Bonitas claims price war victory over Life Healthcare

Bonitas, South Africa’s third largest medical scheme, is claiming victory in what it believes is the beginning of a competition and price war with private hospitals, notes Rapport.

The newspaper reported that Bonitas announced the exclusion of 14 large Life Healthcarehospitals for its 750,000 insured lives and warned they may do the same with other major groups.

Bonitas spends R360m annually at the 14 Life hospitals, and has imposed a 30% co-payment for members who continue to use these hospitals. Life Healthcare head of financers’ relations, Matthew Prior, says the group has waived the 30% so that Life patients who are members of Bonitas may continue to use their facilities without a financial burden.

The report says that according to acting chief officer Gerhard van Emmenis, this effectively means a 30% discount for Bonitas and a much better deal for the scheme. ‘I think every medical scheme is now standing at Life’s door asking why they cannot also get a 30% discount.’

He says the gap between the tariffs negotiated by the two largest schemes – Discoveryand GEMS – and what smaller schemes pay hospitals is getting wider. Bonitas plans to target the National Hospital Network (NHN) – a group of independent private hospitals – next.

NHN has an exemption from the Competition Commission to bargain as a collective with medical schemes, but Bonitas is planning to challenge this practice in court.