private hospitals reject state tariff watchdog  
21 April 2008

New price controls on the private health sector and a radical overhaul of the body that regulates medicines have been proposed in sweeping new laws published for comment by the health department.  The proposed laws come as rising private healthcare costs are making medical scheme membership so expensive that a decreasing proportion of the population can afford cover, increasing the burden on the overstretched public sector.
 
The department published the draft National Health Amendment Bill, which introduces a facilitator, appointed by the health minister, to oversee annual tariff negotiations between medical schemes and health service providers such as hospitals and doctors.
Parties allowed to negotiate in blocs, a marked departure from the Competition Commission’s 2004 ruling banning collective bargaining, and will be expected to agree on maximum prices for health services. If negotiations deadlock, the facilitator will have the authority to refer matters to a government-appointed appeal tribunal with powers to decide on prices.

Proposed laws were intended to make tariff negotiations transparent and drive down costs, said Kamy Chetty, a deputy director-general at the health department.  Industry sources said they needed more time to consider the implications of the draft laws, but any improvements to the efficiency of the Medicines Control Council would be welcome.

“There are a lot of delays in registering medicines, ” said Maureen Kirkman, spokeswoman for the Pharmaceutical Industry Association of SA, which represents multinational drug makers.  “A single authority for all medicines is not a bad thing but it will be effective only if it has the resources and capacity to do the job,” Aspen Pharmacare’s head of strategic trade, Stavros Nicolaou, said.

Interested parties have until May 16 to submit comments to the health department.

Tamar Kahn,  www.businessday.co.za