Hostname: page-component-586b7cd67f-t7czq Total loading time: 0 Render date: 2024-11-24T13:49:37.477Z Has data issue: false hasContentIssue false
  • English
  • Français

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

Published online by Cambridge University Press:  19 July 2017

John E. Ataguba  and
Di McIntyre
John E. Ataguba*
Affiliation:
Health Economics Unit, School of Public Health & Family Medicine, University of Cape Town, Cape Town, South Africa
Di McIntyre
Affiliation:
Health Economics Unit, School of Public Health & Family Medicine, University of Cape Town, Cape Town, South Africa
*
*Correspondence to: John E. Ataguba, Health Economics Unit, School of Public Health & Family Medicine, University of Cape Town, 7925, Observatory, Cape Town, South Africa. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

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.

Type
Articles
Information
Health Economics, Policy and Law , Volume 13 , Issue 1 , January 2018 , pp. 68 - 91
Check for updates
Copyright
© Cambridge University Press 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

African Union Heads of State (2001), ‘Abuja declaration on HIV/AIDS, tuberculosis and other infectious diseases and plan of action’. Addis Ababa: Organization of African Unity. Retrieved from http://www.un.org/ga/aids/pdf/abuja_declaration.pdf [10 December 2015].Google Scholar
Akazili, J., Garshong, B., Aikins, M., Gyapong, J. and McIntyre, D. (2012), ‘Progressivity of health care financing and incidence of service benefits in Ghana’, Health Policy and Planning, 27: i13–i22.Google Scholar
Akazili, J., Gyapong, J. and McIntyre, D. (2011), ‘Who pays for health care in Ghana?’, International Journal for Equity in Health, 10: 1–13.Google Scholar
Amm, S. J. (2001), ‘The Incidence of Corporate Taxation – A Suggested Framework for Measuring the Incidence of South African Corporate Taxation’, An M.Com dissertation submitted to the Department of Economics, University of Witswatersrand, Johennesburg.Google Scholar
Araar, A. and Duclos, J.-Y. (2009), User Manual for Stata Package DASP: Version 2.1, Laval: PEP, World Bank, UNDP and Université Laval.Google Scholar
Ataguba, J. E. (2012), ‘Reassessing catastrophic health care payments with a Nigerian case study’, Health Economics, Policy and Law, 7: 309–326.Google Scholar
Ataguba, J. E. and Goudge, J. (2012), ‘The impact of health insurance on health-care utilisation and out-of-pocket payments in South Africa’, The Geneva Papers on Risk and Insurance-Issues and Practice, 37: 633–654.Google Scholar
Ataguba, J. E. and McIntyre, D. (2012), ‘Paying for and receiving benefits from health services in South Africa: is the health system equitable?’, Health Policy and Planning, 27: i35–i45.Google Scholar
Ataguba, J. E. and McIntyre, D. (2013), ‘Who benefits from health services in South Africa?’, Health Economics, Policy and Law, 8: 21–46.Google Scholar
Ataguba, J. E., Akazili, J. and McIntyre, D. (2011), ‘Socioeconomic-related health inequality in South Africa: evidence from General Household Surveys’, International Journal for Equity in Health, 10: 48.Google Scholar
Ataguba, J. E.-O., Day, C. and McIntyre, D. (2015), ‘Explaining the role of the social determinants of health on health inequality in South Africa’, Global Health Action, 8: 28865.Google Scholar
Auerbach, A. J. (2006), ‘Who Bears the Corporate Tax? A Review of What We Know’, in J. M. Poterba (ed.), Tax Policy and the Economy Volume 20 Cambridge, MA: MIT Press, pp. 1–40.Google Scholar
Banks, J. and Johnson, P. (1994), ‘Equivalence scale relativities revisited’, The Economic Journal, 104: 883–890.Google Scholar
Blackman, A., Osakwe, R. and Alpizar, F. (2010), ‘Fuel tax incidence in developing countries: the case of Costa Rica’, Energy Policy, 38: 2208–2215.Google Scholar
Borghi, J., Ataguba, J., Mtei, G., Akazili, J., Meheus, F., Rehnberg, C. and McIntyre, D. (2009), ‘Methodological Challenges in Evaluating Health Care Financing Equity in Data-Poor Contexts: Lessons from Ghana, South Africa and Tanzania’, in D. Chernichovsky and K. Hanson (eds), Innovations in Health System Finance in Developing and Transitional Economies Advances in Health Economics and Health Services Research, Volume 21 Bingley, UK: Emerald Group Publishing, pp. 133–156.Google Scholar
Carrin, G., Evans, D. and Xu, K. (2007), ‘Designing health financing policy towards universal coverage’, Bulletin of the World Health Organization, 85: 652–652.Google Scholar
Council for Medical Schemes (2010), Council for Medical Schemes Annual Report 2009–2010, Pretoria: Council for Medical Schemes.Google Scholar
Dardanoni, V. and Forcina, A. (1999), ‘Inference for Lorenz curve orderings’, The Econometrics Journal, 2: 49–75.CrossRefGoogle Scholar
Deaton, A. (1997), The Analysis of Household Surveys, Baltimore, MD: The Johns Hopkins University Press.Google Scholar
Deaton, A. and Zaidi, S. (2002), ‘Guidelines for Constructing Consumption Aggregates for Welfare Analysis’. LSMS Working Paper No. 135. Washington, DC: World Bank Publications.Google Scholar
Department of Health (2011), ‘National Health Act (61/2003): Policy on National Health Insurance’. Government Gazette 34523. National Department of Health, Republic of South Africa, Pretoria.Google Scholar
Gilson, L. and McIntyre, D. (2007), ‘Post-apartheid challenges: household access and use of health care in South Africa’, International Journal of Health Services, 37: 673–691.Google Scholar
Go, D. S., Kearney, M., Robinson, S. and Thierfelder, K. (2005), ‘An Analysis of South Africa’s Value Added Tax’. World Bank Policy Research Working Paper 3671. Washington, DC: World Bank.Google Scholar
Kakwani, N. C. (1977), ‘Measurement of tax progressivity: an international comparison’, The Economic Journal, 87: 71–80.Google Scholar
Kotlikoff, L. and Summers, L. (1987), ‘Tax Incidence’, in A. J. Auerbach and M. Feldstein (eds), Handbook of Public Economics, North-Holland: Elsevier Science Publishers, pp. 1043–1092.Google Scholar
Kutzin, J. (2013), ‘Health financing for universal coverage and health system performance: concepts and implications for policy’, Bulletin of the World Health Organization, 91: 602–611.Google Scholar
Lambert, P. J. (2001), The Distribution and Redistribution of Income, Manchester: Manchester University Press.Google Scholar
Martinez-Vazquez, J. (2001), ‘The Impact of Budgets on the Poor: Tax and Benefit Incidence’. International Studies Program, Georgia State University, Working Paper 01-10. Georgia: Georgia State University.Google Scholar
McGrath, M. D. (1979), ‘The Racial Distribution of Taxes and State Expenditures’, Mimeo. Department of Economics, University of Natal, Durban.Google Scholar
McGrath, M., Janisch, C. and Horner, C. (n.d.), ‘The Impact of the Fiscal System on Income Distribution and Poverty in the South African Economy’, Mimeo. Department of Economics, University of Natal, Pietermaritzburg.Google Scholar
McIntyre, D. (2012), ‘What healthcare financing changes are needed to reach universal coverage in South Africa?’, South African Medical Journal, 102: 489–490.Google Scholar
McIntyre, D. and Kutzin, J. (2012), ‘Revenue Collection and Pooling Arrangements in Health System Financing’, in R. Smith, K. Hanson and N. Palmer (eds), Health Systems: A Political-Economy Perspective, Oxford: Oxford University Press, pp. 77–101.Google Scholar
McIntyre, D. and McLeod, H. (in press), ‘Private Health Insurance in South Africa’, in S. Thomson, E. Mossialos and R. Evans (eds), Private Health Insurance and Medical Savings Accounts: Lessons from International Experience, Cambridge: Cambridge University Press.Google Scholar
McIntyre, D., Doherty, J. E. and Ataguba, J. E. (2012), ‘Health Care Financing and Expenditure: Post-1994 Progress and Remaining Challenges’, in H. C. J. Van Rensburg (ed.), Health and Health Care in South Africa, Pretoria: Van Schaik, pp. 433–482.Google Scholar
McIntyre, D., Goudge, J., Harris, B., Nxumalo, N. and Nkosi, M. (2009), ‘Prerequisites for National Health Insurance in South Africa: results of a national household survey’, South African Medical Journal, 99: 725–729.Google Scholar
McIntyre, D., Thiede, M., Nkosi, M., Mutyambizi, V., Castillo-Riquelme, M., Gilson, L., Erasmus, E. and Goudge, J. (2007), A Critical Analysis of the Current South African Health System, Cape Town: Health Economics Unit, University of Cape Town and Centre for Health Policy, University of the Witwatersrand.Google Scholar
Mills, A., Ataguba, J. E., Akazili, J., Borghi, J., Garshong, B., Makawia, S., Mtei, G., Harris, B., Macha, J. and Meheus, F. (2012), ‘Equity in financing and use of health care in Ghana, South Africa, and Tanzania: implications for paths to universal coverage’, The Lancet, 380: 126–133.Google Scholar
Mtei, G., Makawia, S., Ally, M., Kuwawenaruwa, A., Meheus, F. and Borghi, J. (2012), ‘Who pays and who benefits from health care? An assessment of equity in health care financing and benefit distribution in Tanzania’, Health Policy and Planning, 27: i23–i34.Google Scholar
Munge, K. and Briggs, A. H. (2014), ‘The progressivity of health-care financing in Kenya’, Health Policy and Planning, 29: 912–920.Google Scholar
Musgrave, R. A. (1985), ‘A Brief History of Fiscal Doctrine’, in A. J. Auerbach and M. Feldstein (eds), Handbook of Public Economics, North-Holland: Elsevier Science Publishers, pp. 1–59.Google Scholar
Musgrave, R. A., Carroll, J. J., Cook, L. D. and Frane, L. (1951), ‘Distribution of tax payments by income groups: a case study for 1948’, National Tax Journal, 4: 1–53.Google Scholar
National Department of Health (2015), National Health Insurance for South Africa: Towards Universal Health Coverage, Pretoria: National Department of Health.Google Scholar
National Treasury (2011), 2011 Budget Review, Pretoria: National Treasury.Google Scholar
O’Donnell, O., van Doorslaer, E., Rannan-Eliya, R. P., Somanathan, A., Adhikari, S. R., Akkazieva, B., Harbianto, D., Garg, C. C., Hanvoravongchai, P., Herrin, A. N., Huq, M., Ibragimova, S., Karan, A., Kwon, S., Leung, G., Lu, J., Ohkusa, Y., Pande, B., Racelis, R., Tin, K., Tisayaticom, K., Trisnantoro, L., Wan, Q., Yang, B. and Zhao, Y. (2008a), ‘Who pays for health care in Asia?’, Journal of Health Economics, 27: 460–475.Google Scholar
O’Donnell, O., Van Doorslaer, E., Wagstaff, A. and Lindelow, M. (2008b), Analyzing Health Equity Using Household Survey Data: A Guide to Techniques and Their Implementation, Washington, DC: World Bank.Google Scholar
Republic of South Africa (2004), ‘National Health Act No. 61 of 2003’. Pretoria: The Presidency.Google Scholar
Sahn, D. E., Younger, S. D. and Simler, K. R. (2000), ‘Dominance testing of transfers in Romania’, Review of Income and Wealth, 46: 309–327.Google Scholar
Shah, A. and Whalley, J. (1991), ‘Tax incidence analysis of developing countries: an alternative view’, The World Bank Economic Review, 5: 535–552.Google Scholar
Simkins, C., Woolard, I. and Thompson, K. (2000), An Analysis of the Burden of Taxes in the South African Economy for the Years Between 1995/96 and 1999/2000, Pretoria: South African Department of Finance.Google Scholar
Spaull, N. (2013), ‘Poverty & privilege: primary school inequality in South Africa’, International Journal of Educational Development, 33: 436–447.Google Scholar
StataCorp (2013), Stata: Release 13 – Statistical Software, College Station, TX: StataCorp LP.Google Scholar
Statistics South Africa (2008a), ‘Explanatory Note on the 2006 Consumer Price Index Weights’, Statistics South Africa, Pretoria.Google Scholar
Statistics South Africa (2008b), ‘Income and Expenditure of Households 2005/2006: Analysis of Results’, Statistics South Africa, Pretoria.Google Scholar
Statistics South Africa (2008c), ‘Income and Expenditure of Households 2005/2006: Analysis of Results’, Statistics South Africa, Pretoria.Google Scholar
Statistics South Africa (2012), ‘Income and Expenditure of Households 2010/2011: Statistical Release P0100’, Statistics South Africa, Pretoria.Google Scholar
van Doorslaer, E. and Wagstaff, A. (1993), ‘Equity in the Finance of Health Care: Methods and Findings’, in E. van Doorslaer, A. Wagstaff and F. Rutten (eds), Equity in the Finance and Delivery of Health Care: An International Perspective, Oxford: Oxford University Press, pp. 20–48.Google Scholar
van Doorslaer, E., Wagstaff, A. and Rutten, F. (eds), (1993), Equity in the Finance and Delivery of Health Care: An International Perspective, Oxford: Oxford University Press.Google Scholar
Wagstaff, A. and van Doorslaer, E. (1992), ‘Equity in the finance of health care: some international comparisons’, Journal of Health Economics, 11: 361–387.Google Scholar
Wagstaff, A. and Van Doorslaer, E. (1993), ‘Equity in the Finance and Delivery of Health Care: Concepts and Definitions’, in E. Van Doorslaer, A. Wagstaff and F. Rutten (eds), Equity in the Finance and Delivery of Health Care: An International Perspective, Oxford: Oxford University Press, pp. 7–19.Google Scholar
Wagstaff, A. and van Doorslaer, E. (1997), ‘Progressivity, horizontal equity and reranking in health care finance: a decomposition analysis for the Netherlands’, Journal of Health Economics, 16: 499–516.Google Scholar
Wagstaff, A. and van Doorslaer, E. (2003), ‘Catastrophe and impoverishment in paying for health care: with applications to Vietnam 1993-98’, Health Economics, 12: 921–933.Google Scholar
Wagstaff, A., van Doorslaer, E., van der Burg, H., Calonge, S., Christiansen, T., Citoni, G., Gerdtham, U. G., Gerfin, M., Gross, L., Häkinnen, U., Johnson, P., John, J., Klavus, J., Lachaud, C., Lauritsen, J., Leu, R., Nolan, B., Perán, E., Pereira, J., Propper, C., Puffer, F., Rochaix, L., Rodríguez, M., Schellhorn, M., Sundberg, G. and Winkelhake, O. (1999), ‘Equity in the finance of health care: some further international comparisons’, Journal of Health Economics, 18: 263–290.Google Scholar
World Bank (2014), 2014 World Development Indicators, Washington, DC: The World Bank.Google Scholar
World Health Organization (2010), The World Health Report 2010 – Health Systems Financing: The Path to Universal Coverage, Geneva: World Health Organization.Google Scholar
World Health Organization (2013), The World Health Report 2013: Research for Universal Coverage, Geneva: World Health Organization.Google Scholar