Competition Act, 1998 (Act No. 89 of 1998)

Notices

Extension of the Conditional Exemption granted to the National Hospital Network

Notice No. 4126 of 2023

Purchase

Notice No. 4126

1 December 2023

GG 49791

Department of Trade, Industry and Competition

The Competition Commission of South Africa

On 8 August 2017, the National Hospital Network filed an exemption application with the Competition Commission (“the Commission”) in terms of section 10(3)(b)(ii) of the Competition Act No. 89 of 1998, as amended (“the Act”). The conduct for which the exemption was sought related to the collective bargaining between the shareholders of the NHN and individual medical schemes and administrators, as well as agreements that resulted from the collective bargaining.

The Commission published a Notice of the conditional granting of the NHN application for exemption in the Government Gazette on 7 December 2018 (government Notice No 42092 of 2018), as provided for by section 10(7) of the Act read with Rule 19(5) of the Rules of Conduct of Proceedings in the Commission.

3.	More specifically, the Commission granted the NHN an exemption from section 4(1)(b)(i) of the Act permitting it to continue to engage in the following activities on behalf of its members with medical aid schemes and/or medical scheme administrators;—

a.	NHN’s members shall agree collectively to implement the prices negotiated and entered into on their behalf by NHN with medical schemes and/or medical scheme administrators; and

b.	Promote the interests of its members and to market their services and also to provide a base for benchmarking which would help NHN members to increase efficiencies.

In addition to above exemption, the Commission granted the NHN a further exemption to engage on behalf of its members in global fee negotiations with medical schemes, administrators, the State and healthcare providers (professional associations) and to undertake collective or centralised procurement. The Commission considered and assessed these three self-standing legs of the exemption separately.

5.	The exemption application by the NHN relating to all three self-standing legs was granted by the Commission for a period of five (5) years commencing on 1 November 2018 and ending on 31 October 2023.

On 27 September 2023, the NHN filed a new exemption application on behalf of its members for a period of five (5) years commencing on the date of approval of the application by the Commission. The scope of the NHN’s most recent exemption application included a request that its previous exemption from section 4(1)(b)(i) of the Act be extended and that it be permitted to continue to engage in collective bargaining arrangements on behalf of its members and individual medical schemes and administrators, as well as agreements that result from the collective bargaining. Further, the NHN requested to be permitted to continue to engage on behalf of its members in global fee negotiations with medical schemes, administrators, the state and healthcare providers (professional associations) and to undertake collective or centralized procurement.

In addition, the NHN requested that its exemption, which was set to expire on 31 October 2023 be extended to allow for assessment of its new exemption application. After due consideration of the request from the NHN, the Commission has decided to extend the NHN’s exemption by a period of six (6) months starting form 1 November 2023 ending 30 April 2024. The conditions applicable to the exemption expiring on 31 October 2023 will remain the same.

Notice is hereby given in terms of Section 10(7) of the Competition Act regarding the Commission’s decision to grant the extension of this exemption. The Applicants and any other person with a substantial material interest affected by this decision may appeal to the Competition Tribunal in the prescribed manner in terms of Section 10(8) of the Competition Act. Any queries in this regard should be directed to:

Dr Thabang Ndlovu

Competition Commission

Market Conduct Division

Email: [email protected]

Mr Tlabo Mabye