WHO's 'flawed' claims of sick hospital prices dissected

31 August 2016 - 09:10 By KATHARINE CHILD
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Netcare claims regulating private prices as suggested by a World Health Organisation (WHO) report will devastate South Africa's private hospital sector.

The company said this in a presentation at a session of the Competition Commission's healthcare market inquiry on a study by WHO and the Organisation for Economic Co-operation and Development (OECD) yesterday.

The study claimed South Africans paid private healthcare prices similar to those charged in Germany and France, despite being in a far weaker economic position.

The study, commissioned by South Africa's Department of Health, suggested policies to control private healthcare price rises while ensuring accessibility and quality. OECD and WHO authors were flown from Europe to defend their data before the panel headed by former chief justice Sandile Ngcobo.

Actuaries, economists and hospital groups criticised the study's findings at yesterday's session, saying the "flawed" report could not be used to justify price control.

A key criticism was that the report compared private prices in South Africa to state healthcare prices in Europe.

The Hospital Association of SA said some European state health systems were funded by taxpayers and run at a loss, meaning their prices were unsustainable and could not be compared to those charged by businesses.

Netcare lawyer Anthony Norton said the study did not look at what it cost to run hospitals, pay nurses' salaries and buy drugs.

"You cannot come to the conclusion ... that a price is too high or it is excessive unless you have done a proper economic costing exercise," he said.

Norton said of the WHO study's regulation suggestion that it did "not seek to explain fully the reasons for high prices". And if it did not understand what drove hospital costs, it could not suggest price control, he argued.

"It would be entirely irrational to regulate theatre-price fees if the real price drivers are medical devices," Norton said.

Margaret Guerin-Calvert, president of the Centre for Healthcare Economics in the US, said another report showed "price regulation would significantly damage the sustainability of the private hospital market in South Africa".

Health Minister Aaron Motsoaledi, who attended the session, said he still believed that private-sector prices were "excessive".

"Guerin-Calvert is supposed to be an expert. She tried to stop similar reforms in America in terms of affordable healthcare.

"Now she is just coming here to oppose health reforms.

"Perhaps she gets paid to do this all over the world," Motsoaledi said.

OECD health economist Luca Lorenzoni said the organisation never suggested regulation, but was merely using the report to compare prices internationally.

"We keep hearing our study was about price regulation. This is not the case at all," said Lorenzoni.

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