Private healthcare companies continue to build new facilities and doctors have been referring patients to hospitals to fill the beds, with some patients not needing to go there in the first place. This was one of a number of findings from the Competition Commission’s report on the costs of private healthcare, released on Thursday.

Releasing an interim report into the Competition Commission’s inquiry into the private healthcare sector, chairperson retired Justice Sandile Ngcobo on Thursday said doctors have probably been unnecessarily referring patients to hospitals, to fill the private sector’s rapidly expanding number of beds, in part explaining the rapidly increasing costs to medical aid users.

The four-year investigation found evidence that as private healthcare facilities have expanded, doctors have been referring patients to seek treatment in hospital despite them being able to receive care without having to go to hospital.

“In healthcare markets the doctor decides what treatment a patient should receive. Patients do not know what care they need and are not able to critically assess the doctor’s advice,” said Ngcobo, speaking in Sandton on Thursday.

“So if there are more beds available they can be used, and in healthcare they will be,” said the retired justice. “If you can go to specialists rather than a GP or a nurse, you will.”

The inquiry’s interim report, on which stakeholders have until September to comment, investigated the rapidly rising costs to private healthcare users and the information on what’s called “supply-induced demand”, which partly explains why medical aid is so expensive.

Between 2010 and 2014 average medical aid costs increased by 9.2% a year for users of open medical schemes (not company programmes) and the commission found that the cost increases that were unexplained, perhaps unjustified, were in-hospital costs.

Speaking of doctors making unnecessary referals, Ngcobo said:

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