National Health Act, 2003 (Act No. 61 of 2003)NoticesNational Health Insurance Policy towards Universal Health CoverageChapter 3 : Problem Statement3.3 Structual problems in the health system3.3.5 Health care financing challenges3.3.5.2 Inequitable Health Care Financing |
| 71. | The South African health system is two tiered and fragmented. Almost 50% of Total Health Expenditure (THE) is spent on 16% of the population covered by medical schemes whilst the other 50% is spent on 84 % of the population in the public sector40. The population that accesses services in the public sector is usually poor, rural and encumbered with a high burden of disease. Consequently, financial resource allocation and health care expenditure is not matching with the needs of the majority of the population. Funding for public health services in South Africa is currently at 4.1% of GDP, compared to 6% as the average for middle income countries. |
| 72. | Inequity in health care financing and fragmentation are worsened by the health financing system and the system of intergovernmental functions and fiscal relations. The South African health system is underpinned by a financing system that is based on the Intergovernmental Fiscal Relations (IGFR) system. The IGFR system is faced with an institutionalised and structural form of fiscal imbalance as a result of vertical fiscal federalism and other factors that impact on intergovernmental fiscal relations. The main problem that underpins IGFR challenges relates to striking a balance between the need to provide Constitutionally Mandated Basic Services (CMBS) within macroeconomic constraints that limit the available resources and a fiscal federal structure that has its own defined priorities41. Furthermore, combining distributive justice and the raising of adequate levels of revenues for redistributive purposes is a function of sustained investment, growth and development in the economy. |