The Health Funders Association (HFA) has welcomed the Interim Block Exemption for Tariffs Determination in the Healthcare Sector introduced yesterday by the Minister of Trade and Industry (DTI) Parks Tau but cautioned against a "one Size Fits all" approach.

Tau introduced the draft Interim Block Exemption for Tariffs Determination in the Healthcare Sector, 2025 (“draft block exemption”) aimed at regulating the healthcare costs.

in response, HFA stated that this is a significant step towards improving pricing transparency and affordability for medical scheme members. Still, a “one-size-fits-all” approach could undermine healthcare quality and innovation.

the association suggested a holistic and coordinated approach to controlling medical inflation and the strengthening of financial protection for medical scheme members.

“The draft regulations aim to establish maximum pricing by healthcare practitioners for Prescribed Minimum Benefits (PMBs) and non-PMBs, standardise procedure coding, determine quality metrics, set medicine formularies, and define treatment protocols — issues that have long plagued both medical schemes and healthcare providers.

“PMBs are a defined set of benefits that medical schemes must provide complete, unlimited cover for, with no co-payments or deductibles for diagnosis, treatment, and care costs.

“Capping tariffs will provide medical schemes with greater budget certainty when designing and planning member benefits and can ultimately reduce the cost of cover," it said.

The organisation stated that most medical schemes have entered into Designated Service Provider (DSP) agreements to financially protect their members from PMB-related costs and that the agreements often include quality-related aspects to improve healthcare outcomes. However, it said price regulation alone will not effectively manage the cost of medical scheme cover, as the volume of services remains a key cost driver.

“A regulatory framework that supports innovative contracting approaches — encouraging efficient use of healthcare resources and promoting quality outcomes — is critical. This aligns with the Health Market Inquiry’s (HMI) recommendations underpinning the DTI draft regulations.”

On aligning incentives through alternate reimbursement models, HFA suggested that the Tariff Governing Body (TGB), which will ensure high-quality care at the best price, be renamed the Reimbursement Governing Body, reflecting its broader role in transitioning from the current fee-for-service model to value-based care models.

“This body should establish minimum standards for alternate reimbursement mechanisms and ensure transparency by defining and sharing treatment data when alternate remuneration methods are applied.

“The focus should not be solely on lowering prices but on creating remuneration structures that support high-quality healthcare outcomes for members.”

It also cautioned against reinforcing the outdated fee-for-service model, saying that it prioritises quantity over quality. It also urged the government to fully implement the HMI recommendations, enabling value-based payment models where “providers are fairly rewarded” for patient outcomes rather than service volume.

On the composition of the TGB and Multi-Lateral Negotiating Forum committee, it urged the government to ensure fair representation from all key stakeholders — particularly health funders representing medical scheme members and healthcare providers.

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Health Funders welcome reforms but warn against ‘one size fits all’ approach to healthcare