An evaluation of expenditure in the private health care sector and its reporting in the national accounts of South Africa

There is currently much work underway internationally to improve the accuracy and to refine the detail of accounting for health care expenditures. This research was initiated by the increasing activity in the field of national health accounting, as well as by previous research indicating that the Reserve Bank might be underestimating private health care expenditure in the national accounts. The Reserve Bank estimate of health care expenditure is important as it is the only complete and regularly produced estimate of private sector health care expenditure for South Africa. It was posited that an independent estimation of private health care expenditure would show that its magnitude is underestimated in the expenditure estimates published by the Reserve Bank for the national accounts. This thesis was upheld by the results of the research. The thesis estimate of private health care expenditure was R15 billion, 39% higher than the Reserve Bank estimate available at the time. It was also 21% higher than the final Reserve Bank estimate published in December 1995. The methodology used to derive the thesis estimate involved a survey of national income accounting concepts and guidelines embodied in the internationally used publication, the 1993 System of National Accounts. Primary data was collected from a wide range of institutions in the South African health sector. Secondary data sources were also consulted in several instances. In particular, the Registrar of Medical Schemes was consulted for medical scheme expenditure estimates as they constitute the largest portion of private sector health care expenditure in South Africa. The thesis estimate was then calculated for a single year according to the 1993 System of National Accounts guidelines. The year chosen was the government financial year from April 1992 to March 1993. The year was chosen to coincide with the year chosen for a national health expenditure review. In the presentation of the results, the estimate was broken down in separate "sources" and "uses" matrices, which are being used internationally to present national health accounting information. From the comparison of the Reserve Bank and thesis expenditure estimates, one of the most important recommendations that emerged was that the Reserve Bank should consult a wider range of expenditure data sources, more timeously and regularly. In particular, it was suggested that the Reserve Bank should negotiate earlier access to the data held by the Registrar of Medical Schemes, as well as cross-check household survey data with independent estimates of out-of-pocket and statutory scheme health care expenditure. In addition to providing a new benchmark estimate for private sector health care expenditure in the government financial year 1992/93, the breakdown of the estimate into matrices provides a framework that could be used as the basis for the development of more detailed satellite national health accounts, in accordance with 1993 SNA standards.

Grantor dc:publisher.institution

School of Economics

Year dc:date.issued

1997

Author dc:creator

• Valentine, Nicole Britt

Advisor dc:contributor.advisor

• McIntyre, Di

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/11427/17539

OAI identifier oai:identifier

oai:open.uct.ac.za:11427/17539