The Minister of Trade, Industry, and Competition, Parks Tau, has urged the public to engage and provide input on the draft Interim Block Exemption for Tariffs Determination in the Healthcare Sector, 2025 (“draft block exemption”) for public comments.

During a media briefing on Monday, Tau said the draft block exemption seeks to create a multi-stakeholder framework for tariff determination for healthcare services.

He stated that the draft block exemption aims to contribute to the affordable “progressive” realisation of the right to have access to healthcare services.

“There is a serious concern about access to private healthcare in the country, given the high levels of market concentration and high prices. The cost of private healthcare should remain in check to ensure that most South Africans have access to affordable healthcare.

“Hence, the Government supported the Competition Commission in undertaking a market inquiry into the private healthcare sector,” said Tau.

He stated that the 2019 Competition Commission’s Health Market Inquiry (HMI), chaired by former Chief Justice Sandile Ngcobo, sought to provide insights into the factors driving inefficiencies in the private healthcare sector in South Africa.

“The HMI found that the private health sector is characterised by high and rising costs of healthcare and medical scheme cover, declining benefits, and significant overutilisation of health services, without stakeholders demonstrating associated improvements in health outcomes.

“The HMI also found that the lack of a tariff determination framework, among other factors, has led to these inefficiencies.

“Importantly, given the lack of a structured price determination framework, the HMI found that there has been abuse in the pricing of Prescribed Minimum Benefits, as well as non-Prescribed Minimum Benefits, in the form of over-utilisation of services and co-payments, thus driving up the cost of healthcare.”

The HMI further found that the Commission's phasing out of collective negotiations in 2003 led to an imbalance of market power and unsustainable pricing practices.

The Commission recommended the establishment of a Supply-Side Regulator for Health that would regulate the supply side of the private health sector, including tariffs for health services

Tau announced that the Tariffs Governing Body (TGB), which will consist mainly of experts responsible for providing oversight in the tariff determination process, and the Multilateral Negotiating Forum, which will consist of multiple stakeholders and will serve as the primary forum for collectively determining the maximum tariffs for prescribed and non-prescribed minimum benefits for healthcare services.

“However, it is essential to note that the proposed multilateral negotiating forum excludes private hospitals. The private hospital market is highly concentrated.

“This is because the three largest hospital groups already possess significant market power due to their size and account for approximately 80% of the beds in the private hospital market.

“Moreover, their exclusion aligns with the model recommended by the HMI following its assessment of bargaining dynamics among various stakeholders,” said Tau.

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