Healthcare rip-offs rife

13 November 2014 - 02:20 By Katharine Child
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The Board of Healthcare Funders has asked the Competition Commission to investigate the prices medical suppliers charge doctors and small hospitals for equipment such as needles, gloves, masks and tubing.

The board, which represents several medical aid schemes, suspects that buyers of relatively small volumes pay hugely inflated prices that include provision for kickbacks.

According to the board in a submission to the Competition Commission, suturing that big private hospitals group Netcare buys for R72.21 is sold to smaller buyers at R171.49, and a catheter sold to Life hospital group for R5.19 costs low-volume buyers R42.96.

The submission reveals that doctors and clinics pay up to 900% more for consumables than the three big hospital groups.

The huge discrepancy, says the board, implies that kickbacks are being paid to smaller buyers to induce them to stay loyal to their supplier.

If this is correct, it would be the second time the board has uncovered collusion in private healthcare. An investigation in 2007 revealed that suppliers had been paying kickbacks to Life, Mediclinic and Netcare in return for being recognised as their preferred suppliers.

For example, an item worth R12 would be sold to a hospital for R80 and at least half of the difference would go to the hospital group as a kickback.

Since the 2007 exposé hospitals have published what they pay for their medical supplies and for what they sell them to patients and medical aid schemes. The result has been lower prices.

According to the Board of Healthcare Funders, Mediclinic pays R1.02 for a tube of KY lubricant but the same product is sold to smaller buyers for R6.22.

The report says that the kickback system "to providers other than hospitals continues unabated".

In a submission to the Competition Commission, health economist Alex van den Heever said a full investigation into overcharging for medical consumables was needed.

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