Medical Savings Accounts in South Africa

Policy Reports | Health | International

No. 234
Thursday, June 01, 2000
by Shaun Matisonn

The South Africa Health Care System: The Public Sector

Table I - Trends in Real Per Capita Health Care Spending (RANDS)

South Africa has an extensive public sector health care system that provides services to approximately 36.5 million people, 80 percent of the population. For participants in this system, health care is virtually free at the point of consumption. Although there is a nominal $3 charge for a physician visit, this fee is almost always waived for those who cannot afford it - and almost everyone who currently uses the system is deemed unable to afford the charge. There is no charge for hospital care.

"About 80 percent of the population relies on free care from the public sector."

Like other health care systems around the world that offer free services, South Africa's public system is plagued by continuing problems of nonprice rationing.1 And like other health care systems in which the pressures of democracy affect the allocation of resources, South Africa's public system has been increasingly sacrificing expensive, curative services for the few who need them in order to expand less expensive, primary care services for the vast majority of people.2

Substituting Care for Cure. In the past, the public system led the world in developing heart transplant techniques. It also developed other cutting-edge medical technologies. At the same time, the provision of primary care services was sometimes sparse and meager, especially in rural areas. With the shift to a more democratic political system, the government has faced pressures to expand primary and secondary care even at the expense of curative services. Per capita health care costs are shown in Table I:

  • The table shows a drop (about 1/6 over 6 years) in real per capita spending in the provinces, reflecting an overall reduction in spending to reduce the budget deficit.
  • The spending reductions are not spread evenly, reflecting the fact that proportionately more resources are now going to rural areas.
  • The relative increase in spending in rural areas represents an increased emphasis on primary care.

The emphasis on universal primary care has been accompanied by a deterioration in the quality and quantity of high-tech medicine the public sector provides. An example is the imposition of moratoriums on certain organ transplants.

Table II - Percent of Pregnant Women With HIV

"The public health care system has deteriorated in recent years."

The Consequences of Nonprice Rationing. Wherever medical care is free at the point of consumption, the demand almost always exceeds the supply. The result is nonprice rationing. In South Africa, the rationing problems are even more acute in the hospital sector because resources are being shifted to primary care facilities.

"Overcrowding and staffing shortages are used as a form of nonprice rationing."

Recently a commission of enquiry was established to investigate continuing reports of poor quality health care delivered in the public sector. While the conclusions of the enquiry are not complete, some anecdotes from South African daily newspapers are similar to those from Britain or Canada. For example, according to one description:3

Patients were forced to sleep on the floor and on chairs at Johannesburg Hospital yesterday after staff were unable to accommodate a flood of new admissions. Dr Vivian Fritz, acting chairperson of the medical advisory committee at the hospital, said the medical intake ward had received 71 patients on Thursday. By lunchtime on Friday, staff were still struggling to find beds for 65 of these patients with only five nurses to care for them. They were expecting another 30 to 40 admissions by the evening. Fritz said the trauma unit would "try their best" to cope with any emergency cases, but there would be no specialist care available. The overcrowding came as the hospital announced that staff shortages had forced it to close its reconstructive, orthopaedic and pediatric surgery units this weekend. Twelve community service doctors were transferred from Johannesburg Hospital to Chris Hani Baragwanath Hospital where, Department of Health officials said, the crisis was more urgent.

These circumstances are not atypical or unique. The following are other examples:4

  • In July 1999 senior doctors from four of greater Johannesburg's major hospitals warned that a critical staff shortage could force the closure of several emergency units.
  • The South African Society of Physiotherapy president, Ms. Anna Bizos, said in June 1999 that Gauteng's principal orthopaedic hospital, the Oliver Tambo Hospital, had one physiotherapist and that many patients lay in bed for days with minimal rehabilitation.
  • In July 1999 the head of the trauma unit at Cape Town's Groote Schuur Hospital, Dr Peter Bautz, quit his job because of what he called the "intolerable work conditions in a medical service devastated by budget cuts and spiralling violence."
Table III - Percent of Pregnant Women with HIV

Note that these descriptions are not that different from news reports of similar problems in the public hospital sectors in Britain, Canada and other countries with national health insurance.5

"One in five pregnant women is HIV positive and the public system is overburdened with AIDS cases."

The Problem of AIDS. The problems of poor quality within the public sector are likely to become much worse as the AIDS epidemic worsens. The high volume of AIDS-related hospitalization is putting ever-greater pressure on public sector resources. The prevalence of HIV, as measured by the testing of women in prenatal clinics, is shown in Tables II and III.

  • As Table II shows, more than one out of every five pregnant women has tested positive for HIV, and that number is growing.
  • As Table III shows, the HIV infection rate is rising for every age level.

How will an already overburdened system deal with the pressures of more AIDS patients? The answer to this question is unclear.

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