Application for exemption from the provisions of the Competition Act - 14 March 2008
The Competition Commissioner’s ruling of 2004 which was aimed at promoting more competition in the private healthcare market and driving costs down has had the opposite effect. Instead, since the ruling, expenditure within this sector has soared.
The Board of Healthcare Funders (BHF) has on behalf of its members, 85% of medical schemes in South Africa, applied for exemption from provisions of the Competition Act No. 89 of 1998 that prohibits the medical scheme industry from working as a collective on matters such as setting tariffs and defining patient benefits.
The application seeks to deal with a host of unintended consequences arising from a ruling by the Competition Commission in 2004 that banned collective bargaining in the sector. This has brought about concerns on the continuity and the productivity of the medical scheme industry as a whole.
The key areas which the Board seeks to promote through the application exemption are:
1. collective agreements and concerted practices between two or more medical schemes in order to prevent or reduce membership churn.
2. collective agreements and concerted practices regarding the interpretation of the prescribed minimum benefits package (PMBs).
3. collective agreements and concerted practices regarding the use of any particular coding system for health interventions.
4. collective agreements and concerted practices regarding combating fraud.
5. sharing and distribution of information through BHF for the benefit of medical schemes’ and their members.
6. collective bargaining by BHF or medical schemes with manufacturers of specific medical devices, materials and medicines in order to bring the price of such specific device, material or medicine down for the benefit of members of all medical schemes.
7. collective submissions to organs of state.
8. collective agreements and concerted practices relating to the interpretation and application of the National Health Reference Price List (NHRPL).
9. collective agreements and concerted practices between or by medical schemes or by the BHF on behalf of schemes, whose objective is to assist members of more than one scheme to obtain access to a particular technology that would otherwise be unaffordable or inaccessible to those members.
It is BHF’s view that, the misalignment of incentives between medical schemes, (which are not for profit entities, governed under social solidarity principles) and providers, (which are relatively unregulated and which are for-profit entities), will to a large extent be addressed by obtaining exemption from the provisions of the Competition Act.
14th March 2008
Issued on behalf of
The Board of Healthcare Funders
Heidi Kruger, Head: Corporate Communications & PCNS
Tel: (011) 537 0237
Fax: (011) 880 8798
Cell: 082 905 1161
e-mail: heidik@bhfglobal.com
