Healthcare in South Africa

Creating the Right Incentives

Healthcare & Life Sciences

December 1, 2016

Healthcare in South Africa

As the South African Government presses ahead with plans to introduce a National Health Insurance scheme, careful thought must be given to how healthcare providers will be reimbursed and the incentives created by different payment mechanisms, in order to ensure quality of care for patients and value for money.

South Africa faces a dual healthcare challenge, as it struggles with both the rising costs and chronic disease burden of a developed economy, as well as the public healthcare access and quality issues of a developing country.

In this article, Victoria Barr, Senior Director at FTI Consulting, considers the challenges of managing cost in the healthcare sector and how different payment mechanisms can impact on incentives to improve quality and reduce costs.

How Should the Money Flow?

The government’s proposed response to the country’s healthcare challenges was summarised in the White Paper on National Health Insurance (NHI), published in December last year. Much of the discussion following the publication of the White Paper focused on how the scheme will be funded. While this is a supremely important question from a fiscal perspective, where the money will come from is only part of the problem and is in some ways a more straightforward question than how the money should be spent.


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