HEALTH Minister Aaron Motsoaledi has a far better relationship with the private sector than his much-lampooned predecessor, the result of a greater willingness to engage and negotiate rather than confront and dictate. Yet he is not having much more luck in achieving the government's goal of regulating private healthcare prices. Partly, that is because such meddling in the market is devilishly complicated, even when motivated by the best of intentions. Unintended - and, more often than not, undesirable - consequences are virtually guaranteed, demanding new interventions that invariably also have unpredictable consequences. As the Department of Health has now discovered on several occasions, the courts do not subscribe to the philosophy that the end justifies the means. Mainly, however, the state's lack of regulatory success seems to be a function of its inability to intervene in a manner that makes sense to anyone else, is administratively and procedurally fair, and can be backed up by solid research.

The department's attempts to set prices have been challenged time and again, and repeatedly rejected by the courts, because they are invariably ill-considered, ideologically motivated and badly implemented. In the latest blow to price controls, acting Judge Piet Ebersohn scrapped the department's controversial tariff guide for doctors, describing the process of establishing fees for private hospitals and private emergency services as "irrational and unreasonable". Former health director-general Thami Mseleku - now SA's ambassador to Malaysia - came in for especially harsh criticism and the costs order against the department spoke volumes. Appropriate skills and the capacity to do the work required to come up with acceptable pricing models are clearly in short supply in the department, which is not something Dr Motsoaledi can do much about in the short-term. But if the government is not up to the ambitious task it has set itself it should back off now rather than continue disrupting and weakening an imperfect but otherwise functional system.

Editorial Comment: 30 July 2010