The Malawi Health Equity Network (Mhen) and the Competition and Fair Trade Commission (CFTC) have said Medical Aid Society of Malawi (Masm) may be breaching consumer rights by running own clinics and pharmacies.
But Masm has wondered how its running of clinics and pharmacies culminates into alleged unfair trade practice when it does not bind its members to go to its clinics.
Mhen executive director Martha Kwataine said in an interview this week Masm ownership of clinics and pharmacies may create room for price manipulation.
“[Ownership of clinics and pharmacies] may compromise on the quality of service in order to maximise profits and, therefore, impinge on fair trade and competition which are even good for health service consumers whose rights are often violated.
“When one is ill, a patient’s life is deemed to be in the hands of the health service providers, a situation that has often been abused by service providers,” said Kwataine.
CFTC executive director, Charlotte Malonda, commenting on Masm’s forward integration said the consumer protection agency believes that the move by the medical scheme could result in some anti-competitive effect.
“Masm is a dominant market player in provision of medical services including the payment for medical fees for registered paid up members and their beneficiaries. But the introduction of clinics and pharmacies downstream may have an anti-competitive effect as they are likely to give preference in relation to remittance of fees to their own clinics at the expense of other clinics and having an impact on consumer choice, as more and more health service providers may get frustrated,” said Malonda.
She added that they have been investigating Masm’s case since September 2013, and are gathering market intelligence to measure the impact of the move.
The consumer protection agency further said the Masm hospital services may be used as trendsetting in terms of fees for specialists’ services which may be detrimental to the manner in which other clinics would want to operate.
Malonda added that Masm clinics and pharmacies are not profitable operations as reported in the demutualisation debate, yet their fee schedules could be taken as ceilings.
But Masm chief executive officer Sydney Chikoti in a telephone interview on Wednesday said the medical aid society does not bind its members to go to its clinics.
“We do not understand why running of clinics and pharmacies is an unfair trade practice. Masm is a membership society and it is the members that decide on how to run through annual general meetings to get the best from their contributions,” said Chikoti.
He added that the organisation negotiates with practitioners and major hospitals on tariffs and fees.
Masm has been posting losses since 2008 due to factors including a hostile economic environment, governance issues, stagnation in numbers and non-performance of medi-clinics.
Statistics provided by CFTC indicate that although the provision of health services is competitive, the health insurance sector is not.
According to the agency, Masm controls about 84 percent of the market share, Momentum Health comes second with an estimated market share of about 10 percent. Other notable players include Liberty Health Malawi and Horizon Health.