More than five years after the Health Market Inquiry’s final report was published, the government has taken its first steps towards acting on the findings, although not all recommendations will be implemented, a move which has been criticised by experts.
The measures are aimed at introducing transparency into pricing, enabling funders and providers to discuss pricing to lower costs, addressing the issue of unexpected co-payments and out-of-pocket expenses, and phasing out particularly harmful pricing practices that have caused exorbitant bills.
However, the HMI’s 2019 recommendations will not be fully implemented and, crucially, fall short of establishing an independent regulator for the industry. An independent office to collect data on private healthcare outcomes, also recommended by the HMI, would not be established. Instead, the Department of Health will carry out several regulatory functions, reports News24.
The Competition Commission established the HMI at Motsoaledi’s request in 2014 to investigate the barriers to competition in the private healthcare sector. In its final report in September 2019, it concluded that the private healthcare market was characterised by high and rising expenditure, over-utilisation of services, and lacked any credible measure of the quality of care provided to patients.
A fortnight ago, Trade, Industry & Competition Minister Parks Tau published draft regulations paving the way for the establishment of a multi-lateral tariff negotiating forum, where medical schemes and private healthcare providers can set prices, as reported in MedicalBrief.
The tariff-setting body is to be overseen by the NDoH and participating parties will be granted a block exemption to the Competition Act’s prohibition on collective bargaining.
The Health Minister recently published draft regulations that propose establishing a uniform basic benefit package that must be offered by all medical schemes.
These measures deviate to some extent from the HMI’s recommendations, which said tariff negotiation should be overseen by an independent body – called the supply side regulator for health. This regulator was integral to its proposals, and was also tasked with advising on best practice, issuing facility licences and practice numbers, and liaising with a new body to monitor the quality of care, known as the Outcome Measurement and Reporting Organisation.
The Health Department previously said establishing the supply side regulator would require creating a new schedule 3a entity with an Act of Parliament.
Motsoaledi said on Monday that the Treasury would not support the creation of more schedule 3a public entities for health – as they were costly structures. He said government money should be spent on patients, not administration, reports Business Day.
Healthcare capacity planning, including licences, would be “firmly located” within the Health Department, he added, and there would be no need to issue practice numbers, as under NHI every Health establishment would have a unique master health facility list identity, and healthcare professionals would have unique provider numbers linked to their professional registration numbers.
Last week, former HMI panel member Sharon Fonn, a Professor of Public Health at Wits University, said an intervention on tariff negotiation alone would not drive down the cost of private healthcare, as it needed to be combined with reforms to manage demand and measure the outcome of the care provided to patients.
Implementing the HMI’s recommendations piecemeal would not foster competition or protect consumers, she said at the time.
Motsoaledi said that some of the measures taken would need to be “stop-gapped” as the NHI would take on some of the functions in the longer run.
He defended the government’s approach, saying the HMI never intended all of its reforms to be simultaneous, and work was under way to act on many of its recommendations.
For example, the Health Professions Council of SA (HPCSA) was in the process of amending the ethical rules prohibiting multi-disciplinary teams, a standardised benefit package was under discussion, and the department had established a working group on health technology assessment.
He also said that the Office of Health Standards Compliance could execute the functions of the Outcome Measurement and Reporting Organisation.
The department, he added, would respond to the HMI recommendations by taking the following action:
• Healthcare planning, including licensing of private facilities, will be done by the department, not an independent regulator. It would be “untenable” for planning to be done by someone outside the system, he said.
• The HMI’s recommendation to set up an independent, not-for-profit reporting organisation that could use the information to set standards would be done in-house by the Office for Health Standards Compliance, which carries out this function for the public sector.
• Multilateral tariff negotiations would begin under the auspices of the Department of Health for both prescribed minimum benefits (PMBs) and non-PMBs. The department would work with the Department of Trade, Industry, & Competition to establish the framework.
• The billing practice of “fee for service” (FFS) will be eradicated “as far as possible”. FFS is paying cash for every service rather than a package of interventions. The ethical rules of the HPCSA had previously not allowed multidisciplinary practices where groups of doctors work together. The HMI recommended that FFS be totally scrapped. Motsoaledi said the HPCSA had amended some of its rules.
• The department agreed with the HMI recommendation that all medical aid schemes develop a standardised benefit package. But while the HMI said this should be obligatory, Motsoaledi said this was “complex” and would not be compulsory initially.
See more from MedicalBrief archives:
‘Transitional’ private healthcare reforms punted ahead of NHI
Don’t wait for NHI to start health sector reform, SA experts urge
SA Health Review: HR weaknesses threaten NHI
NHI will cover Health Market Inquiry recommendations – Crisp