Tag: study

South Africans are paying more for private healthcare than ever before. But forking over more cash for more — and often unnecessary — care, isn’t paying off for consumers, a five-year investigation by the Competition Commission shows.

The Competition Commission today released the final report on its health market inquiry in Johannesburg. The 256-page document is the outcome of half a decade of research by the body, which included public hearings, written submissions and meetings with key players in the private health industry. The report is also the most detailed picture of private healthcare in the country’s history, revealing new details on everything from ownership and profit patterns to how health facilities contract doctors.

The report echoes the inquiry’s previous 2018 findings that a lack of competition in the private healthcare industry is fuelling increasingly unaffordable healthcare costs. It’s also incentivising doctors and private health facilities to over-treat patients, sending them to hospital more frequently and for longer without any real medical benefit. This is particularly true in areas like Gauteng and the Western Cape where there are more hospitals and doctors.

And with power concentrated in the hands of just a few major hospital groups, there is little motivation for hospitals and doctors to try to bring down costs and hardly any room for transformation.

Former Health Minister Aaron Motsoaledi pushed for the inquiry ahead of its 2013 launch. Motsoaledi wanted to understand just why private healthcare was so expensive before the government began buying services from the sector under the National Health Insurance (NHI).

The Commission’s final recommendations have — in many ways — already begun shaping the country’s NHI transition.

Three hospital groups have 90% of the market

South Africa’s population has grown by almost three-million in the last decade, but the number of public hospital beds in the country has barely budged, the Commission found.

In the private sector, the number of hospital beds, however, has nearly doubled.

According to Statistics South Africa, fewer than 1 in 5 South Africans were members of medical aids in 2018.

Just three hospital groups — Netcare, LifeHealthcare and Mediclinic — account for 90% of the private hospital market, based on 2016 hospital bed numbers. Independently-owned facilities make up the remaining 10% of the market.

The high concentration of power in this sector, the Commission notes, makes it vulnerable to collusion, both formally through the creation of cartels and informally. This is because — in theory — it would be easy for a small number of players to engage in price fixing, setting the tone for the market.

Without much competition, the three major hospital groups “all but dictate year-on-year price and cost increases” for medical aids and administrators while reaping the benefits of over-treatment at their facilities.

The Competition Commission’s report attributes overtreatment to two factors: Monetary incentives for doctors and facilities to admit more patients and a phenomenon called supplier-induced demand. The concept is premised on the more supply you have of beds, doctors, medicine, the more people use them regardless of whether they need them or not.

In its 2018 report, the Commission analysed hospital claims and found that almost a third of claims costs couldn’t be explained by factors such as a patient’s age or disease. These mysterious charges were being passed onto consumers in the form of increased premiums, the Commission argued.

But hospital groups say that doctors also play a role in over-prescribing care. The Competition Commission inquiry, however, maintains that health facilities and doctors play complementary roles in the phenomena — something for which the body found evidence for when reviewing contracts between the two that encourage doctors to admit more patients.

The costs of this pricey hospital care are passed largely onto medical aids — and consumers, the Commission found.

The Competition Commission writes: “[Large hospital groups] facilitate and benefit from excessive utilisation of healthcare services, without the need to contain costs, and they continue to invest in new capacity beyond justifiable clinical need without being disciplined by competitive forces.”

And with great market power, the ability to set your own prices is almost a given.

“Hospital groups have the market power to threaten that the national price for all their hospitals would have to increase,” the report quotes Discovery Health as testifying, “if there was a threat that a hospital in their group might be excluded from a local network [of preferred providers].”

The Commission’s report also found that Netcare, LifeHealthcare and Mediclinic has unfair advantages that keeps them in the lead and prevents transformation in the sector, because the practises make it hard for new players to enter. For instance, the three were able to cross-subsidise facilities across their vast networks, meaning they were able to use profits from well-performing hospitals to make up for poorer earning ones. And, the Commission says, the “big three” were able to lure the best doctors to their wards with lucrative benefits smaller hospitals just can’t afford.

The Competition Commission was able to gain access to some contracts between specialists and health facilities, although the report does not reveal which facilities or doctors the agreements refer to. In some instances, the Commission found that specialists who agreed to admit their patients into certain private health facilities over others were offered preferential financing in terms of loan servicing rates and repayment rates to buy shares from larger hospital groups.

The report recommends that the Health Professions Council of South Africa investigates this practice.

The Commission also unearthed evidence that some private health facilities encourage doctors to admit higher volumes of patients, “making full or maximum use of the facilities” or ensure that they “treat a minimum proportion” of their patients in the facility. This includes setting targets for admissions and penalising specialists who contract with them if they didn’t meet these goals.

Meanwhile, hospital admissions rates have skyrocketed in the last 10 years among those with medical aid — the Competition Commission found this increase could not be attributed to the overall health of the population.

Black entrepreneurs may get licenses to open new hospitals, but can’t get the cash

Major hospital groups are pushing back against the contention that they have a firm hold on the market, in part arguing that many new hospital licenses have been granted to smaller entities.

The Commission has fired back, saying that although some would-be hospital owners — particularly black, coloured or Indian entrepreneurs — are able to secure licenses, they struggle to get financial backing. Those who can’t get this kind of capital are forced to sell their licenses to bigger hospital groups.

Commission proposes mandatory basic benefit for all medical scheme members

Why did the private healthcare sector get so out of whack? Well, it’s in part because major sections of the National Health Act, that allow the national health department to regulate the private healthcare sector, were never enforced, the Competition Commission says.

The national health department did manage to introduce a list of 270 largely hospital-based conditions and treatments — called prescribed minimum benefits — in 1998 that medical aids must legally cover. But the list is woefully out of date.

Work to redefine prescribed minimum benefits is already underway. In line with the inquiry’s previous recommendations, the health department is hoping to make it more comprehensive and allow it to cover day-to-day needs like contraception.

The Council for Medical Schemes is also busy designing a standard medical aid package that will one day be offered by all schemes, something the Commission proposed in its 2018 report. The offering will have to spell out exactly what it does and doesn’t cover and the Council for Medical Schemes will review it every two years.

With each of the country’s medical aids offering the same standard package, consumers will be better able to compare value for money between medical schemes. Medical schemes, in turn, will have to work harder to make care better and more affordable to woo new clients.

But today’s report adds a new twist: The Commission has proposed this standard package be mandatory for all medical aid members. Those who want expanded cover will then “top up” by buying additional cover. Gap cover, the body says, will become a thing of the past.

Does this sound familiar? This is a similar structure to what the NHI proposes: One mandatory basic package of care provided by the state with medical aids selling additional cover.

The Commission has also put forward sweeping changes to improve, for instance, the issuing of hospital licenses, the monitoring of possibly anti-competitive mergers and centralising health data from both private and public facilities to improve accountability. None of these, it cautions, should be implemented as standalone measures. Perhaps one of the investigation’s most important recommendations is the creation of a body that will one day reduce supplier-induced demand, or the private healthcare system’s tendency to provide more care in areas with d higher numbers of doctors and facilities.

The proposed independent “supply-side healthcare regulatory authority” would be independently funded by the government. The body would take over what are currently opaque provincial processes for issuing new licenses for healthcare facilities. It will also handle the issuing of practice numbers in consultation with the Office of Health Standards Compliance to help facilitate the contracting and payment of healthcare providers under the NHI.

The new authority would coordinate a forum to decide the price of services under the NHI. This may be a tall order when historic distrust remains between members of the public and private health sectors and when private healthcare members, the Commission notes, are loath to even discuss billing codes for fear of divulging sensitive information.

The United Kingdom’s National Health Services has a similar regulator.

“All healthcare purchasers, including the NHI, will require providers to be properly regulated in order to achieve affordable access to quality care,” the Commission warns. “Any single buyer system, like the NHI Fund, on its own, that is without complementary supply-side regulation, cannot succeed.”

How YouTube is replacing hobbies

By Marchelle Abrahams / Daily Mail for IOL

Are we raising a generation of web addicts? A major new study seems to point in that direction, saying children in the UK have become so addicted to screen time that they are abandoning their hobbies.

It found that under-5s spend an hour and 16 minutes a day online and their screen time rises to four hours and 16 minutes when gaming and TV are included. Youngsters aged from 12 to 15 average nearly three hours a day on the Web – and two more hours watching TV.

The study said YouTube was “a near permanent feature” of many young lives and seven in 10 older children took smartphones to bed. It concluded: “Children were watching people on YouTube pursuing hobbies that they did not do themselves or had recently given up offline.”

Creative parenting expert and author Nikki Bush believes the danger of technology is that it has become a management tool.

Many times parents look to it as as a virtual babysitter, to the detriment of a child’s mental health.

“Your child’s cognitive intelligence is all based on emotional bonding.

“They are growing up in a very hostile world and it’s hostile for a number of reasons,” said the author of bestselling book Tech Savvy Parenting.

What they really need is that feeling of safety and security that comes from belonging and togetherness.

It’s very important for them – it’s like a cushion for a hostile world. And that comes from human interaction, which is very important.”

But as parents spend more time away from their younger ones, many are flocking to YouTube to fill that void. Some youngsters are becoming so obsessed with YouTube celebrities that they idolise them as role models, an Office of Communications report said.

“YouTube was a near permanent feature of many children’s lives, used throughout the day,” researchers in the study said.

Often they come across unsuitable content by accident, when they are searching for something else.

Sometimes they simply seek out material they are too young to view.

They are also led to it by YouTube’s own algorithm which feeds them suggestions based on their tastes.

Children prefer YouTube to old-fashioned television or TV on-demand services because they “could easily access exactly what they wanted to watch and were being served with an endless stream of recommendations tailored exactly to their taste”, the report said.

Many of the parents involved in the research were shocked to learn what their children had been watching.

 

The Credit Suisse Research Institute has published its sixth annual Emerging Consumer Survey – a detailed study profiling consumer sentiment and its drivers across the emerging world. South Africa once again ranks at the low end of a range of the survey’s indicators with continued disparities between income groups.

The 2015 survey shows a marked decline in overall consumer confidence, and not only has the gap between high and low-income groups increased but much reduced optimism in the middle income groups was also evident. A net 4% of respondents expected their personal finances to improve over the next six months, considerably lower than 11% last year.

Inflation expectations are elevated and a net 65% of respondents expected higher inflation, compared with the survey average of 46%. This contrasts with only a net 1.5% of consumers anticipating increased income over the next 12 months.

The majority of consumers still did not believe that now was a good time to make a major purchase, although sentiment was less negative than last year. Perhaps surprisingly, those who stated that they had no extra money for saving declined from 38% to 30%, putting South Africa below the survey average of 32%. There remain large disparities between low and high-income earners, which further increased in 2015.

Of note was a marked deterioration in the optimism of the low-income group (monthly incomes below ZAR 3,000), with a net 16% anticipating that the state of their personal finances would deteriorate, compared with 6% the year before.

South African consumers face multiple challenges in 2016, with higher inflation due to severe drought conditions and a weak currency, as well as likely interest rate increases demanding higher shares of already constrained disposable incomes.

The prospect of job cuts in the mining industry looms large, and will likely place further pressure on low-income households. Mid- and higher-income households will likely face further interest rate hikes this year and, combined with currency weakness, constrain purchases of higher-end, often imported products.

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My Office News Ⓒ 2017 - Designed by A Collective


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