On Friday the Health Market Inquiry (HMI) published a revised Terms of Reference (ToR), announcing a further postponement in the publication of its final report and recommendations,  from 30 November 2018 to 29 March 2019. This the latest in a series of postponements of the completion of the inquiry. In this blog post, we look back at a brief history of the HMI, highlighting the most significant events in this very long process. Econex has been briefed by Mediclinic to submit research and provide input on the process.

The HMI process commenced on 29 November 2013 with the publication of a notice stating the Competition Commission’s (CC) intention to conduct an inquiry into the private healthcare market. This was accompanied by the (original) ToR. The inquiry was initiated by the CC “because it has reason to believe that there are features of the sector that prevent, distort or restrict competition” and that the inquiry “[would] assist in understanding how it may promote competition in the healthcare sector”. The inquiry commenced on 6 January 2014, with the completion date set for 30 November 2015. The HMI’s initial Statement of Issues was published on 1 August 2014 along with a call for submissions from stakeholders.

In response, the HMI received a large number of submissions from various stakeholders. In October 2015 the completion of the Inquiry was postponed for the first time to 15 December 2016.

Public hearings commenced on 16 February 2016 and were scheduled to last until 9 June 2016. However, on 12 April 2016 a notice was released stating that a second round of hearings would be conducted. The Panel decided which stakeholders were granted an opportunity to make presentations on specific issues. By the end of 2016 the completion date of the Inquiry was, once more, extended to 15 December 2017.

The HMI released its Descriptive Statistics and Attribution Analyses reports on 1 December 2016. The cost attribution analysis “attempt[s] to identify the ‘unavoidable drivers’ of cost escalation in the private sector, thus isolating a residual segment of increased costs that are amenable to intervention.” Following the release of the reports, stakeholders’ experts were granted access to the HMI Data Room for the first time in May and June 2017. Access was granted in order to facilitate the interrogation on the underlying data and analyses relied on by the HMI. Four such opportunities were granted between May 2017 and August 2018.

This was followed by the publication of a set of five reports on 8 December 2017 (along with the postponement of the completion of the HMI to 31 August 2018), and another three reports on 15 December 2017. These reports contained further quantitative analyses based on facilities and schemes data for the period 2010 to 2014. Thorough interrogation of the reports, however, again raised questions around results and analyses. Stakeholders’ experts were again allowed into the data room. An investigation of the data and analyses raised many questions and indicated a strong need for further engagement by stakeholders is understanding and explaining the issues identified.

The HMI finally released its Provisional Findings and Recommendations Report on 5 July 2018. The almost 500-page report and accompanying appendices and annexures suffered from similar issues identified in individual reports published by the HMI. As a result, stakeholders’ experts  against requested and were granted access to the data room, which (among other reasons) resulted in the extension of the deadline of the publication of the final report to 30 November 2018.

A deadline of 7 September 2018 was set for comments on the report, with some parties being granted extensions to 15 October 2018. By 13 November 2018, the HMI had received 65 submissions. Had the publication of the Final Report not been postponed, the monumental task to thoroughly review each of the submissions and compile a Final Report taking account of all comments would have needed to be completed in less than 60 days.

While the delays have contributed to policy uncertainty in this sector and the process has not been particularly well managed, the latest postponement is probably justifiable given the number and extent of comments received. This at least must be an indication that the HMI panel will seriously consider these comments before publishing the Final Report and Recommendations.

Author/s: Elize Rich

Nothing in this publication should be construed as advice from any employee of Econex and should be seen as general summaries of developments or principles of interest that may not apply to specific circumstances.