Red Cross Children's Hospital has a number of surgeons performing surgery pro bono on children who need it, alleviating a backlog in the system. Surgeons perform any nature of surgery. Today it was minor invasive and had children with spine problems, plastic surgery were operated on. PICTURE: THOMAS HOLDER
Red Cross Children's Hospital has a number of surgeons performing surgery pro bono on children who need it, alleviating a backlog in the system. Surgeons perform any nature of surgery. Today it was minor invasive and had children with spine problems, plastic surgery were operated on. PICTURE: THOMAS HOLDER

Private health inquiry will take two years

By Ann Crotty Time of article published Dec 2, 2013

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Johannesburg - The Competition Commission is hoping to announce the members of the panel who will preside over the inquiry into the private health-care sector by the end of this month.

The inquiry will be launched on January 6 and completed by November 2015.

Deputy commissioner Trudi Makhaya emphasised that the integrity of the process was critical to the outcome of the inquiry and that the panel would play a crucial role in the inquiry. She was commenting after Friday’s release of the terms of reference for the commission’s market inquiry into private health care.

The inquiry had been set up to “probe the sector holistically to determine the factors that restrict, prevent or distort competition and underlie increases in private health-care prices and expenditure in South Africa”, the commission said.

The terms of reference have been extended since the draft terms were released in May. The scope reflects submissions received from stakeholders since then. A significant addition to the scope of the inquiry is a proposed regulatory impact assessment, which will “review the current regulatory framework and identify gaps that might exist”.

In addition, pharmaceuticals and medical devices will now be covered. However, Makhaya said these would be covered to the extent they were deemed to be cost drivers in the health-care sector. “They will not be a focus in and of themselves.”

She noted: “It is important to stress that the panel will be running the process, it’s not that there is going to be one person in the commission making a decisive input.” She added that a technical team comprising KPMG and commission staff would do the background work.

The process would be similar to that followed in the banking inquiry. Hearings will be open to the public and provision will be made for the public to challenge submissions made to the panel, which will make recommendations to the commission.

Makhaya told Business Report that the commission had not finalised whether there would be three or five members on the panel.

In a note issued on Friday, economic consultancy group Econex said the appointment of the panel of experts was a crucial final step as it would preside over the hearings, review submissions, examine evidence and ultimately write the inquiry report and recommendations.

“It is of the utmost importance that people with sufficient expertise be appointed, who will manage a tight process and not allow the inquiry to be captured by specific interest groups, or derailed due to long delays and unnecessary expenses.”

Competition law expert Anthony Norton of Nortons Incorporated raised concerns about the much broader scope of the inquiry and the possibility of it moving beyond competition issues. “A two-year inquiry is a gift for lawyers but the resources could surely be better spent on an investigation of the public health sector and why it is disintegrating.”

He said if the public sector could be improved, even marginally, it would act as a self-correcting mechanism for any market failure in the private sector because people would switch from private to public facilities.

Paul Coetser of law firm Werksmans said the critical issue in the industry was the asymmetry of information. “That is why this is a complex market and the panel will have its work cut out.”

Nkaki Matlala, a spokesman for the Hospital Association of SA, said on Friday that the body still had to fully review the final terms but believed it was “appropriate that the commission invests the time and resources to reach a complete understanding of the enormous complexities of the health-care sector”.

He added: “We also hope that the process will be independent, fair and impartial, transparent and rigorous.”

Hospital groups Netcare and Mediclinic said they had not yet had time to consider the final terms of reference in detail but would make a comment later this week when they had. - Business Report

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