The National Assembly’s Portfolio Committee on Health has expressed concern over delays in implementing the recommendations of the Health Market Inquiry (HMI), warning that slow progress continues to affect access to affordable private healthcare.
The HMI, initiated by the Competition Commission in 2014 and chaired by former Chief Justice Sandile Ngcobo, was established to investigate rising costs and potential anti-competitive practices in South Africa’s private healthcare sector. Its final report, released in 2019, found that the market is characterised by high costs, high levels of concentration, and weak regulatory mechanisms, and called for wide-ranging structural reforms.
In a briefing this week, the Council for Medical Schemes (CMS) updated the committee on steps taken to implement the HMI’s recommendations, particularly those contained in Chapter 9 of the report, which deals with market structure, pricing, benefit design, and transparency.
However, the committee said the presentation reflected “more hopes and intentions than concrete, measurable actions”, raising questions about the regulator’s effectiveness and commitment to reform.
Members also pressed the CMS on accountability, timelines, and the lack of visible enforcement action, noting it has been seven years since the HMI’s final recommendations were published.
CMS outlines progress on reforms
The CMS told the committee it is implementing the HMI recommendations through a phased and structured approach, emphasising that reforms must be legally sound, consultative, and aligned with the National Department of Health.
On benefit design, the regulator said it supports the introduction of a standardised base benefit package and has already developed a framework, which is currently under review following public consultation. This work is being processed through the Prescribed Minimum Benefits (PMB) review structures. In parallel, CMS has begun building a relational database of scheme benefits to enable meaningful comparison across options – an attempt to address long-standing information asymmetry in the market.
Additional interventions include the introduction of a choice architecture framework, incorporating default options, and the development of the Benefits Bridge platform to improve how benefit options are structured and understood.
The CMS also noted that its annual industry reports already provide comparative data on benefit performance, contributions, and non-healthcare costs to support more informed consumer decision-making.
However, the CMS acknowledged that progress on standardised benefits is constrained by provisions of the Medical Schemes Act (MSA), particularly restrictions on risk-rating, which limit how certain HMI recommendations can be implemented in practice.
On PMB reform, the regulator reported ongoing work through advisory committees, including efforts to update definitions and reduce disputes. It has also developed and costed a primary healthcare (PHC) package intended to strengthen preventative care and improve access. This work is being aligned with parallel policy development within the Department of Health, although final implementation depends on policy direction and regulatory amendments.
In addressing market structure and pricing, the CMS reiterated its support for a risk adjustment mechanism to reduce incentives for schemes to select lower-risk members.
However, it noted that such a mechanism cannot be implemented without legislative change. Similarly, efforts to introduce supply-side regulation – including a multilateral tariff negotiation framework – are being developed in collaboration with the Department of Health and the Competition Commission, following earlier attempts that faced stakeholder resistance and required further revision.
On governance and member protection, CMS said it has strengthened oversight through circulars and guidelines, including measures to improve access to annual general meetings and increase member participation. It also highlighted ongoing trustee training programmes and efforts to make regulatory contact details more visible to members.
In terms of transparency, the CMS pointed to the separate disclosure of broker fees in its annual industry reports since 2019 as a key reform, allowing members to better understand cost components within medical scheme contributions.
Overall, the CMS maintained that progress has been made across several areas, but emphasised that implementation remains complex, with key constraints including legislative limitations, the need for stakeholder consultation, and alignment with broader health policy reforms.
Structural constraints remain
Despite these developments, the CMS acknowledged that several key reforms remain constrained by legislative limitations and require amendments to the MSA.
These include the implementation of a risk adjustment mechanism to prevent risk selection, as well as broader supply-side regulation to address pricing and market concentration. The CMS said it is working with the Department of Health and the Competition Commission on these issues, including the development of a multilateral negotiation framework for pricing.
The committee highlighted these legislative bottlenecks as a major concern, particularly the absence of mechanisms to enable risk equalisation and standardised benefit packages. It called for a clear legislative roadmap and timelines for reform.
Pressure on accountability and timelines
Committee members also raised concerns about governance, member protection and fairness in the system, including waiting periods, cost structures and access to information.
They emphasised the need for greater transparency to enable consumers to make informed decisions and called for stricter cost-control measures in line with the HMI’s recommendations.
The CMS acknowledged delays and undertook to provide a detailed implementation timeline, as well as a dashboard tracking progress on each recommendation.
The committee has requested written responses to outstanding questions within seven days and plans to hold a follow-up meeting, which will include affected stakeholders.
