The incidence of health financing in South Africa: findings from a recent data set

Abstract

There is an international call for countries to ensure universal health coverage. This call has been embraced in South Africa (SA) in the form of a National Health Insurance (NHI). This is expected to be financed through general tax revenue with the possibility of additional earmarked taxes including a surcharge on personal income and/or a payroll tax for employers. Currently, health services are financed in SA through allocations from general tax revenue, direct out-of-pocket payments, and contributions to medical scheme. This paper uses the most recent data set to assess the progressivity of each health financing mechanism and overall financing system in SA. Applying standard and innovative methodologies for assessing progressivity, the study finds that general taxes and medical scheme contributions remain progressive, and direct out-of-pocket payments and indirect taxes are regressive. However, private health insurance contributions, across only the insured, are regressive. The policy implications of these findings are discussed in the context of the NHI.

How to do (or not to do) … a health financing incidence analysis

“…South Africa, a sub-Saharan African country with reliable data sources, finances health services via three broad mechanisms—general taxes (∼38% of total health finances), private health insurance (∼50%) and OOP payments (∼12%) ( Ataguba and McIntyre 2018 ).…”

“…The nationally representative Income and Expenditure Survey dataset for 2011/12 was used to extract household contributions to taxes, OOP payments and private health insurance ( Ataguba and McIntyre 2018 ). Because not all tax revenue is allocated to the health sector, only about 11% of total tax extracted was considered for analysis (see Table 2 ).…”

“…In terms of the final burden of each financing mechanism, direct taxes are borne by the legal tax payer, indirect taxes by consumers, private health insurance by the insured household or individual and OOP payments by the users of health services. Due to space limitation, we refer the reader to Ataguba and McIntyre (2018) for details on how contributions for each health financing mechanism were extracted for each household.…”

“… Source: Ataguba and McIntyre (2018) , page 79, reproduced with permission. Note: Standard errors in parenthesis.…”

Prioritizing the perceived equity of the residents to construct an equitable health care system: evidence from a national cross-sectional study in China

“…Building an equitable health care system involves both the promotion of social justice in health (i.e., no one is denied or discriminated to live a healthy life due to economically and socially deprived) [6] and people's subjective perception of the promotion. However, for one thing, health care systems in many countries have been unable to introduce or sustain improvements in the equity of health outcomes [7], health service use [8], health financing [9,10], health resource allocation [11], and so on. For another, researches and interventions that focus only on the technical, clinical, or financial dimensions of health interventions and systems generally lose sight of people's subjective perception of the equity of the health care system in their country.…”