A health expenditure review of the South African private health care sector from 2003 to 2006.
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Introduction South Africa has a two tiered health care system: a private sector catering for seven of the 47 million people and public sector providing care to the majority. The private sector consists of for-profit providers that are funded either through medical schemes, health insurance policies or out of pocket expenditure. To attain the goal of the health care system of improving health, it is essential that healthcare financing is understood. The provision of quality, accurate and comprehensive financial data is necessary for the efficient mobilization and allocation of financial resources. Health Expenditure Reviews and National Health Accounts provide such invaluable information. Aim To provide a trend analysis of health financing and expenditure data for the private health care sector in South Africa from 01 January 2003 to 31 December 2006. Methods This study is employs an observational, descriptive cross-sectional design. The methodology used in the study is adapted from the World Health Organization’s guide to producing National Health Accounts. Data was obtained from the Council for Medical Schemes annual reports and from Statistics South Africa Income and Expenditure Survey. The annual average medical inflation for each of the years was removed from the nominal value so that a real trend analysis could be observed. Results For the four year period, the overall cost-drivers of consolidated schemes were private hospitals (31.0-35.0%), medical specialists (20.0-21.0%), medicines dispensed out of hospital (17.0-22.0%) and non-healthcare expenditure like administration and broker fees (14.0-15.0%). From the households’ consumable expenditure on health, 37.0% was spent on medical services, 35.0% on pharmaceutical products and 11.0% on hospital services. Discussion The majority of expenditure in the private sector is through medical schemes. The precise amount spent by households is unknown due to the lack of data but it is a large amount for the South African household. Proper National Health Account Matrices could not be constructed since access to data was limited, not routinely available and not disaggregated at the required level. Recommendations Better quality information on out-of-pocket household expenditure and expenditure in the traditional sector is needed. To improve access to the private sector, the proposed policy and legislative changes need to be implemented.