Not 15% but at least 45% of SA patients receive private health care

What the SA public needs more than anything else is accurate figures on which to base their assessment of the proposal to introduce a National Health Insurance (NHI) system.

In a recent article, Dr Olive Shisana, Director of the Human Sciences Research Council and chair of the ANC NHI task team declared that, “inequalities are exacerbated by the fragmented health care system with the public health care system serving 85% of the population (42 million) and the private serving the remaining 15%”. Expanding on this statement she said, “medical schemes expend more than 45% of resources to cater for a stagnant 7.4 million people whilst the public sector expends 40% on the rest of the population, with the remaining 15% being spent (mainly on the private sector services) on an out-of-pocket basis”. If the chair of such an important committee uses figures that, while persistently quoted, are fallacious, there is reason for every South African to be concerned. Especially when those figures are being used to justify the imposition of NHI on the country’s citizens.

The fallacious mantra regarding the public/private split in health care provision has its origins in the fact that in 2001 approximately 16% of the population were members of private medical schemes. Since then, government policy documents have contained the sweeping assumption that anyone who is not a member of a medical scheme automatically can be claimed as a government patient. The many people who do not belong to medical schemes but who also do not rely on government-provided health care can attest to the fact that the 16/84 or any other similar assumption is incorrect.

The Draft Charter of the Health Sector of the Republic of South Africa, published in 2005, repeated the claim that a small minority of South Africans (between 15 and 20% of the population), have a high degree of access to health services and a large majority (between 75 and 80%), have either limited access or no access at all. The “high degree of access” refers to that proportion of the population who can afford private health care and the “large majority” to those who, if they need it, obtain health care in the government health sector.

Accurately determining the percentage of the population that is dependent on the government health sector is of vital importance to health policy. It is even more important to determine how many people actually use government health services, the frequency of that use, and the nature of the services they utilise. The possibility that some people may, or are entitled to, use a particular service does not mean that they will do so. Future policies based on incorrect figures for the respective quantities of services provided by the government and private health services, will have serious consequences for future health-care delivery. It is thus essential that an effort be made to obtain a better understanding of the existing situation.

In research I carried out in writing South Africa’s Health Care Under Threat I found that a cursory glance at the available hospital and hospital bed statistics appeared to support the government’s claim that the government sector supplies health-care services to all but a small proportion of the population. In 2004 there were 410 public hospitals with 105,665 beds (79.6%), and 204 private hospitals with 26,593 beds (20.4%). However, on closer examination, and bearing in mind that accurate numbers are not readily available, indications are that the private health sector provides medical services to nearly half of the SA population.

According to official figures, SA had a population of 44.8 million people in October 2001. Poverty estimates range from 40% to as high as 60% of the population. Based on a poverty datum line of R800 per month for a household, 52% of households lived in poverty in 1996. It would thus be safe to conclude that in 2001 at least half the population, or 22.4 million people, could not afford comprehensive formal health care.

Research showed that in 1999 about 20% of the population had private medical insurance cover, consisting of medical scheme membership, other forms of health insurance, and workplace health services provided by private firms. At that time it was estimated that potentially 30% of non-scheme members (nearly 25% of the total population) used private health services on a direct payment basis. The implication is that in 1999 nearly 45% of the population used private health care.

Furthermore, those who paid out of pocket used either private or government care, while some used both, as did members of medical schemes.

Figures published by Statistics SA reveal that annually between 1995 and 2005 at least one third of households consulted private health providers:

Place of consultation 1995 – 2005
Place of consultation 1995 1998 2002 2005
Government sector 67.8 % 69.4 % 57.8 % 59.9 %
Private sector 32.2 % 30.6 % 42.2 % 40.1 %

According to the National Health Accounts, in 1995 28.8% of the population who were not covered by medical aid, made use of private health services. Ten years later the General Household Survey 2005 found that just over 40% of all consultations took place in the private sector in that year and that 55.4% of the consultations in the private health sector were for patients not on medical aid. Clearly the private health sector was used by substantially more than the 16% of the population claimed by government.

Consider also the results of a study on the market potential for medical schemes, undertaken by a private medical insurer, which estimated that in 2001 16% of the population was covered by medical insurance, that a further 30% could afford medical insurance but were not insured, and that 54% were unable to afford medical insurance. Among this last group were some who purchased private health care on an irregular basis and would not automatically have become government health-service patients.

An assessment of the available information led to the conclusion that the government health sector spent taxpayers’ money on a potential 54% of the population (24 million people in 2001) and not 84% as claimed. The real usage of health services ranged between 16% and 46% of the population using private health care, and potentially between 54% and 84% using the government health sector.

Consider further that relatively few people actually need medical care in any given year, and those who get sick suffer from a wide range of illnesses requiring a range of treatments, which differ in cost of provision. According to the General Household Survey 2005, 10.3% of the SA population consulted a health worker (doctor, nurse or traditional healer) and 6.5% of the population received some form of medical treatment at hospitals and clinics in that year. By comparison, in 2006 in the United States hospital admissions amounted to 12.5%, or 37.2 million people out of a population of over 298 million.

Overall figures would not have changed much during the past few years. If anything, given the problems experienced by the public sector, even more people would have turned to the private sector, especially to advice from pharmacists and self-medication.

Because only a small proportion of a population requires medical treatment in any given year, and considering that many people rarely need medical treatment, claims that the public health system currently serves 85% of the population and the private sector 15%, misrepresents the actual situation. Clearly, more accurate figures are required on which to base a decision on the implementation of NHI.

Author: Johan Biermann is the author of South Africa’s Health Care Under Threat, published jointly by the Health Policy Unit of the Free Market Foundation and the International Policy Network (London). This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.

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