Digital Healthcare Solutions (DHS) has to date consistently avoided conducting its dispute with the Competition Commission in the media. Recent reports and apparent misinformation of the media have left DHS with no choice but to set the record straight.
Media reports have incorrectly stated that the DHS subsidiary, Digital Healthcare Switch (DHSwitch), has been found in breach of its merger conditions as laid down by the Competition Commission in April 2001, specifically because it has not concluded an agreement with a competitor, Healthbridge.
These reports have suggested that the Competition Tribunal has ordered an investigation into the unbundling of DHSwitch. This is factually incorrect. The matter before the Tribunal is one in which DHSwitch has applied for a declaration that it has been in substantial compliance with its merger conditions, and accordingly that the Competition Commission`s CC19 notice of apparent breach be set aside.
No verdict of breach has been passed by the Competition authorities and DHSwitch is confident that the Tribunal hearing of 21 November will find in its favour.
As a preliminary matter, DHSwitch has challenged the Competition Commission` s CC19 notice of apparent breach (of April 2002) on grounds that it believed the notice to have been technically deficient. The Tribunal`s dismissal on 22 October of this technical challenge has no bearing on the merits of the case, nor does it in any way weaken or impede DHSwitch`s argument before the Tribunal on 21 November.
DHS believes that it went beyond the requirements of the DHSwitch merger conditions and explored every avenue in attempting to conclude an agreement with Healthbridge. During the period in question, DHS successfully concluded a similar agreement, in keeping with the merger conditions stipulated by the Competition Commission, with another competitor (Medikredit). DHS furthermore believes that the terms and conditions proposed to Healthbridge were fair and equitable to all parties.
In DHS`s view, the reasons why negotiations with Healthbridge were unsuccessful have since become apparent:
* Healthbridge has, through unauthorised and surreptitious means, gained access to the DHS software products, said products which have now become the issue before the Tribunal. DHS considers this action to be a violation of its own copyright in this software and served Healthbridge with a summons on Thursday, 16 October 2003 in this regard. The rapid growth of its business reported by Healthbridge over the last two years supports the fact that Healthbridge never required the software access that DHS was obliged to provide, as it was in any event gaining such access without DHS`s authority.
* As a result, DHS believes that Healthbridge has constantly frustrated the negotiations for its own benefit.
* It is not commonly known that, following a complaint from DHS, the Competition Commission has recently instructed Healthbridge and its shareholders (Discovery Health and Medscheme) to remove an anti-competitive exclusivity clause from their shareholders` agreement. This clause had the effect of these funders unduly influencing healthcare practitioners to exclusively use Healthbridge for their real-time claims submissions. It is DHS`s considered view that this situation could potentially be detrimental to the overall costs of healthcare delivery.
* Despite the amendment of their exclusivity arrangement on the insistence of the Competition Commission, Healthbridge and its shareholders have not effectively removed the obstacles to DHS being able to deal with these funders.
DHS is confident that the Competition authorities will recognise the merits of the DHS argument when the matter is heard before the Tribunal on 21 November, the positive outcome of which will be good news for achieving improved efficiencies and reducing the costs of healthcare in SA.
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