SA's medical aid premiums rise more than inflation rate

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Cape Town, 12 March 2016 - The Competition Commission has concluded its first round of public hearings on private healthcare in Cape Town.

JOHANNESBURG – Medical aid premiums are rising yearly much more than the inflation rate.

The World Health Organisation  (WHO) said South Africa has one of the most expensive private healthcare systems in the world.

Prices are on par with that of Germany, France and the United Kingdom.

The Competition Commission is busy with a lengthy investigation into South Africa's private health care system.

It wants to determine if costs are driven up as a result of collusion in the sector.

To take a look at some of the costs involved, eNCA received quotes from two of the country's biggest private care providers.

For coronary bypass surgery at a Life or Netcare hospital one would have to cough up about R300 per minute in theatre.

The daily tariff for intensive care is between R19,000 and R22,000, while a blood transfusion is in the region of R24,000.

Watch: Is private healthcare putting profits before people?

Bypass surgery in a private hospital will cost a patient or medical aid between R260,00 and R380,000 and that’s just the hospital costs.

Medscheme said 40 percent of its expenses are hospital costs and 20 percent for specialists.

It said the increasing tariffs are exorbitant and unsustainable.

However, South Africa's largest medical aid Discovery said private hospital costs are in line with international standards, while the Netcare hospital group said it isn’t making an exorbitant profit.

"Competition courts have a precedent on that. So they look at the economic cost of delivering the service and if the mark-up you have on that service is 20%, that's normal. Anything above that they start asking questions. In the South African market, certainly as Netcare, it’s nowhere near 20% it's in the single digits, said Melanie Da Costa, Director of Strategy and Health Policy at Netcare.

Only 16 percent of the population are part of a medical aid scheme.

The WHO said private health care in the country is unaffordable for the vast majority.

"For the WHO what we are mostly concerned of is over lapses and over bill effect in the private sector and the affordability and accessibility of services for all South Africans because there are only so many doctors and so many resources devoted for health care and it seems that half of the resources are used by 16% of the population," said the WHO's Tomas Roubal.

The Competition Commission is set to release its preliminary findings in December.