The Competition Tribunal has dismissed an application for interim relief brought by Life Healthcare Group (Pty) Ltd and Life Renal Care (Pty) Ltd (collectively “Life”) against Mediclinic Southern Africa (Pty) Ltd and Mediclinic Renal Services South Africa (collectively “Mediclinic”). The application concerned the exclusion of Life from providing in-hospital dialysis services to patients at five Mediclinic hospitals.

Context

Dialysis entails the removal of excess water, solutes and toxins from the blood in patients whose kidneys are incapable of performing this function. Dialysis is prescribed by specialist physicians or nephrologists who refer patients to dialysis services providers. It is administered to both inpatients and outpatients.  Patients who receive dialysis services in a hospital, because they have been admitted to the hospital, are referred to as inpatients. Outpatients are patients who have not been admitted to a hospital.

Chronic and acute inpatients receive dialysis through in-hospital or mobile dialysis units. In-hospital units are fixed to the hospital premises, typically at intensive or high care units, and provide bedside treatment. Mobile units transport equipment to hospitals where they are granted access and storage space for their equipment. 

Chronic outpatients, who require ongoing dialysis, can receive treatment either at in-hospital units or at standalone clinics operating independently of hospitals. Outpatient dialysis administered in hospital mimics that of standalone clinics which only offer services to chronic outpatients.

The parties’ dialysis services

Life Renal offers dialysis services through: (i) in-hospital dialysis units at various Life hospitals; (ii) mobile units at Life hospitals which do not have resident dialysis units, as well as other third-party hospitals; and (iii) standalone clinics which operate outside of hospitals.

Mediclinic Renal Services provides dialysis services within Mediclinic hospitals and operates a few co-located and stand-alone dialysis clinics. It does not operate mobile units. Prior to 2024, third-party providers (including Life Renal Care) were permitted to administer dialysis at Mediclinic hospitals. Mediclinic subsequently gave notice that it would no longer permit Life Renal Care to provide these services at its facilities.

Interim relief application

Life submitted that Mediclinic commenced giving notice in January 2024 that it would no longer permit Life Renal Care to provide dialysis services at five Mediclinic hospitals (Vergelegen, Morningside, Panorama, Potchefstroom and Newcastle). It argued that Mediclinic’s conduct constitutes exclusionary acts in contravention of the Competition Act (“Act”) including:

  • engaging in an exclusionary act where the anti-competitive effect is not outweighed by any alleged efficiency benefits in contravention of section 8(1)(c) of the Act;
  • preventing dialysis patients (customers) as well as their referring nephrologists or specialist physicians (suppliers) from dealing with a competitor of Mediclinic Renal, being Life Renal, in contravention of section 8(1)(d)(i); and/or
  • requiring that dialysis patients admitted to a Mediclinic hospital in terms of a contract, pursuant to which the patient is provided with hospital services, are also required, should they need dialysis, to obtain dialysis services from Mediclinic Renal in contravention of section 8(1)(d)(iii).

Pending the outcome of its complaint to the Commission, Life sought an interim order directing Mediclinic, among others, to: restore Life Renal’s access and on-site storage to Mediclinic hospitals; permit it to treat patients subject to reasonable protocols; and refrain from interfering with its services.

Mediclinic said it had legitimately decided to insource its renal dialysis services previously provided by Life Renal Care particularly because it has no oversight or authority over the practices, hygiene, infection control, security and other reasonable protocols of third party service providers.

Tribunal’s findings

Given the nature of the alleged contravention, the Tribunal’s key consideration was whether or not Mediclinic is dominant in the relevant market(s). The Tribunal found that the market for the provision of acute multidisciplinary inpatient private hospital services in South Africa appears prima facie to be the plausible relevant market. On the evidence before it, the Tribunal found that Life had not made out a prima facie case that Mediclinic is dominant.

The underlying complaint will continue through the Commission’s investigation process.

The Tribunal’s order and reasons will be published on www.comptrib.co.za once confidentiality claims by the parties have been finalised.