Afrocentric Health has to go it alone in Discovery battle

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Medical scheme administrator Afrocentric Health has lost its bid to widen its fight against rival Discovery Health, after the Competition Tribunal declined its request to add 15 more medical schemes to its complaint.

Business Day reports that the tribunal has ordered that a hearing be held giving both sides a chance to argue whether the case brought by Afrocentric has merit. A date has yet to be set.

Afrocentric owns medical scheme administrator Medscheme, while Discovery Health is a subsidiary of JSE-listed insurer Discovery and administers Discovery Health Medical Scheme (DHMS).

According to the report, Afrocentric is accusing Discovery Health of contravening the Competition Act by engaging in collective bargaining on behalf of the medical schemes it administers when it negotiates tariffs with private hospital groups and healthcare providers.

Afrocentric originally laid a complaint against Discovery Health and DHMS at the Competition Commission in June 2014, alleging that Discovery Health used DHMS’s dominance of the open medical scheme market to negotiate identical tariffs for all the schemes it administered. The commission declined to refer the matter to the tribunal.

Afrocentric then took the matter to the tribunal itself and in April asked whether it could add another 15 medical schemes administered by Discovery Health to its case.

Discovery Health CEO Jonathan Broomberg is quoted in the report as saying that nothing in the company’s conduct contravened the Competition Act. "Discovery Health acts on behalf of noncompeting and not-for-profit medical schemes and its negotiations with hospitals and other providers are of significant benefit to the members of all schemes under its management."

Medscheme CEO Kevin Aron said the tribunal’s refusal of Afrocentric’s request to add 15 medical schemes to the matter was inconsequential in terms of the overall case raised against Discovery Health and DHMS. Afrocentric administered medical schemes with more than 3m beneficiaries among them, but negotiated on behalf of each scheme individually, he said in the report.

Business Day report

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