Academic journal article Journal of Finance, Accounting and Management

An Examination of Health Care Financing Models:: Lessons for South Africa

Academic journal article Journal of Finance, Accounting and Management

An Examination of Health Care Financing Models:: Lessons for South Africa

Article excerpt


The democratic South African government inherited a highly fragmented health system in 1994, with wide disparities in health spending and inequitable distribution of health care professionals (Pillay, 2001, p. 72). There were inequities with access and quality of care between and within provinces; between black and white population groups; between urban and rural areas; and between the public and private health sectors. Transformation efforts in the health sector spanning more than 15 years include numerous structural, legislative and policy changes (Gilson, 2009).

The level of access and functionality of health care provision constitutes an essential component of the minimum package required for the advancement and development of people (Southern African Regional Poverty Network, 2008). In South Africa, the government has expressed their intention to reform the public health care sector as a step towards achieving equality amongst people (Pillay, McCoy & Asia, 2001). Following the democratic elections in 1994, the ruling political party, the African National Congress (ANC) sought to redress the inequality suffered by the majority, regarding access to social services (Pillay, 2001, p. 74). The newly crafted constitution highlights a bill of rights as well as the reformation of the health sector. (Republic of South Africa 1996).

Primarily the intention of the ANC was to create a single central department of health and to establish a national health system similar to that of the United Kingdom (UK). The National Health System (NHS) formed in England in 1948 is a publicly funded health care system, which makes provision for medical care for its citizens (NHS, 2011). The NHS provides healthcare to anyone normally resident in England or any other part of the UK, with most services free at the point of use by the patient (Dreschler & Jutting, 2007, p. 529). In South Africa the political arrangements that ushered in the new constitution contained strong elements of federalism1. It was found that implementing a national health system similar to that of the UK under a federalist system, would adversely affect the efficiency and effectiveness of the intended South African national health system. (Pillay, 2001, p. 750).

The NHI system is intended to relieve the burden and improve the efficiency of the public health sector without compromising the operations of the private sector, particularly the institutions therein. In broad terms, the NHI promises a health care system in which everyone, regardless of income level, can access decent health services at a cost that is affordable to them and to the country as a whole. Given the anticipated implementation of the NHI system and the lack of research on the effects thereof, the relevance of this study is to contribute to the debate, by providing insights from other countries from which the South African government can appropriately implement as well as finance the new NHI system specific to South Africa's current socio-economic state. This research may also be of great significance as the findings will make a contribution to the existing literature, in addition, this study could provide additional information to policy makers to help formulate or improve health policy and health administration in the country.

The purpose of this research is to examine health care financing models in various countries in other parts of the world in order to draw lessons with which to inform the South African NHI policy debate.

The rest of this paper is organised as follows: Section 2 reviews the health care management in South Africa, section 3 describes the research design and methodology, section 4 is a review of national health systems, section 5 presents the results and section 6 concludes the paper.

Literature Review

Review of Health Care Management in South Africa

According to Ntsaluba and Pillay (1998, p. 38) The South African state prior to1994 was one based on the ideology of racial superiority of the whites who held political and economic power. …

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