SAMWUMED backs government intervention on healthcare pricing

Looking for equitable, sustainable system to deliver private care to more people

That private hospitals have reacted so quickly and so strongly to the proposed National Health Amendment Bill is not surprising, said Neil Nair, fund officer of worker-controlled SAMWUMED medical scheme.

“Given the extent to which medical costs continue to rise, we welcome government’s intervention and the approach adopted by the minister with regard to pricing. It is necessary to restore the balance of power between providers and funders who have no protection against what amounts to simple profit mongering by many health service providers.

“Unfortunately, the influence of the masters of our present destiny, especially private hospital companies, weighs heavily on bringing about a better, fairer and sustainable healthcare dispensation. They have the most to lose, and while their hysterical response was predictable it failed to acknowledge that the pricing systems currently used do not work,” said Nair.

Against the background of run-away medical costs, the proposed legislation seeks to implement a process for the negotiation of the pricing of health services. This would involve service providers and medical aid funders and, in the absence of an agreed price, the matter would be referred to a health pricing appeal tribunal for a final determination.

Said Nair: “It’s clear that the pricing of healthcare using market economy principles does not deliver the intended results because we cannot assume that ‘fair value’ will be arrived at through the process of supply and demand.

“Firstly, healthcare is a scare resource faced with unlimited demand. There is a lack of access to information that allows buyers to make rational decisions and, in terms of healthcare delivery, the doctor diagnoses the condition and determines the treatment, usually without question.

“These factors drive costs upwards. And because cost determines accessibility, we need to go beyond traditional pricing models to find an equitable and sustainable system capable of delivering quality healthcare to more people.”

Nair said that while the bill in its current form may have its shortcomings, it presented a constructive approach to addressing the fact that, due to rising costs, private healthcare is becoming increasingly unaffordable to a growing proportion of people forced to rely on the over-stretched public sector.