Private hospital prices in South Africa are expensive for citizens, says OECD

Té / 17 February 2016

Price levels for private hospital services in South Africa are comparable to the levels observed across OECD countries. But they are higher than what could be expected given the country’s income, according to a new OECD working paper.

International comparison of South African private hospital price levels” shows that private hospital prices in South Africa are around the levels observed in countries with much higher GDP levels, such as France, Germany or the United Kingdom.

The study also finds that between 2011 and 2013 private hospital prices grew faster than the average prices of goods and services purchased by households. This means that private hospital services are becoming less affordable over time.

The findings raise questions about the affordability of private hospital services, even for individuals with higher levels of incomes. 

Policies and prices in the private health care sector are important in terms of their spillover effect to the overall health system, says the OECD. For example, higher wages in the private sector have an impact on the ability of the public sector to attract health workers. Therefore, prices set in the private sector affect whether the public sector can afford to contract services or attract health care practitioners.

The report also notes that in South Africa the private voluntary health insurance (VHI) covers only 17% of the population but represents 41.8% of total health expenditures, equivalent to 3.7% of GDP. This is more than any OECD country and represents more than 6 times the OECD average (6.3%).

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