Healthcare Sector Under the Whip

The first market inquiry to be undertaken by the Competition Commission in terms of the new provisions of the Competition Amendment Act is into the private healthcare sector.

The draft terms of reference for the inquiry have been published by the Commission. The investigation is set to launch anytime in the second quarter and certainly before 30 September 2013.


The private healthcare market as defined by the Commission refers to that portion of healthcare services that are paid for by private patients themselves, either through medical insurance payments or through out-of-pocket payments.

Key segments of the private healthcare market include healthcare providers, financing, administration and managed care services, and consumables.

The inquiry will focus primarily on the "stakeholders" in the private healthcare sector which include:

  • Primary sources - specialists and other practitioners, hospital groups, independent hospitals, clinics and other private hospitals, medical funders and administrator groups.
  • Secondary sources - government departments, statutory bodies, civil society, contributors to medical schemes and consumers of healthcare services on a secondary level.

Emergency services and pharmaceuticals have specifically been excluded from the scope of the inquiry.


The objective of the inquiry is to identify the factors that affect competition in the private healthcare market, and to provide a factual basis upon which relevant recommendations can be made in the interest of a more affordable, accessible and innovative private healthcare market. They intend to achieve this by evaluating:

  • The nature of price determination.
  • What factors have led to observed increases in private healthcare expenditure.
  • How consumers access information and the exercise of choice.
  • The introduction of appropriate policy and regulatory mechanisms.
  • Suitability of price-setting mechanisms.
  • The role of competition policy and competition law in achieving pro-competitive outcomes.

Conducting the inquiry

The market inquiry will comprise an inquisitorial process of public hearings, supported by information requests to and consultations with companies, associations and any other stakeholders that may be required to provide information on the subject matter of the inquiry.


It is estimated that the market inquiry will commence in the second quarter of 2013, but by no later than September 2013, and will issue its draft recommendations in December 2014. Final recommendations will be issued no later than 30 June 2015.

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