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Healthcare Inquiry says SA Needs a Supply-Side Regulator
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Healthcare Inquiry says SA Needs a Supply-Side Regulator

Other recommendations are that tariffs for prescribed medical benefits become binding, and that certificates of need replace hospital licences

The health market inquiry has recommended the creation of a dedicated supply-side regulator of healthcare, as a regulatory authority that would regulate medical practitioners and determine tariffs.

It has recommended that tariffs for prescribed medical benefits should be binding and that tariffs for non-prescribed medical benefit conditions will have the status of reference tariffs.

The inquiry has also recommended that certificates of need, as provided for in the National Health Act but never implemented, should replace the current system of hospital licences.

To address the high level of concentration in the hospital market, the inquiry has suggested that consideration be given to placing a moratorium on issuing new licences to the three large hospital groups — Netcare, Life Healthcare and Mediclinic.

The chairman of the inquiry, former chief justice Sandile Ngcobo, said at a media briefing on Thursday on the release of the inquiry’s provisional report, that current regulatory measures on the supply side of the healthcare market were limited and fragmented compared with other countries.

“In SA the supply side has generally been left to operate within a fragmented, poorly enforced regulatory system with weak oversight,” Ngcobo said.

The inquiry recommended supply-side regulation take place in four areas: healthcare capacity planning; conducting economic value assessments; implementation of appropriate payment mechanisms; and outcome measurement, registration and reporting.

Dealing with the pricing of health services, Ngcobo said in his speech that one of the most frequent complaints made to the inquiry was that there was currently a “tariff vacuum” in the private healthcare sector that made it very difficult for schemes and members to estimate and compare the costs of care among providers.

It recommended that the supply-side regulator would set tariffs. This could either be after extensive consultation with stakeholders in a public forum, or through a multilateral price-setting mechanism in which stakeholders would conduct tariff negotiations and reach agreement under a negotiation framework determined by the regulator.

Ngcobo said the regulator would be responsible for the adoption and standardisation of codes, descriptors and relative value units used by medical practitioners. Coding systems should be standardised to facilitate meaningful sharing of information.

“We recommend that practice code numbering, which is currently managed by the Board of Healthcare Funders, be assigned to the supply-side regulator, and that comprehensive annual reporting is built into the practice code numbering system to build a comprehensive national database of practitioners.”

Dealing with economic value assessments, Ngcobo said the inquiry could not find good evidence of publicly available, cost-effective standards of care and treatment protocols being used in the healthcare sector. “We recommend that standards of care, evidence-based treatment protocols and processes for conducting health technology assessments be developed.”

The supply-side regulator would also be responsible for health services monitoring, measuring the performance of providers, and monitoring the quality and outcomes of healthcare services.

With regard to healthcare capacity planning, the inquiry has recommended that the current fragmented licensing framework for healthcare facilities be replaced with a national licensing framework for all health establishments.

Stakeholders have until September 7 to comment on the inquiry’s provisional findings and proposed recommendations.

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