1. ENFORCEMENT AND EXEMPTIONS
AN OVERVIEW OF COMPETITION LAW IN SOUTH AFRICA, AS IT RELATES TO HEALTH CARE
23 JULY 2007
NANDI MOKOENA
ENFORCEMENT AND EXEMPTIONS

2. PRESENTATION OUTLINE COMPETITION LAW AND ITS PURPOSE
COMPETITION COMMISSION’S (“CCSA”) INVOLVEMENT IN HEALTH CARE
COMPETITION LAW AS IT APPLIES TO HEALTH CARE PROVIDERS
RESEARCH STUDY INTO PRIVATE HOSPITAL COSTS
COMPETITION LAW AS IT APPLIES TO THE FUNDING SECTOR

3. COMPETITION LAW AND ITS PURPOSE
CCSA and the new competition regime established in terms of the Competition Act 89 of 1998, as amended (“the Act”).
Purpose of the Act is to promote and maintain competition in order to:
promote efficiency, adaptability and development of economy;
provide consumers with competitive prices and product choices;
ensure that SME’s have opportunity to participate in economy;
Section 2(a) – (f) provides further.

4. COMPETITION LAW AND ITS PURPOSE
CCSA fulfills this purpose through:
evaluation of complaints
evaluation of mergers
conducting research
engaging in advocacy
Provisions of the Act are carried out by:
CCSA (investigative)
Competition Tribunal (adjudicative)
Competition Appeal Court (appeals)

5. CCSA’S INVOLVEMENT IN HEALTH CARE
Enforcement & Exemptions matters:
managed healthcare arrangements
collusion amongst competitors
access to HIV medicines
advocacy
NHN exemption application
Mergers and Acquisitions matters:
Afrox Healthcare Ltd & Wilgers Hospitals Ltd
Medi Clinic & Curamed
Business Ventures Investments & Afrox Healthcare
Medi Clinic & Wits Univ DGMC (Pty) Ltd
Medi Clinic & Protector
Netcare & Community Hospital Group (pending)

6. COMPETITION LAW AS IT APPLIES TO HEALTH CARE PROVIDERS
Competition Act applies to all economic activity within or having an effect within the Republic, except: –
collective bargaining
collective agreement
concerted conduct designed to achieve a non-commercial socio-economic objective or similar purpose
To the extent that health care providers are engaged in economic activity which falls outside the above exclusions, the Act applies to them
Consumers of health care are also vulnerable to potential anti-competitive conduct and should be protected by the Competition Act

7. COMPETITION LAW AS IT APPLIES TO HEALTH
CARE PROVIDERS
Current matters involving service providers:
Community Hospital Group v Netcare (pending)
Independent pathologists v Netcare, Medi-Clinic and others (pending)
BHF v SAMA (pending)
Research study concerning private hospital costs

8. RESEARCH STUDY INTO PRIVATE HOSPITAL COSTS
Research study brought about by:
national effort to reduce private hospital costs
general concerns raised regarding hospital costs
Phodi-Clinics merger finding
Purpose of the study is to determine:
possible contraventions of the Competition Act;
possible competition solutions
Research study involves:
consultation with regulators
consultation with hospitals
consultation with other industry participants
consultation with public

9. COMPETITION LAW AS IT APPLIES TO FUNDING SECTOR
Competition law prohibits price fixing (fee schedules in professions)
Information asymmetry in health care (and professions generally) requires that consumers be protected
From a competition perspective, function is better fulfilled by the State (after consultation) rather than competitors in an industry, hence the decision in CC v BHF
National Health Reference Price by the Department of Health
Medical Schemes require countervailing power

10. COMPETITION LAW AS IT APPLIES TO FUNDING SECTOR
Medical Schemes lack countervailing power
Competition Act provides for exemption applications if conduct contributes to:
Maintenance and promotion of exports
Promotion of ability of SME’s or firms controlled by HDP’s to become competitive;
Change in productive capacity necessary to stop decline in an industry;
Economic stability of any industry designated by the Minister, after consultation with Minister of that industry