new legislation on medicines to save consumers 20%
12 June 2008

The BHF supports the Health Minister, Dr Manto Tshabalala-Msimang and the department in developing and formulating this legislation which provides for establishing a Bargaining Chamber.  Managing Director of BHF, Dr Humphrey Zokufa said it was clear that free market principles cannot apply in the private healthcare environment in South Africa and the elements which need to be in place for perfect competition do not exist.

“In an environment of perfect competition, the consumer would have a choice of where to obtain a service, they would be in a position to assess the quality of the service and would have the power to buy or not to buy the service.  “This is exacerbated by a market where there is a private hospital oligopoly and a scarcity of specialist skills," Dr Zokufa said.

He also noted that over the past few years, the industry has been dogged by lack of transparency in prices for healthcare services for ward fees, theatre fees, prosthetics or healthcare technology, which has contributed to making private healthcare unaffordable to the average working person in South Africa.
The same lack of transparency applied to medicines until the government introduced the Single Exit Price legislation, which has resulted in an approximate 20 percent savings for consumers on medicines, he said.

He further said that the BHF estimated recently that the manner in which private hospital groups were charging for anaesthetic gasses resulted in over-charging of approximately R300 million per annum to consumers.  Commending the government for its intervention by outlawing the previous pricing model and implementing a more accurate method of billing, Dr Zokufa said the BHF does not believe that transparency will be gained in the absence of a legal framework.

"The primary intention of the Bill is to create transparency and not to fix prices, the funders and service providers such as private hospitals will still engage and determine the price particularly for the Prescribed Minimum Benefits," said Minister Tshabalala-Msimang. The BHF is the representative body for 93 percent of medical schemes throughout South Africa, Namibia, Zimbabwe, Botswana and Lesotho.

Gabi Khumalo, www.buanews.gov.za