A changing landscape

The Department of Health is trying to push contested pieces of legislation through Parliament in the dying days of this year’s session.

The first—the Draft National Health Amendment Bill—will alter the 2003 National Health Act to enable the minister of health to establish a central bargaining chamber for negotiations on some prices in the private sector.

The version of the Bill that was published for comment sets up a system of negotiations on price increases in the private sector.

One reason for this proposed negotiation is that medical aids are forced to cover certain conditions, the prescribed minimum benefits (PMBs).
There is concern that schemes are at risk of being exploited by service providers who know the schemes have no choice but to pay for PMB-related services. Also under the spotlight is the effect on costs of market concentration among the top three private hospital groups, which account for about 80% of the market, according to the industry regulator.

The putative Draft National Health Amendment Bill is under attack on two broad fronts.

The proposed negotiation framework has lit a firestorm in the media from some stakeholders who are not enthusiastic about being included in the pricing mechanism. Among the suggestions made by interested parties are that price negotiations will deter investors from South Africa, lead to a mass exodus of clinicians, especially specialists, and ultimately lead to the destruction of private healthcare.

But there is also criticism from stakeholders who support the need for price regulation, but want it to be done transparently, sustainably and in line with the Constitution.

The legislation was also criticised because it appears to give the minister of health excessive influence, which undermines the power of the proposed negotiating body by removing its independence. The minister not only appoints the price negotiation team, but can also decide whether to accept its recommendations.

In the form in which the draft legislation was published this would undermine the negotiation process and could ultimately lead to conflict.

The legislation was also ­criticised for being badly drafted, with some insiders fearing it could become tied up in legal challenges, as happened with the regulation of dispensing fees.

The second controversial piece of proposed legislation is the Draft Medicines and Related Substances Amendment Bill. This proposes the abolition of the Medicines Control Council (MCC), which regulates the registration and sale of medicines in South Africa.

The MCC will be replaced by a South African Health Products Regulatory Authority, which will have a much wider oversight role that will include medical devices, cosmetics and some foods.

This proposed legislation has also come under attack, with its detractors saying it gives the minister of health unprecedented powers over the registration of medicines and medical products.

On grounds of the national interest, the minister of health could block the sale of products that have passed the classic medical regulatory requirements of safety, efficacy and quality control. According to the draft Bill the minister could exempt products from part of or all of the Act.

The Aids Law Project (ALP) threatened to challenge this legislation in court. In its submission on the draft legislation the ALP described the Bill as ‘irredeemably flawed” and signalled ‘the final death knell of the scientific governance of medicines and clinical trials in South Africa”.

This year the parliamentary calendar was shortened, so to have any hope of being passed into law proposed legislation must reach Parliament by early June. To get to that stage, it has to be approved by Cabinet and go through a consultative process that allows interested parties to make comments, which should be considered by the department of health.

Insiders say that last weekend saw policymakers, lawyers and technocrats refining the Draft National Health Amendment Bill in the light of the comments and submissions made by stakeholders during the consultation process. The refurbished proposed legislation will head to Cabinet this week to make the parliamentary deadline.

Meanwhile, quietly heading towards Parliament behind the two contentious pieces of legislation is the widely accepted Medical Schemes Amendment Bill.

This legislation establishes the Risk Equalisation Fund, which spreads healthcare risks across medical schemes. The intention is that those schemes with a more costly client base—for example those with a high proportion of retired members—are subsidised by schemes that have the benefit of members who are still young and hopefully healthy. The aim is to achieve a single risk pool while retaining individual medical schemes. Schemes will then have to differentiate themselves by cost and quality of the healthcare cover they provide.

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