Medical prices in South Africa can be capped

South Africa is taking steps to cap healthcare costs as it grapples with rising medical charges that most of the country can’t afford.

“Currently, there is no structured and transparent framework for determining tariffs for healthcare services,” Trade and Industry Minister Parks Tau told reporters on Monday.

Without such a framework, consumers face a regulation “vacuum,” causing uncertainty about the charges that can be levied, he said.

Tau’s comments followed the publication of draft new rules that propose exempting healthcare service providers, including doctors, dentists and pharmacists, from anti-trust rules that ban them from collectively negotiating the fees they charge. The change won’t apply to private hospital admission fees.

The publication of the draft rules “marks a critical step toward addressing the cost of access to healthcare and promoting transparency in the healthcare market,” Tau told a briefing in Johannesburg.

The move comes as South Africa moves toward a controversial program of universal national health insurance. The National Health Insurance Act, which was signed into law shortly before elections in May after years of wrangling, is considered by critics as unaffordable.

A 2019 Competition Commission report found that phasing out collective healthcare industry negotiations in 2003 led to an imbalance of market power and unsustainable pricing practices.

It also argued South Africa needs a dedicated healthcare regulator to ensure sufficient competition and lower prices.

The proposed exemption follows pricing recommendations presented in the report, Tau said.