The South African physiotherapy industry has received approval from the Competition Commission for centralised procurement for the next five years, enabling the sector to negotiate better terms with suppliers and thus allow the savings to be passed on to consumers, reports BusinessLIVE.
Provisos, however, include that the industry maintain records and annually, provide a report to the commission on cost savings in rand terms that have been passed on to consumers “and/or medical aid beneficiaries”.
The watchdog said the centralised procurement would be conducted through a request for proposal to suppliers for the “discipline-related cost basket” in exchange for participation on the preferred provider list.
The request for the exemption was brought by the 3 200-member-strong SA Society of Physiotherapy (SASP).
The reprieve comes with conditions, with the commission looking to increase the participation of historically disadvantaged people in the profession over the period of the exemption, which lapses in 2030.
SASP will have to report to the commission annually on how the industry is transforming and on services it renders to “underserved and lower-income communities”.
Members will also expand employment opportunities for historically disadvantaged people and through “implementing mentorship programmes enabling experienced professionals to train and support new entrants in line with set targets”.
The commission found 100% of SASP members qualify as either small or medium enterprises, with about 25% of the establishments of the organisation’s total membership being owned and operated by historically disadvantaged people.
It said the SASP also has to required to provide an annual description of how centralised procurement has created “opportunities and incentives for products required in physiotherapy practices to be made and purchased locally”.
While the competition pardon is a breakthrough, the organisation faced resistance from the commission in its request to have members collectively engage with medical schemes and medical scheme administrators to set prices.
The commission felt this request might push up costs for consumers.
The SASP argument was that its members were predominantly price-takers in their dealings with medical schemes and medical scheme administrators that control the manner and method of reimbursement for professional services rendered, and allowing collective bargaining would promote the entry of small and medium-sized businesses or firms controlled or owned by historically disadvantaged people.
But the commission rejected this, arguing that consumers would be worse off.
“The commission has decided to reject the SASP exemption application in respect of collective bargaining, billing codes and global fees,” it said. “No evidence was found indicating that physiotherapists are price-takers or have no bargaining power in the healthcare industry.
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