Medical schemes welcome probe into costs

Health Minister Aaron Motsoaledi has declared war on high healthcare costs and accused the private healthcare sector of engaging in "uncontrolled commercialism" and "destructive, unsustainable practices".

Last year deputy commissioner Tembinkosi Bonakele said the competition was "likely" to start with an inquiry because of growing concern over the high cost of private healthcare and the effect this had on the public healthcare system.

However, attempts yesterday, 3 July 2012, to obtain comment from the commission were unsuccessful.

The surveyed medical schemes cover half of the industry's principal members in SA. The study highlighted healthcare costs as the most pressing concern facing their businesses, with 57% saying the investigation by the commission "could be useful" and 38% claiming it was long overdue.

Respondents said medical inflation, which was "higher than CPI (consumer price index)" made healthcare "unaffordable".

Dr Motsoaledi has said he is intent on regulating private healthcare sector prices to contain costs and provide certainty to funders - including medical schemes and the state.

The government believes the two-tiered healthcare system in SA is not sustainable.

However, the majority of the respondents surveyed (60%) said SA's system was sustainable, although they acknowledged a deterioration in healthcare.

But they said the National Health Insurance (NHI) would not necessarily resolve the current state of healthcare services.

The NHI aims to provide universal access to quality healthcare, although critics have questioned the plan's affordability and the current state of public hospitals.

The government has allocated R150m for the 2012-13 fiscal year, which is intended to improve district health facility management and hospital revenue collection, and raise the standard of patient care, in preparation for the NHI.

But "NHI alone is not the solution as working conditions need to be improved, primary healthcare has to be revived (and) pharmaceutical distribution for state-owned facilities should be decentralised," the respondents said.

Ilse French, PwC's medical scheme's leader for Southern Africa, yesterday cited regulations and "excessive interference by the Council for Medical Schemes " as the main challenges facing the industry.

"The medical schemes say there is too much interference by the (council)."

However, Boshoff Steenekamp, a strategist at the Council for Medical Schemes, said: "The cost of healthcare is a major issue in many countries in the world ... not regulating is not an option. Free markets don't work in healthcare, it doesn't work anywhere in the world."

Respondents were also concerned the NHI would worsen this "excessive" regulation. French said: "The NHI will make the industry more complex, and many schemes do not believe regulation will level the playing field."

Source: Business Day