open to court challenges.
“The regulations gazetted by the minister of trade, industry and competition not only provide for price-setting but also introduce a framework to assess treatment protocols and quality of care that are self-evidently beyond the scope of the Competition Act, which is not enabled to make pronouncements on issues of health care.”
While the Health Market Inquiry recommended an independent body to steer private healthcare tariff negotiations and adjudicate disputes, the minister of health has said that this function will be managed by the department, which Van den Heever argues is not independent and is likely to be tied up in legal challenges and delay yearly tariff announcements.
Van den Heever says these are health policy issues which fall squarely under the jurisdiction of the minister of health and has nothing to do with trade, industry and competition. It is the minister of health who must establish a positive legislative framework to implement the recommendations of the Health Market Inquiry.
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Implementation of some recommendations ‘stop-gap measure‘
Dr Aaron Motsoaledi, minister of health, described the move as an “interim stop-gap measure” to tackle rising costs of private healthcare ahead of implementation of National Health Insurance (NHI).
UHAC maintains that the NHI is unimplementable and has developed a proposal for healthcare reform which offers a pragmatic, financially viable and sustainable route to achieving equitable, quality and affordable universal healthcare access, with more than 30 healthcare professional organisations as signatories.
“There is a flawed mindset behind this interim approach. The department of health refuses to put a permanent system in place to manage and regulate private healthcare because it is working on the assumption that somehow, in three years’ time, we will have a completely new healthcare system that replaces both the current public and private systems and pays for everything.
“This is implausible. It is not going to happen,” Dr Aslam Dasoo, UHAC steering committee member and convenor of the Progressive Health Forum (PHF), says.
“The Competition Commission was responsible for the Health Market Inquiry which investigated competition and price setting in the private healthcare sector. It was clear in its recommendations in 2019 that they involved an integrated package of measures designed to achieve systemic change in how the sector operates and create a pro-competitive environment. Piecemeal measures would be insufficient.”
He also points out that although the report and its recommendations are already five years old, government only now talks about its implementation as urgent, while lacking a comprehensive, integrated response that could have been developed over the last five years.
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Government pursuing watered-down version of recommendations
Dr Simon Strachan, UHAC steering committee member and CEO of the SA Private Practitioners’ Forum (SAPPF), says government was instead pursuing a fragmented, watered-down version of the recommendations.
“The Health Market Inquiry chair, former chief justice Sandile Ngcobo, emphasised that market failures may persist if a partial approach is taken to implementing the recommendations, yet this is exactly what government is now doing.
“The report made it clear that the systemic weaknesses in private healthcare were due to government’s failure of stewardship for over 20 years, including failure of the department of health to use its existing legislated powers to manage the private healthcare market and hold regulators accountable.
“As a result, we have a private healthcare sector that is neither efficient nor competitive. The department of health’s latest response to the findings will neither enhance competition, nor improve protection of consumers.”
He points out that the minister of health is silent on all the other recommendations, such as the need for a risk equalisation framework, processes for regulating hospital licensing, quality assurance and measuring the outcomes of patient care and ensuring the independence of supplier regulation and tariff-setting bodies in order to guard against political interference.
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Mzukwa says that UHAC recommended that the flawed block exemption approach be scrapped and that government instead take immediate action to implement the full recommendations of the Health Market Inquiry, which provided “a detailed, evidence-based roadmap for addressing healthcare pricing and market distortions”.
