Picture: istock
Picture: istock

Afrocentric Health’s complaint that Discovery Health Medical Scheme (DHMS) and its administrator, Discovery Health, breached the Competition Act by collectively bargaining for better tariffs with private hospitals has been dismissed by the Competition Tribunal.

The tribunal’s decision, announced on Friday, means the status quo is unchanged.

Discovery Health will continue to carry out negotiations on behalf of DHMS and the 18 closed schemes it administers in much the same way as it has done to date. Closed schemes are restricted to employer or professional groups.

The tribunal upheld objections brought by Discovery Health and DHMS and ordered Afrocentric to pay costs.

Afrocentric owns medical scheme administrator Medscheme, which competes with Discovery for medical scheme clients. DHMS is SA’s biggest open medical scheme.

Discovery Health CEO Jonathan Broomberg welcomed the ruling and said: "We have consistently maintained that nothing in our conduct contravenes the Competition Act and that our negotiations with hospitals and other providers are of significant benefit to the members of all the schemes under our management."

Afrocentric spokesman Kabelo Letebele said the group was studying the ruling in order to determine its next steps.

"The Afrocentric group’s objective has always been to ensure fairness and to reduce costs of healthcare for our administered schemes and scheme members — any decision to take this matter forward will be informed by this objective," Letebele said.

Afrocentric first laid a complaint against Discovery Health and DHMS at the Competition Commission in June 2014, alleging that Discovery Health had used DHMS’s dominance of the open medical scheme market to negotiate identical tariffs for all the schemes it administered.

The commission declined to refer the matter to the tribunal.

Afrocentric then took the matter to the tribunal directly and asked to add 15 restricted medical schemes, which were at that time administered by Discovery Health, to its case. It lost its bid to widen its case and forged ahead on its own.

The tribunal then ordered Discovery and DHMS to
bring their exception application to Afrocentric’s self-referral of the complaint.

The tribunal said on Friday that Afrocentric had made a critical concession in its complaint to the Competition Commission, that open and closed medical schemes did not compete with each other.

Yet in its submission to the tribunal, it alleged that Discovery Health constituted an "association of firms" that colluded by appointing Discovery Health as their administrator.

kahnt@businesslive.co.za

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