Publications
Partners
Medii-Clinic said the proposed measures could threaten the viability of the private health care sector.
The draft legislation was based on misunderstandings about the private healthcare industry because the department had not consulted meaningfully with the majority of stakeholders in the industry nor had it conducted a proper investigation into the issues at hand. The department had apparently relied on the "factually and logically flawed" reports of the Council for Medical Schemes, the government regulator of medical aid schemes.
In a submission to the department by Medi-Clinic's legal advisers, Hofmeyr, Herbstein and Gihwala Inc, the private hospital group said it was strongly opposed to legislation based on the draft National Health Amendment Bill, published last month for comment.
The bill would compel private hospitals and medical schemes to enter into a collective price-setting process for private hospital tariffs, overseen by a facilitator appointed by the minister. It requires cost and price information to be shared, and provides for inspectors with unconstitutional and almost unlimited search and seizure powers to investigate private healthcare organisations.
Where the collective bargaining process does not produce agreement on private hospital tariffs, prices will be determined by a tribunal appointed by the minister and with the powers of a High Court.
Draconian, objectionable and unnecessary'
"These provisions would bring about a fundamental and unwarranted inroad into the overall economic policy in South Africa, replacing an already regulated market by price determination by fiat," Medi-Clinic said.
Not only was this process draconian, objectionable and unnecessary, but it was in direct contravention of the Competition Act, which prohibits collective bargaining and price-fixing. The result would be to remove competition entirely from the private healthcare sector.
The provisions would also result in "a complete abrogation of the freedom of contract of healthcare providers, and the effective discontinuance of competition in the health care industry."
There was no requirement that the tribunal consider the sustainability of the private health care industry, there was no appeal against tribunal decisions and the mandatory public access to its records would involve "a wholesale invasion of the privacy of the involved stakeholders".
The Competition Commission in 2002 specifically outlawed collective bargaining between private hospitals and medical schemes. The bill did not address the conflict between its price-fixing provisions and the Competition Act. Instead it vested the minister with "unbounded plenary legislative power".
"For example, she could under that clause make rules constituting an entire substitute 'Competition Act' for the private health industry. This is an impermissible delegation of parliament's law-making function."
Medi-Clinic said the bill threatened the viability of the private healthcare industry.
"Should private hospitals be forced to agree to tariffs that are not economically feasible for them, or have such tariffs imposed on them by the tribunal, further investments in private hospital companies would be jeopardised. This would lead to the demise of private hospitals and detrimentally affect the health care sector as a whole.
- I-Net Bridge
