Health market inquiry too lenient, says Nehawu
Competition Commission said to have failed to provide ‘recommendations with teeth’
The recommendations of the health market inquiry, released a week ago are problematic and need to be strengthened, the National Education Health and Allied Workers' Union (Nehawu) says.
Nehawu, trade union federation Cosatu’s largest affiliate with more than 280,000 members, said it was in talks with the Competition Commission with a view to giving the recommendations some sting.
At a media briefing in Johannesburg on Monday, the Nehawu leadership said the Competition Commission failed to provide “recommendations with teeth”.
Nehawu’s policy head Sidney Kgara said: “The recommendations are problematic. They were disappointing at many levels. They are coming up with a lot of bureaucratic structures instead of trying to streamline the integration of the health-care system.”
Nehawu general secretary Zola Saphetha said the inquiry was “lenient” with those who contravened the law, noting: “We are speaking to the Competition Commission to restrengthen them [recommendations] because we want to see consequences.”
Saphetha said the private health-care sector was monopolised by three groups which meant they were able to “willy-nilly impose higher tariffs on patients in their narrow focus on profit margins rather than the health and wellbeing of the sick”.
“In this regard, the Competition Commission itself has failed in its duty in allowing mergers and acquisitions of smaller hospitals by these monopoly giants more than the years.”
The 256-page health-market inquiry report initiated in 2013 to probe increases in health-care prices in the private sector, found that the private health-care sector was dominated by three administrators: Discovery, Medscheme and MMI Health.
These collectively accounted for more than 80% of the administrator market, resulting in high barriers to entry. It was also found that Netcare, LifeHealthcare and Mediclinic accounted for 90% of the private hospital market, with Discovery Health medical scheme being the largest scheme in the open scheme market, followed by Bonitas.
The inquiry, chaired by former chief justice Sandile Ngcobo, recommended, among other things, that to improve governance and to align schemes’ interests with those of consumers, the remuneration packages of executives, principal officers and trustees be linked more explicitly to the performance of the schemes.
The schemes were called upon to encourage greater member participation in annual general meetings. The inquiry also noted that the “exclusionary nature” of provider networks could, in some instances, result in the exclusion of efficient competitors and raise the barriers to entry.
It was recommended that practitioners should have the option to opt-in or out of open networks provided they adhere to a predetermined notice period of between three and six months.