National Health Insurance
Private Spend and Public Spend
The picture that is frequently usedto depict the inequity in public and private spend is one derived from work by Prof Di McIntyre of the Health Economics Unit at UCT. The average spend for various groups in 2005 was given as follows:
- R9,500 pbpa for those belonging to medical schemes, which was 7.0 million in 2005 when the initial work was done but 7.9 million by end 20088;
- R1,500 pbpa for the roughly 10 million people who use private primary care (on an out-of-pocket basis) and public hospitals; and
- R1,300 pbpa for the roughly 30 million people using public clinics and public hospitals.
Prof McIntyre issued a revised version of this with 2008 figures in a recent information sheet:
- R11,300 pbpa for those belonging to medical schemes (this includes both medical scheme spending of R9,600 and estimated out-of-pocket payments of R1,700);
- R2,500 pbpa for the middle group (includes out-of-pocket payments to private primary care providers and government spending on hospital care); and
- R1,900 pbpa for those using government primary care and hospital services
The impression is sometimes created by other commentators that all this spend is able to be pooled and then spent equally under NHI. This is much the same argument in transport as taking public expenditure on public transport, adding all the spend on private motor cars (of whatever luxury level) and private fuel usage, and then saying that all of this money should be available for an improved public transport system. A clearer distinction needs to be made between public money and private spend.
A distinction is also needed between spend on essential healthcare and true private purchases. For example, it is not fair to compare private over-the-counter out-of-pocket vitamin purchases to Government spend on anti-retroviral medication. When a healthcare purchase is fully private it competes with movie tickets and entertainment, not social expenditures. Another example is the spend on African Tradition Healers. Research has shown that “The trade in traditional medicines in South Africa is estimated to be worth R2.9 billion per year, representing 5.6% of the National Health budget. With 27 million consumers, the trade is vibrant and widespread.” This private expenditure does not appear to have been included in the figures above.
pbpa means per beneficiary per annum, in other words per person per year, including adults and children.
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