The Board of Healthcare Funders (BHF) will approach the Competition Tribunal to set aside a Competition Commission decision to reject its application to allow medical schemes to collectively negotiate tariffs with healthcare providers.
The BHF on Monday said the commission’s decision was a blow to efforts to reduce the cost of private healthcare, particularly at the lower end of the market.
“This decision comes after it was brought to our attention that the department of health and the Council for Medical Schemes (CMS) did not support the BHF’s application — an alarming stance, given the potential of this exemption to significantly reduce private healthcare costs and make medical scheme coverage affordable for millions of South Africans,” the BHF said.
“Furthermore, the Competition Commission’s refusal to allow BHF members to negotiate tariffs collectively is perplexing in light of this being one of the key recommendations in its own health market inquiry (HMI) report, published in 2019, to bring down private healthcare costs.”
The BHF’s more than 30 members include Bonitas, the Government Employees Medical Scheme and Medshield.
Business Day reported on Monday that the commission had rejected the BHF’s application to have its members exempted from section 4 of chapter 2 of the Competition Act — an instrument that prohibits agreements between competitors that lessen or prevent competition in a market.
The BHF had asked the competition watchdog to enable its members to make collective submissions to regulators and government bodies and to collectively negotiate with healthcare service providers with respect to prescribed minimum benefits — a collection of specified healthcare benefits that medical schemes must cover by law.
One of the reasons advanced by the commission for rejecting BHF’s application was that BHF’s members were competitors in the provision of medical scheme services and the exemption sought would lessen competition.
The BHF said the commission’s decision showed a lack of commitment to reduce the costs of medical aids.
“Despite the Competition Commission having been presented with the opportunity to bring down private healthcare costs in the country, it dragged its feet on making a decision for over three years before rejecting the application on spurious grounds,” it said.
“This includes its argument that allowing the exemption would lessen competition in the medical scheme industry. This concern was addressed in the BHF’s application, which indicated that it would be happy to include a third-party observer in negotiations to ensure pricing was determined fairly and transparently.”
One of the findings that flowed from the health market inquiry, chaired by former chief justice Sandile Ngcobo, was that the private healthcare market in SA was characterised by high and rising costs of healthcare and medical scheme cover, and significant overutilisation without stakeholders having been able to demonstrate associated improvements in health outcomes.
The report found that the focus on catastrophic cover to the exclusion of primary healthcare has promoted “hospi-centric” care.
The BHF said with about 68% of medical scheme beneficiaries coming from previously disadvantaged groups, allowing medical schemes to collectively negotiate tariffs with healthcare providers “and make this information public would lead to lower medical scheme contributions for these hard-working South Africans” and would ensure broader access to private healthcare in the country.
In a separate matter, the BHF will on Tuesday lock horns with the CMS, with the organisation trying to compel the regulator to allow medical schemes to offer low-cost benefit options (LCBOs).
“Despite the CMS passing a resolution in August 2015 to adopt a framework for LCBOs to be offered by medical schemes, it has failed to give effect to it for the past 10 years.
“In their responding affidavits, the CMS and the department of health have cited that the delay in implementing LCBOs is due to the government’s National Health Insurance (NHI) rollout,” the BHF said.
“As the BHF, we strongly believe that healthcare is not a future need — it is a current need. Millions of South Africans require solutions today, not years from now.”
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