Comments on healthcare funding probe

Interested parties had until Tuesday (25 June) to respond to the draft terms. The commission will - from now until the end of next month - consider the comments before finalising the document.

The commission expects the final terms of reference to be ready for publication by the latest in the middle of August. The terms of reference set out the scope of the inquiry after the commission identified factors that gave it reason to believe there were features of the private healthcare market that might "prevent, distort or restrict competition".

The commission said on Thursday (27 June) it received comments from the hospital groups, government departments and regulators, medical funders, trade unions, patients and medical associations.

Neil Kirby, a director at law firm Werksmans Attorneys, said the firm commented after a "vigorous interrogation" of the terms of reference.

He said it was broad, vague and difficult to understand what the commission was trying to achieve.

Costs and prices

He said there was no clear link between the market inquiry to other "pricing issues" in the healthcare and the proposed National Health Insurance.

The absence of the public healthcare sector from the inquiry is also concerning as the commission will in effect be looking at only one half of the sector.

"The commission has to be careful that it does not slip into a tariff-setting process. The Department of Health is desperate to introduce tariffs that can influence prices and has tried to do so, but has failed.

"A market inquiry that is perceived to be based on vague terms of reference or that it is a tariff-setting exercise will create discomfort in the market," Kirby said.

He said one of the major problems with the draft terms of reference was that these did not clearly state what was preventing competition in the market. The commission said the final terms of reference would include an administrative timeline, the staffing of the inquiry team, including the appointment of a chairman and inquiry panel members as well as the drafting of the first round of information requests and the scheduling of the first round of public hearings, which is likely to start by the end of October this year.

Advocacy group Section27 said in its submission that it agreed with the commission's decision to exclude pharmaceuticals from direct scrutiny, as the sector was already regulated.

"While the regulatory framework may not be perfect, it has succeeded in stabilising the price of medicines. It is not possible for an inquiry of limited duration and resources to deal with every part of the complex health system," Section27 said.

"In our view the commission is correct in focusing on cost drivers such as hospitals and specialists, whose prices are unregulated and which have been shown to be relatively high in the private healthcare sector," it said.

Section27 said the commission should consider including an assessment of the effect of the Health Professions Council of SA's duty to establish ethical tariffs for healthcare professionals.

Source: Business Day via I-Net Bridge