Discovery’s robust health a sign of market failure, says competition inquiry
There is a high level of concentration in the medical schemes and private hospital markets, according to the findings of an inquiry into the private health care market. The provisional report of the inquiry, launched over four years ago by the Competition Commission, was released on Thursday by its chairman, former chief justice Sandile Ngcobo. It noted that of the 22 open medical schemes, two schemes held about 70% of the market — with Discovery Health Medical Scheme making up 55% in terms of the number of beneficiaries. There are 16 medical scheme administrators, but Discovery Health and Medscheme accounted for 76% of the market based on gross contribution income. The inquiry concluded that competition in the medical aid scheme market could be much improved "if transparency, accountability, supplier-induced oversupply of care, and value-driven healthcare were priorities of scheme trustees and administrators". "We have not noted any existing players seriously challenging the domina...
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