Medical doctors have been found to have contravened the Competition Act by taking advantage of centrally controlled pricing to manipulate medical aid reimbursements.
This was shared by the Minister of Health, Dr Aaron Motsoaledi, during a media briefing on health market inquiry in Johannesburg on Monday.
Motsoaledi said, according to the Competition Commission, medical practitioners are supposed to set their own tariffs rather than use the centralised tariff system where there are no real competitive processes between medical aid scheme administrators and providers.
“As such, the Competition Commission believes that they [medical practitioners] were contravening the Competition Act and they were involved in an illegal process,” he said.
Industry founded without parliamentary act
Motsoaledi further said that the Department of Health attempted to regulate tariffs by inviting medical practitioners, hospitals, and medical schemes to provide the department with the costs of running their services, which would guide the department to set tariffs.
“Unfortunately, there were several disagreements with the submissions made by the private healthcare sector.
“In other words, when the private sector was asked to show how much they spent so that we knew the cost of them seeing a patient, they provided incorrect cost data.
“This was identified during a verification exercise. A practitioner would claim that they performed certain things to make the tariffs go higher,” he said.
He added that the private healthcare industry was founded without a parliamentary act.
“The private healthcare system was never structurally planned,” Motsoaledi said, highlighting the government’s success in implementing the proposals to increase competition in the health sector.
“No act was ever passed to regulate healthcare providers. That means those who provide healthcare services every day to patients have no law that was passed to regulate the do’s and don’ts; even up to today, it doesn’t exist. That is why people are blaming the state for the tariffs.”
Private hospitals likened to hotels
He revealed that private hospitals work more or less like airlines and hotels.
“If the bed’s occupancy rate is low at private hospitals, the patients who are there are going to pay more to cover for the unoccupied beds. The cost of private healthcare is now beyond the reach of many people in our country.”
Motsoaledi added that the medical price inflation is much higher than consumer price inflation.
He said: “We would be right to assert that it has become an uncontrollable expenditure; needless to say, this affects every aspect of South African life.
“It affects medical aid premiums, which become a big factor in salary negotiations between employer and employee.”
