Doctors ordering more medical tests than ideally needed, admitting patients to hospital unnecessarily or to intensive care when a general ward would do are among the activities driving private healthcare costs up – even more so than high medical aid subscriptions.
This was among the key findings of the Competition Commissions provisional report of the Healthcare Market Inquiry, conducted over four years, and released by chairman, former Chief Justice Sandile Ngcobo.
The Inquiry found that new interventions in private healthcare are needed because the current system is not competitive, medical aids offer confusing product bundles that are expensive and impossible to compare and consumers are not getting fair value for their money.
Judge Ngcobo said the final report – which ran to over 800 pages and can be sourced through the Competition Commission’s website, found that the costs of private healthcare were “high and rising”, that consumers were “disempowered and uninformed” by a system that worked in favour of profits rather than quality healthcare and value for money for patients and there were “failures of accountability at many levels”.
The system was not competitive as doctors and specialists formed their own networks to enable them to raise their prices, and medical aids needed to offer their members more clarity on their various plan options in order to help them choose the best value for their money.
The inquiry found there are 2.12 medical practitioners per 1000 population in the private sector (0.92 GPs per 1000 and 0.83 specialists per 1000) - compared to 0.3 medical practitioners per 1000 population in the public sector. This, they found, means that there is no undersupply of specialists but rather an inefficient use of their time.
The Inquiry said Discovery Health has consistently earned profits well above its main competitors, with no sign of challenge. While this could be attributed to high levels of competency within the organisation, it did not fully explain the massive profitability gap as Discovery sourced services from the same industry stakeholders as its competitors.
“We see Discovery Health growing and becoming more successful over time. This is an indication of market failure and there are no signals that the market will self-correct,” the Inquiry found.
The top three administrators (Discovery Health, Medscheme and MMI) all failed to negotiate consistently better tariffs.
Health Minister Aaron Motsoaledi, who attended the Inquiry report release, said he welcomed the findings and said better regulation of the private healthcare sector was necessary, and that it was the rising high costs of private healthcare that had prompted him to turn to the Competition Commission to ask for the Inquiry.
“What has been proven today is that private healthcare is no longer affordable, even to those with medical aid,” he said.
Medical aid stakeholders present at the release said they welcomed the release, but would need time to study the full 800-page report in order to comment.
Stakeholders have been given two months to comment or propose recommendations on the report.