BHF is of the view that the recent statements and advertorials in the print media are an attempt by private hospitals to deflect attention from the fact that they are one of the major drivers of healthcare inflation. Dilution of focus is not a solution to identified problems within a particular area.

While not all hospital groups engage in the rebate and discounting arrangements with suppliers of surgicals, consumables and devices, the rebate system is a key contributor to hospital inflation, since it artificially inflates hospital prices and creates incentives for hospitals to purchase expensive items and to use more of them.

Whilst BHF supports the call for transparency across the healthcare provider and funder spectrum, the following must be observed:

• Pharmaceuticals are governed by Single Exit Price legislation which dictates a transparent process for arriving at prices for medicines;
• Doctors and other providers of healthcare services participate in the National Health Reference Price List process to arrive at reference prices for their services. This requires the disclosure of cost and other information by them.

Administrator costs and charges are scrutinized closely by the Registrar for Medical Schemes and contracts between medical schemes and administrators have to be approved by the Registrar before they come into operation.
Private hospitals are currently not participating in any processes which require the disclosure of the cost to themselves of providing health care services. For this reason, BHF and its members believe that it is necessary and appropriate to call for greater transparency in the area of hospital costs and the setting of hospital fees and prices of medical materials used by hospitals.