Private healthcare investigated over rising prices - CNBC Africa

Private healthcare investigated over rising prices

Southern Africa

by Trust Matsilele 0

Private healthcare being investigated over rising prices. PHOTO: Yworld

Inquiry that was initiated by the commission has been on the cards for two years.

(READ MORE: The challenges of investing in healthcare in Sub-Saharan Africa)

The inquiries underway is believed to have been prompted by the rising expenditure, rising prices and rising above headline inflation across the health sector.

According to Daryl Dingley, a partner at Webber Wentzel's Competition Practice, the fact that a small population can afford private healthcare is what spurred authorities to initiate the inquiry.

He also added that the inquiries into the healthcare sector would be conducted in the same fashion as the banking sector inquiries though approaches would differ because of the response by the healthcare sector.

“The healthcare inquiry has more teeth compared to the banking inquiry because the banking sector came forward on their own and volunteered information,” Dingley told CNBC Africa.

“In South Africa the major issue with the private hospitals is the level of concentration which creates assumptions that they are driving these inflationary pressures,” he added.

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About 80 per cent of the private healthcare sector in the country is dominated by three firms which are Netcare, Mediclinic and Life Healthcare.

(READ MORE: High costs in S.Africa healthcare industry under scrutiny)

The new market inquiry is being conducted under the new regime of the competition act.

Dingley postulated that it was unfair for the inquiry to be informed by affordability of private healthcare by the country’s populace.

“It is unfair as there are a number of factors affecting the rising expenditure like increasing utilisation as there is a rise in the population that is affording medical insurance and managing to go to the private healthcare.”

South Africa’s Competition Commission began a market inquiry into the private healthcare sector early 2014.

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