Health policy makers playing with statistics

By Staff Writer
Graham Anderson, Principal Officer of Profmed Medical Scheme has called on policy makers to be consistent in the way that spending on health, education and security in South Africa is presented.

He said that public funding for the health sector was equivalent to 4.2% of gross domestic product and 14% of the main National Treasury budget. *

"South African government healthcare expenditure, measured as a percentage of GDP is lower than other middle income countries. Latest comparative health spending statistics date from 2005, when South Africa's public sector financing of health, relative to GDP was 3.6%, did not compare well to Turkey's 5.4%, Argentina's 4.5% and Greece's 4.3%.

"However it has become the norm for policy makers to include private sector, after tax, health spending along with public health spend when comparing health spend in different countries.

Anderson said that this could be due to the fact that the World Health Organisation, a body that is in favour of universal health care, tracks public and private expenditure on health and measures total expenditure as a percentage of GDP. In South Africa, combined public and private spend on health care is estimated at 8.8% of GDP. The norm for European countries is between 8% and 10% of GDP, a very high percentage of which is public funding from the national fiscus.

In South Africa, estimates of private health spend include contributions to medical schemes, occasionally include out of pocket spending and generally omit corporate spending on employee health as it is difficult to calculate.

Anderson pointed out that healthcare spend was unusual in this respect; there were no equivalent figures for total spend on education or total spend on security.

"This could be due to the fact that it would be extremely difficult to measure all the money spent on private education, this figure is simply not available. As far as I am aware, no one has attempted to calculate all the money spent on private education. Likewise, when calculating the percentage of resources spent on policing, private security spend is not included.

"One of the consequences of this method of calculating health-spend, is that the National Health Insurance policy makers might make the error of assuming that private sector spend is simply transferable and available for the financing of NHI.

"It should also be remembered that private money spent on healthcare, like private money spent on education and security, is discretionary, voluntary expenditure, a contract between payers and providers where standards of service are carefully monitored by all parties," he said.

*According to figures from the Reserve Bank, in the fourth quarter of 2009, South Africa's GDP was R2,504.16 bn. Expenditure on health including the R3 billion rollout for ARVs announced in the February 2010 budget was R107.6 bn.

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