Private sector reforms vital for NHI, says health market inquiry
The health market inquiry's final report still recommends measures to manage costs and quality, but no longer calls for divestiture in the private hospital sector
The far-reaching recommendations made by the Competition Commission's inquiry into SA's private healthcare market will provide for a better environment in which to implement National Health Insurance (NHI), it said on Monday.
The NHI is SA's policy for achieving universal healthcare, and envisages the state purchasing health services on behalf of patients from accredited public and private-sector providers.
A better-regulated private healthcare sector will enable strategic purchasing of services by the state, with greater certainty about pricing and quality, it said.
The Competition Commission's health market inquiry began work in January 2014, and was tasked with investigating the dynamics in the private healthcare market and determining whether there are barriers to effective competition that hamper patients’ access to care.
Its final recommendations have potentially far-reaching implications for private healthcare providers ranging from hospital groups to doctors, as well as the medical scheme industry which funds access to their services.
The recommendations are also likely to influence the health department’s plans to amend the Medical Schemes Act, a process that was placed on hold pending finalisation of the panel’s work.
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The final report is broadly consistent with the panel’s provisional findings published in July 2018. It still finds a range of features that distort and prevent competition and recommends regulatory measures to manage costs and quality, but it is no longer calling for divestiture in the private hospital sector.
The five-member panel, headed by retired justice Sandile Ngcobo, has recommended the establishment of an independent supply-side health regulator (SSHR) to oversee licensing, pricing and the quality of care in the private healthcare sector.
Panel member Ntuthuko Bhengu said in a media briefing on Monday morning in Johannesburg that the supply-side regulator is of particular importance for the NHI, as “we know the NHI will be purchasing from suppliers in the private sector as well”.
“The need to fix this now is essential,” he said.
Wits professor Sharon Fonn, another panelist, said that it was not a matter of making a choice between the health market inquiry and NHI, as there were a number of interventions that were not only helpful but necessary for the successful implementation of NHI.
“The health market inquiry provides mechanisms to make NHI possible and to make it a success. That's the big message,” she said.
The supply-side regulator will oversee multilateral tariff negotiations between healthcare practitioners and medical schemes, which will be referred to independent arbitration if negotiations deadlock. The SSHR will also advise on best practice, issue facility licences and practice numbers, and liaise with a new body that is to be established to monitor the quality of care, called the Outcomes Monitoring and Reporting Organisation.
It recommends that private hospitals do not participate in the multilateral negotiating forum, but continue to negotiate bilaterally with medical schemes.
It recommends that all medical schemes should offer a single, standardised benefit package that will allow consumers to compare products, and the introduction of a risk-adjustment mechanism to force schemes to compete on price and quality rather than on their ability to attract young and healthy lives.
The inquiry originally planned to publish its interim report in August 2016, with a final report slated for the end of that year, but extended these deadlines repeatedly due to a series delays. These included a legal challenge from JSE-listed private hospital group Netcare, difficulties in obtaining data from medical schemes and private hospitals, and budget constraints that forced the Competition Commission to pause several inquiries during the last quarter of its financial year, which ended on March 31.
Trade and industry Ebrahim Patel said health minister Zweli Mkhize would lead the healthcare policy work that would flow from the HMI’s recommendations. The report would be tabled in parliament, while industry role-players would also study the far-reaching recommendations, he said.
“The work that is being done on the NHI together with the work that is being done on the structure and functioning of private healthcare market will feed into a reform on health that will take SA into a new chapter,” said Patel.
The health department’s deputy director-general for NHI Anban Pillay said it would study the report, and consider how its recommendations aligned with the work it was doing to implement NHI.
The report would also inform work on the Medical Schemes Amendment Bill, which was delayed pending the outcome of the inquiry.
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