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Profiting at the expense of SA’s health: Competition report takes aim at private providers

Trade DSY on Easy Equities

JOHANNESBURG — The UK’s NHS (National Health Service) is celebrating its 70th birthday this year and while it is much criticised, there’s no doubt that it has had a major impact on improving the health of ordinary citizens in that country (just watch the video that I’ve posted below). Of course, the public hospitals in the UK are of a much higher standard than in SA and the UK has a government that functions properly and acts (mostly) in the best interest of its citizens. SA’s ANC, sadly, lacks in these last two mentioned areas. But I do admire the ANC for realising that SA’s health industry is broken, as outlined in its below report. Even for the middle classes, private healthcare is pricey and I’m sure many South Africans who are fortunate to have private health insurance forego even basic procedures sometimes because their medical aids may not cover everything. The industry needs to change and the planned NHI may hold the answers. The only problem is that the ANC is terribly inept at running things – so NHI and any breaking up of the local industry could be doomed to fail under their watch. A tragic situation for ordinary South Africans. – Gareth van Zyl

By Janice Kew

(Bloomberg) – South Africa’s private health-care market is uncompetitive and needs tougher regulation to ease the dominance of three main hospital operators and insurers led by Discovery Ltd., according to a much-delayed report into the industry.

The Health Market Inquiry, which has been investigating the industry for four years, made a series of recommendations in an 800-page report intended to increase competition and transparency in the industry. It found that Mediclinic International Plc, Netcare Ltd. and Life Healthcare Group Holdings Ltd. have a combined 90 percent market share of the private hospital market while Discovery generates far higher profit than its competitors.

medical aidThe probe was initiated by the Competition Commission amid broader concern that private healthcare is only available to a minority of people who can afford it. More than two decades after the end of white rule, the country’s inequality rates are among the highest in the world and more than one in four people are unemployed.

“Part of our recommendations will be aimed at regulators who, we have concluded, are not as sensitive to core competition concepts as they should be,” the inquiry said in its report.

Earning profit

Discovery Health said its profitability is due to how well it runs the business and not because it charges higher fees. Netcare said it’s still looking through the report, though there are several flaws that it intends to address in further submissions. Mediclinic Southern Africa said it also plans to respond to the findings. Life Healthcare did not immediately respond to requests for comment.

Representing the inquiry, Ntuthuko Bhengu said at a briefing that a new regulator would be chosen through a public process of nominations and a parliament vote. Stakeholders have until Sept. 7 to provide comments on the provisional findings and proposed recommendations, with a final report expected by Nov. 30.

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