Private sector involvement in funding and providing health services in South Africa: implications for equity and access to health care

This paper explores private sector involvement in funding and providing health services in South Africa and the implications for equity and access to health care. The paper notes that 44% of total health care expenditure is attributable to private health insurance and is almost exclusively spent on private for-profit providers, such as hospitals, specialists, medicines and retail pharmacies.

The author notes that serious challenges face the private health care sector in South Africa, not least of all the very rapid increases in expenditure and, hence, contribution rates in medical schemes. In this respect, the paper points out that these factors driving the rapid increases have not been addressed effectively either through government regulation or through action by the private health sector itself.

Moreover, the document demonstrates the following findings:

• these challenges facing the sector impact on the overall health system, both in terms of its affordability and sustainability
• the fundamental principle of cross subsidies, from rich to poor and from the healthy to the ill, is not being honoured
• medical schemes are, therefore, not providing adequate financial protection for their members
• substantial reform of the health system is needed, yet it is critical that careful planning is undertaken, that there is extensive engagement with all stakeholders and that implementation occurs over a reasonable timeframe

The paper also figures that the proposed “National Health Insurance” (NHI) aims to achieve universal financial risk protection and access to health care still have many unclear details, particularly in terms of the provision of health services.