Title: Healthcare inflation and expenditures in South Africa: Some implications for economic policy

Abstract

Healthcare systems around the world are facing great challenges. This has included rising healthcare prices and its impact on healthcare expenditures and the concomitant effects on access to healthcare, particularly in emerging and developing countries. This study focuses on health care price developments and health expenditures in South Africa. The study identifies four major results. Firstly, South Africa’s healthcare expenditures compare quite favorably with countries at similar levels of development. However, the efficiency of these expenditures lag those in comparable countries. Secondly, it was found that South Africa’s healthcare price rises have exceeded those in advanced countries even though healthcare demand and expenditures in these countries are much higher than is the case in South Africa. Thirdly, healthcare rises exceed those in other sectors of the South African economy. Finally, healthcare price changes adversely impact healthcare expenditures in South Africa. The policy implications of these findings are explored in the paper. The results indicate that price considerations are critical to improving healthcare access in South Africa. The paper also highlights some non-price determinants of healthcare access that warrant attention by policymakers in South Africa.