Private hospitals are essential to the sustainability of health care in South Africa, Health director-general Thami Mseleku told delegates to the annual Hospital Association of SA Conference in Somerset West Thursday.

"Our private sector, we know, provides world class healthcare services and this makes it all the more crucial to our national effort to promote quality healthcare for all," he said.

"To this end we are committed to engagement to plot the future and create a sustainable system.

"I know there are certain political groupings in our land who believe that there is no place for private healthcare - some say health shouldn't be private."

Despite what some may think and say, government did not believe that.

"As I have stressed, we see the private sector as being crucial, but not necessarily to the extent that its activities be determined by market forces alone.

"That is why there has to be regulation to maintain sustainability and affordability."

Government's intended intervention in price negotiations had been perceived by many stakeholders as a move to introduce price fixing.

"The Draft Amendment is not intended to introduce price fixing, but a fair process for parties to negotiate both individually and collectively."

Mseleku told delegates that while he understood why there was such a general reaction to the Amendment, there was a clear conflict of interest reflected in the individual submissions on the Act presented to the department from the various sector stakeholders.