Implementing recommendations of Health Market Inquiry good idea – experts

Health Minister Dr Aaron Motsoaledi’s promise to implement the recommendations of the Health Market Inquiry is a good idea, experts say.

Responding to weekend reports that the African National Congress (ANC) has reached a compromise on the National Health Insurance (NHI), he said he will call a press conference in the coming weeks to elaborate on the way forward with the recommendations.

The Competition Commission initiated a Market Inquiry into the state of competition in the private healthcare sector (HMI) in November 2013, prompted by the Commission’s observation that prices in the private healthcare sector are “at levels which only a minority of South Africans can afford” and that “healthcare expenditure and prices were rising above headline inflation” after conducting preliminary research into private healthcare markets.

The analysis focused on three main markets in the healthcare sector:

• Healthcare facilities: mainly hospitals, day hospitals and specialist facilities
• Healthcare providers: specialists and general practitioners
• Funders market: medical schemes, medical scheme administrators and brokers.

The final report of the Health Market Inquiry, chaired by the former Chief Justice, Sandile Ngcobo, was published in September 2019. However, only limited progress was made to implement the recommendations.

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Inquiry recommendations should be implemented in full

Asked whether it is a good idea to implement the recommendations of a report that was compiled between 2013 and 2019 now in 2025, Professor Alex van den Heever, Chair of Social Security Systems Administration and Management Studies at Wits says it is a good idea and the recommendations should be implemented in full.

However, he notes, the National Department of Health has demonstrated little understanding of the proposals themselves or the required processes needed to implement them.

“The Inquiry addresses systemic market failures in the private health system and involves a discrete set of reforms. The Inquiry should form part of a comprehensive set of reforms to the health system. Unfortunately, the National Health Insurance (NHI) proposals are not that reform and will likely never be implemented or be successful if implemented.”

Is the department not trying to take a shortcut by implementing the recommendations to avoid doing more research to establish how much the NHI will really cost? Van den Heever says the failure to offer a financial feasibility assessment of the NHI proposals, rather than a simplistic costing, points to a lack of confidence in the proposals.

“Such an assessment is a reasonable requirement for any high-risk proposal, which the NHI clearly is.”

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Minister guilty of making extremely emotive statements — expert

The minister also complains in his statement this week that there is persistent and consistent misinformation about the NHI. Is this not because the department does not know how much it will cost and therefore keeps everyone in the dark?

Van den Heever says he does not think the minister’s position is reasonable. “He is guilty of making extremely emotive statements regarding the NHI proposals that have clouded productive debate. I certainly hope that we can move forward more productively in the coming year.”

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South African Private Practitioners Forum also wants implementation

Dr Simon Strachan, CEO of the South African Private Practitioners Forum (SAPPF), says the forum has been advocating for the implementation of the recommendations throughout the NHI process.

“The recommendations provide practical initiatives to improve the regulation and functioning of the private healthcare sector. It is wiser to use these recommendations that were well articulated by the Inquiry than relying on any other proposal that has not been through the rigour of developing these recommendations.”

The SAPPF was a founding member of the Universal Healthcare Access Coalition (UHAC) that published its proposal in December. The SAPPF commented in the proposal regarding the recommendations that a process is required to properly take the detailed recommendations of the Inquiry forward.

“No process has existed to date to address the recommendations, with important implications for the governance of the private health system,” the SAPPF said.

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Recommendations include establishment of supply-side regulator for healthcare

The Inquiry’s recommendations include:

• The establishment of a supply-side regulator for healthcare. According to the recommendations, it will be a stand-alone special-purpose public agency, with the mandate to fulfil a specific economic or social responsibility of government.
• Economic value assessments to inform practice and curb waste on procedures, equipment and medicines that are not beneficial and may not be cost-effective. The supply-side regulator should have a Health Technology Assessment function to produce guidelines for both the private and public sectors, although these may differ.
• Health service pricing. The Inquiry envisages that funder and practitioner [fee-for-service] bilateral arrangements will be phased out as soon as possible. Bilaterally negotiated [fee-for-service] tariffs will be replaced by the implementation of the interim and then permanent multilateral negotiating forum, which will apply to as many service delivery modes as rational.
• Outcomes measurement and reporting. The lack of outcomes information seriously impairs competition, limits consumers’ choice and prevents value-based contracting with funders. There is a need for radical improvement in the availability of reliable, comparable and meaningful information on healthcare outcomes, in both healthcare sectors.
• Supply-side recommendations specific to practitioners:
  • The functioning of practitioner associations.A review of the ethical rules of the Health Professions Council of South Africa (HPCSA).
  • A review of the medical curriculum of the HPCSA.

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Recommendations for competition authorities and funders

There were also recommendations for the competition authorities and these recommendations for funders:

• A standardised benefit package and a review of the prescribed minimum benefits (PMBs).
• The introduction of a single, stand-alone, standardised, obligatory ‘base’ benefit package to replace the current PMBs while retaining the same philosophy that these are the minimum conditions/services that medical schemes must cover and pay for in full.
• Improve medical scheme governance and align schemes’ interests with those of consumers, while the Inquiry also proposes that the remuneration packages of executives, principal officers and trustees be linked more explicitly to the performance of schemes.
• Members must be required, on an annual basis, to declare if they wish to use the services of a broker. For those that do, the scheme will facilitate the payment to the broker. Members who choose not to use the services of a broker will pay proportionally lower scheme membership fees.
• A risk adjustment mechanism and income cross-subsidisation. Alongside the standardisation of benefits, a risk adjustment mechanism (RAM) must be implemented. A RAM will make financial adjustments across schemes to mitigate the risk-profile-related effects on scheme costs to remove the current incentive for schemes to compete on low-level competitive factors, such as attracting a younger population.
• Mandatory medical scheme membership. The Inquiry recommended that mandatory scheme membership, when introduced, should start with the highest income bands and progressively include additional income groups as more recommendations are successfully implemented and the cost of joining a scheme decreases.
• To address the needs of low-income scheme members, it was recommended that the current tax credit regime be reconstituted to take the form of a contribution subsidy. It is crucial to integrate both risk and income-adjusted subsidy, the Inquiry said.

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Department did no recent costing for NHI

Strachan says it is clear that the National Department of Health undertook no recent costing. “There is the clear objective to cost the NHI as it flies and provide healthcare cover in line with available finances.”