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CAPE TOWN (Reuters) - South African competition authorities will launch an investigation into the private healthcare industry, where early evidence showed high prices and market distortions, Economic Development Minister Ebrahim Patel said on Tuesday.
The ruling African National Congress (ANC) is working on a long-term nationwide health insurance plan, but the $28 billion scheme will not be in place until 2025.
Until then, the ANC wants to reduce the cost of healthcare for the millions of South Africans who cannot afford to go private, Patel said.
"Various stakeholders have raised concerns about pricing, costs and the state of competition and innovation in private healthcare," he told reporters.
Patel said competition authorities had ruled previously that the practice of setting up common tariffs for medical procedures was uncompetitive.
"In reality we've seen a growing trend of healthcare prices and cost increases and some commentators have made the point to us that health markets contain a massive asymmetry of power," he said.
Patel said preliminary evidence showed that some that in some cases competition was "prevented, distorted or restricted."
Private health providers in Africa's largest economy include Life Healthcare, Mediclinic International and Netcare Ltd, all of whom have benefitted from the growth of the middle classes.
The Competition Commission, which can impose administrative fines, is expected to launch the "market inquiry" before September 2013. ($1 = 9.0222 South African rand)
Reporting by Samantha Lee; writing by Wendell Roelf