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Pricing and competition in Specialist Medical Services: An Overview for South Africa

Author

Listed:
  • Ankit Kumar

    (OECD)

  • Grégoire de Lagasnerie
  • Frederica Maiorano
  • Alessia Forti

Abstract

Major disparities in the cost of health care have made the pricing of specialist and hospital services a contentious issue in South Africa, particularly in the private sector. To help inform policy debate, this paper profiles selected experiences on the pricing of health services, competition policy and models of buying specialist health care services from the private sector across the OECD. Firstly, South Africa is compared to OECD countries to identify countries where voluntary private health insurance – the major source of financing for private hospitals – plays a similar role. Second, this paper provides an overview of price setting across OECD health care systems. It then covers the economic rationale and the institutional arrangements which OECD countries have established to set prices, before moving to an overview of competition policy considerations surrounding these arrangements. Finally, the paper highlights a few models of buying services from the private sector for public patients, with a particular focus on Mexico and Turkey. It is argued that South Africa should separate the task of establishing a schedule of medical services from negotiations over overall payments to medical professionals. La tarification des services spécialisés et hospitaliers est devenue en Afrique du Sud, en particulier dans le secteur privé, une question controversée suite à d'importantes disparités dans le coût des soins de santé. Pour éclairer le débat politique, ce document décrit différents exemples de tarification des services de santé, de politique de concurrence et des modèles d'achat de services de soins spécialisés au secteur privé dans la zone OCDE. Dans un premier temps, l’étude compare l'Afrique du Sud à d'autres pays de l'OCDE pour identifier les pays où l'assurance-maladie volontaire privée - la principale source de financement pour les hôpitaux privés en Afrique du Sud - joue un rôle similaire. Il donne ensuite un aperçu de la fixation des prix dans les systèmes de santé de l'OCDE. Puis, il aborde la logique économique et les dispositifs institutionnels mis en place par les pays de l’OCDE pour fixer les prix, avant de présenter une vue d'ensemble de la réflexion concernant la politique de la concurrence autour de ces arrangements. Enfin, le document expose quelques modèles d'achat de services au secteur privé pour les patients du secteur public, en développant plus particulièrement les exemples du Mexique et de la Turquie. Il apparaît que l'Afrique du Sud devrait séparer d’un côté l’élaboration d’une liste de services médicaux et de l’autre les négociations faites sur l'ensemble des paiements des professionnels de santé.

Suggested Citation

  • Ankit Kumar & Grégoire de Lagasnerie & Frederica Maiorano & Alessia Forti, 2014. "Pricing and competition in Specialist Medical Services: An Overview for South Africa," OECD Health Working Papers 70, OECD Publishing.
  • Handle: RePEc:oec:elsaad:70-en
    DOI: 10.1787/5jz2lpxcrhd5-en
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    Cited by:

    1. Sean Dougherty & Luca Lorenzoni & Alberto Marino & Fabrice Murtin, 2022. "The impact of decentralisation on the performance of health care systems: a non-linear relationship," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(4), pages 705-715, June.
    2. Barber, Sarah L. & Kumar, Ankit & Roubal, Tomas & Colombo, Francesca & Lorenzoni, Luca, 2018. "Harnessing the private health sector by using prices as a policy instrument: Lessons learned from South Africa," Health Policy, Elsevier, vol. 122(5), pages 558-564.
    3. Sarah L. Barber & Luca Lorenzoni & Paul Ong, 2020. "Institutions for health care price setting and regulation: A comparative review of eight settings," International Journal of Health Planning and Management, Wiley Blackwell, vol. 35(2), pages 639-648, March.
    4. Balaraman Rajan & Tolga Tezcan & Abraham Seidmann, 2019. "Service Systems with Heterogeneous Customers: Investigating the Effect of Telemedicine on Chronic Care," Management Science, INFORMS, vol. 65(3), pages 1236-1267, March.
    5. Benjamin Montmartin & Marcos Herrera-Gomez, 2022. "Imitative Pricing: The Importance of Neighborhood Effects in Physicians' Consultation Prices," GREDEG Working Papers 2022-02, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    6. Montmartin, Benjamin & Herrera-Gómez, Marcos, 2023. "Spatial dependence in physicians’ prices and additional fees: Evidence from France," Journal of Health Economics, Elsevier, vol. 88(C).

    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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