Blow to medical schemes

Pretoria - Medical funds may not join forces to negotiate better tariffs.

This is the upshot of the Competition Commission's rejection of an application by the Board of Health Care Funders (BHF) for exemption from the Competition Act.

The board submitted its application in 2007 and the commission announced its decision only last week.

Dr Humphrey Zokufa, the chief executive of the BHF, reckons the decision will be prejudicial to members of medical funds.

He says the BHF will soon have a meeting with the commission to gain better insight into the reasons for turning down the application.

"We can't leave matters like that. The sustainability of [smaller] medical funds is at issue."

He points out that the board represents 80% of the 120 or so medical funds. One of the biggest open funds, Discovery Health, resigned from the board last year.

Various other funds followed and the future of the board itself appears to be in question.

According to Zokufa few of the smaller and closed funds have the capacity to negotiate better tariffs individually with large hospital groups.

In its application the board asked for exemption, thus permitting medical funds to decide together about interpreting the prescribed minimum benefits, the standardisation of the coding system, the sharing and publication of information including prices and costs, joint submissions to the state and joint bargaining for medical materials, equipment and drugs.

The commission's analysis found that actions such as this would amount to contravention of specific parts of Section 4 of the Competition Act.

This section bars companies in a horizontal relationship, like medical funds, from entering into agreements or participating in any form of collective bargaining.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.