"We exceed GDP [gross domestic product] of healthcare costs … We are a country spending more on health but having poor outcomes," he told delegates at the annual Competition Commission conference in Johannesburg.
In 2009, the health expenditure in South Africa was 8.51% of GDP, according to a World Bank report.
This was considerably higher than the 5% recommended by the World Health Organisation.
Motsoaledi said uncontrolled commercialisation was "consuming" healthcare in the country.
"Part of the reason for this is due to a lack of basic essentials, caused in part by uncontrolled commercialism … whereby tenders come first and healthcare comes last," he said.
Motsoaledi said inflation on items were costing medical aid companies, including Discovery, about R2-billion a year and had resulted in escalated medical premiums.
In "desperation" medical aids were reducing benefits "further and further", he said, adding that the regulation of the private sector proved to be difficult.
An inquiry was needed to deal with this because healthcare had to be customised to meet the needs of the patient.
"There is only one loser … and it's the patient … when medical aids don't pay in full, the patient is still the loser … the patient is always the loser," said Motsoaledi.
"In South Africa, we still think little of primary healthcare … While premiums [of medical aids] are increasing, patient care is declining."
He noted that due to the global economic crisis, many countries were tempted to reduce social services, especially health.
"Health is a public good and not just any other commodity.
'Affordability of healthcare'
"I don't know any minister of health in the world who is not worried about the affordability of healthcare."
He said health was not something that could recover because if someone was ill, they might die.
Referring to the Declaration of Alma-Ata, the minister said more needed to be done to make the dream a reality.
The Declaration of Alma-Ata was adopted at the International Conference on Primary Healthcare in 1978.
It expressed the need for urgent action by all governments and the world community to protect and promote the health of all people.
This was the first international declaration underlining the importance of primary healthcare. It resolved to achieve "health for all by the year 2000".
"This dream never happened," said Motsoaledi.
He said there were two types of healthcare: costly private care for the privileged and second rate care for everyone else.
"Medical aid schemes punish the poor … healthcare is simply becoming unaffordable to people in the world."
On the National Health Insurance (NHI), Motsoaledi said it was not a beauty contest between the public and private sector. It was an attempt to better the services to the people of South Africa.
The NHI is a financing system that aims to ensure citizens are provided with essential health care, regardless of their employment status and ability to make a direct monetary contribution.
Healthcare was becoming the focus of the work of the Competition Commission, as it intends examining the private health system in South Africa and abuse in the markets. – Sapa