South Africa has an annual healthcare bill of approximately R85 billion (currently US$ 12.14 billion approximately).
Private Health Services consume 58% of total health expenditure and capture a higher proportion of all types of personnel, except nurses, than the public sector.

Approximately 6.9 million people or 16% of the population are covered by healthcare schemes.
Government health expenditure was R42 billion (US$ 6 billion approximately). It was anticipated that this figure would have increased to more than R50 billion by 2006.
South Africa’s health system consists of a large public sector and a smaller but fast-growing private sector. Health care varies from the most basic primary health care, offered free by the state, to highly specialised hi-tech health services available in the private sector.
The public sector is under-resourced and over-used, while the mushrooming private sector, run largely on commercial lines, caters to middle- and high-income earners who tend to be members of medical schemes (18% of the population), and to foreigners looking for top-quality surgical procedures at relatively affordable prices. The private sector also attracts most of the country’s health professionals.
Public versus private spend
Although the state contributes about 40% of all expenditure on health, the public health sector is under pressure to deliver services to about 80% of the population. Despite this, most resources are concentrated in the private health sector, which sees to the health needs of the remaining 20% of the population.
Drug expenditure per person varies widely between the sectors. In 2000 about R8.25-billion was spent on drugs in South Africa, with the state spending only 24% of this. Thus, R59.36 was spent on drugs per person in the state sector as opposed to R800.29 on drugs per person in the private sector. Of all the country’s pharmacists, 40% work in Gauteng in the private sector.
The number of private hospitals and clinics continues to grow. Four years ago there were 161 private hospitals, with 142 of these in urban areas. Now there are 200. The mining industry also provides its own hospitals, and has 60 hospitals and clinics around the country.
Most health professionals, except nurses, work in private hospitals. With the public sector’s shift in emphasis from acute to primary health care in recent years, private hospitals have begun to take over many tertiary and specialist health services.
Public health consumes around 11% of the government’s total budget, which is allocated and spent by the nine provinces. How these resources are allocated, and the standard of health care delivered, varies from province to province.
Transforming the health sector
After South Africa’s first democratic elections in 1994, the dismantling of the country’s race-based health system began.
Previously, hospitals were assigned to particular racial groups and most were concentrated in white areas. With 14 different health departments, the system was characterized by fragmentation and duplication. There was no real attempt to deliver primary health care to the majority of people, and the health sector was largely focused around hospitals. Those living in rural areas had to travel long distances for medical care.
A transformed health system
Over the past few years the health sector has undergone rapid change to make it more equitable and accessible to the needy.
A district-based health system is being developed to ensure local-level control of public health services, and to standardize and co-ordinate basic health services around the country to ensure that health care is affordable and accessible to everyone.
There are 42 health regions and 162 health districts in the country. A new administrative structure is being put in place which will see primary health care clinics fall under the auspices of district authorities while hospitals remain under the control of provincial authorities.
Public/private partnerships
To address some of the resource and personnel shortages facing the public sector, partnerships between the public and private sectors are being forged. Some private hospitals are now offering beds and providing medical care to public sector patients. They are also beginning to offer post-graduate teaching facilities to university medical faculties in an effort to stop the flow of doctors out of the country.
The South African medical device industry
Although the medical manufacturing industry in South Africa is relatively small, it is considered to be one of the most dynamic business sectors in the country. In 2000 the value of production of the medical device manufacturing industry amounted to US$ 53 million. There are approximately 700 Medical device companies in South Africa of which approximately 80% are South African owned.
In the past decade the export of Medical Devices from South Africa has increased by an average of 5% per annum, however the sector represents only 0.14% of total SA exports, and growth in imports still far exceeds that of exports. In 2001, the total value of MED exports was estimated to be US$ 26 million. Approximately 50% of export partners are developed countries such as the USA, United Kingdom and Europe, which account for approximately 70% of total export value. The value of SA Medical Device industry’s exports to developing countries, particularly other African countries, is increasing.
Greater access to primary health care
Since 1994, more than 700 clinics have been built or upgraded, 2 298 clinics upgraded and given new equipment, and 125 new mobile clinics introduced. There are now more than 3 500 clinics in the public sector. Free health care for children under six, and for pregnant or breastfeeding mothers, is also available at these clinics.
Doctor shortages
To combat the long-standing shortage of doctors in rural areas, 450 foreign doctors, mainly from Cuba, were employed. The government has also made it easier for other foreign doctors to register here. Newly graduating South African doctors and pharmacists now complete a year of compulsory community service in understaffed hospitals and clinics. The country continues to suffer from a tremendous “brain drain” of South African doctors who are highly sought after in countries like Britain and Canada because of the high standard of training and the cutting-edge medical experience they receive in South Africa.
In 2000, 29 788 doctors in both public and private sectors were registered with the Health Professions Council of South Africa, the health practitioner watchdog body. Doctors must comply with the Continuing Professional Development System, which compels them to attend regular workshops, seminars and refresher courses to retain their yearly registration.
New legislation
In recent years, legislation has been passed to:
Make drugs more affordable and promote the use of generic equivalents.
Regulate the medical schemes industry to prevent it from discriminating against “high risk” individuals like the aged and sick.
Limit smoking in public places and make the public aware of the health risks of tobacco by placing restrictions on tobacco advertisements.