Healthcare reform cannot wait while costs keeps rising

Every year, South Africans feel the impact of rising healthcare costs long before they enter a hospital or visit a doctor. It arrives in the form of higher medical scheme contributions, larger out of pocket payments, and growing uncertainty about whether quality private healthcare will remain affordable for their families in the years ahead.

While the country continues to debate the future of healthcare reform through National Health Insurance (NHI), millions of South Africans are dealing with a far more immediate reality which is the rising cost of accessing care today. This is why reforms aimed at improving affordability and transparency in private healthcare cannot be delayed while broader policy processes unfold. 

This month marks one year since public comments closed on the Department of Trade, Industry and Competition’s draft Interim Block Exemption for Tariff Determination in the Healthcare Sector. The draft regulations are designed to establish a formal tariff negotiation framework between medical schemes and healthcare providers to improve pricing transparency, affordability, and sustainability within the private healthcare sector. Yet despite widespread recognition that healthcare pricing reform is urgently needed, there has been little indication of when meaningful implementation will begin. 

Critical reforms to improve affordability and transparency in private healthcare are not in conflict with universal health coverage or the long-term objectives of NHI. In fact, they are necessary to stabilise the health system while broader reforms continue to evolve.

The need for tariff reform has been recognised for several years. In its 2019 Health Market Inquiry, the Competition Commission identified structural problems in private healthcare pricing and recommended the establishment of transparent mechanisms for collective tariff determination to improve affordability for consumers.

The BHF has consistently supported these recommendations and believes regulated tariff negotiations remain one of the most practical mechanisms available to improve price transparency, affordability, and long-term sustainability in private healthcare. However, the key challenge remains ensuring that these reforms can be implemented efficiently and translated into meaningful relief for healthcare users.

The Department of Health was already tasked with implementing the recommendations in the HMI Report in 2019, in particular the establishment of  a transparent framework for collective tariff determination including a multilateral negotiation forum and mechanisms to improve price transparency and affordability for consumers. Almost seven years later, significant elements of those recommendations have yet to be implemented.

In the absence of meaningful implementation progress, the Board of Healthcare Funders (BHF) in 2021 applied to the Competition Commission for an exemption under the Competition Act that would allow medical schemes to collectively negotiate tariffs with willing healthcare providers and publish agreed tariffs transparently. The exemption  application was rejected last year. In response the BHF submitted an appeal to the Competition Commission Tribunal against this decision and is awaiting the conclusion of the review processes on the matter.

South Africa has seen similar challenges before. During the Covid-19 pandemic, similar exemptions were introduced to enable coordinated healthcare pricing interventions under the oversight of the Department of Health. However, implementation challenges limited the effectiveness of the intended negotiation structures,  requiring the Competition Commission itself to later intervene to reduce the price of Covid-19 testing.

For ordinary South Africans, these delays have real consequences. Rising medical scheme contributions, increasing out-of-pocket payments, and uncertainty around healthcare costs are placing growing strain on households already facing broader cost-of-living pressures. Without structural reforms to improve pricing transparency and affordability, access to private healthcare will continue to move beyond the reach of many working families. These reforms would not only benefit private healthcare users, but also the state itself, which subsidises medical scheme membership for many public sector employees and therefore carries a direct fiscal interest in improving cost efficiency and pricing transparency across the healthcare sector.

This is why the BHF continues to maintain that one practical and immediately available solution is for the Competition Commission to directly grant exemptions allowing medical schemes to collectively negotiate tariffs with willing healthcare providers under the Competition Act. The Commission already has the legal authority to do so. This route could accelerate implementation while existing long-term reforms continue to evolve. It would also immediately enabling transparent, regulated negotiations that could help stabilise healthcare costs. Importantly, this approach would not undermine broader health reform or the objectives of universal health coverage. On the contrary, making private healthcare more affordable and sustainable now is entirely consistent with the long-term goal of expanding access to quality healthcare for all South Africans.

South Africa does not have to choose between long-term reform and immediate relief. We can pursue universal health coverage while also implementing practical measures that make healthcare more affordable today. The healthcare affordability challenge is too urgent to leave workable solutions sitting on the shelf. The regulatory tools already exist. What is needed now is urgency, regulatory clarity, and coordinated action across all stakeholders to ensure South Africans experience meaningful relief while broader healthcare reforms continue to take shape.

*Katlego Mothudi is Managing Director of the Board of Healthcare Funders.