02.01.02. The private health sector | South Africa

02.01.02. The private health sector | South Africa

13 Aug 2022

Access to private medical care is largely contingent on whether South Africans have access to medical insurance, for which only 17 of 100 persons (i.e., 12.7 million) are able to make use of these services (StatsSA, 2016, 2017a), providing services to only 16% of the population (Mahlathi & Dlamini, 2015). The sector consists of services provided by general practitioners, medical specialists, and private hospitals, and tend to be located in more urban areas (Mahlathi & Dlamini, 2015). This sector is largely under-regulated and has limited accountability at various levels (Competition Commission SA, 2018). In the absence of value-based purchasing, shortfalls include ineffective constraints on rising healthcare rates and insurance cover, while consumers are generally uninformed and disempowered (Competition Commission SA, 2018). The sector is furthermore characterised by a lack of integrated care models, with an enduring preference for solo practices and fee-for-services (FFS) billing that incentivises practitioners to provide more services than needed, especially in an unregulated pricing environment (Competition Commission SA, 2018).

Private healthcare in South Africa is extremely expensive and unaffordable for most of the population. Medical practitioners drive health care expenditures in the sector in two ways: (1) through their own activities (i.e., diagnosis and treatment); and (2) through referral for further investigation, treatment and hospitalisation (Competition Commission SA, 2018). The Competition Commission of South Africa found that despite rulings that doctors may not negotiate collectively, there are specialist groupings that operate collectively to resist joining service provider networks and introduce/adapt codes to inflate prices – without noticeable improvement in the quality of care offered. General practitioners form Independent Practice Associations (IPAs) that promote inclusion in preferred provider networks. These networks include quality assessments that are not publicly available, with no evidence of consequences for practitioners who do not meet standards (Competition Commission SA, 2018). Specialists join related (specialist) societies and associations, protecting their interests. Regulation within this sector is inadequate to inform and empower (and protect) the healthcare user.


Competition Commission SA. (2018). Health market injuiry. Available from:  http://www.compcom.co.za/wp-content/uploads/2018/07/Executive-Summary.pdf

Mahlathi, P., & Dlamini, J. (2015). MINIMUM DATA SETS FOR HUMAN RESOURCES FOR HEALTH AND THE SURGICAL WORKFORCE IN SOUTH AFRICA’S HEALTH SYSTEM: A rapid analysis of stock and migration. Available from: http://www.prographic.com/wp-content/uploads/2016/07/0316-south-africa-case-studies-web.pdf

StatsSA. (2016). General Household Survey. Available from:  https://www.statssa.gov.za/publications/P0318/P03182015.pdf

StatsSA. (2017a). Public healthcare: How much per person? Statistics South Africa: Statistical Release. http://www.statssa.gov.za/?p=10548