More funding has been directed to health care in the public sector, but real spending per person has not matched match spending levels of the mid to late 1990s as the uninsured population grew by almost seven million in the last 10 years.

Writing in the 2003/4 SA Health Review, Mark Blecher, Director of the Social Sector at National Treasury and Stephen Thomas of the Health Economics Unit at University of Cape Town, caution that real growth of R3-billion in personnel expenditure has masked a reduction of 19 000 filled posts.

This is largely due to a 28 percent increase in average wages. The average wage of a health sector employee was R98 153 in 2003.

The HIV/AIDS epidemic is estimated to be costing R6 billion per year but the health sector is not being adequately compensated for this.

Overall the Western Cape remains the best funded province and Limpopo the lowest funded per capita. Limpopo also has one of the largest number of uninsured (those not on medical aid) inhabitants while the Western Cape has one of the smallest.

The authors point out that the private sector has expanded rapidly while increases in the cost of medical care and treatment have been rampant.

As a result, medical scheme cover has become increasingly unaffordable to lower income earners and social health insurance more difficult to achieve.

Blecher and Thomas suggest that there is a need for measures to make medical scheme coverage more affordable and sustainable.

Recent legislative interventions such as the regulation of pricing of medicines and the introduction of the ‘€œcertificate of need’€ have the potential to impact significantly on escalating medical expenditure.

Writing on medical schemes, Stephen Harrison of the Medical Schemes Council, highlighted the importance of government adopting a strategy to address ‘€œperverse incentives’€ and distortions in drug pricing.

He added that the immediate focus of policy and regulations in the private sector must be on mechanisms to curb rampant cost inflation and to create conditions for the emergence of affordable medical scheme options for low-income employees.

‘€œUntil now, there has been effective regulation of the private health funding industry, but insufficient regulation of the supply side of the market,’€ said Harrison.

The data presented in the Health Review show that progress has been made by government in providing financial stability to the previously under-regulated medical schemes environment. This has curbed opportunities for discrimination by health care funders against older and more sickly members of the medical scheme population.

Regulatory and legislative measures were being put in place to address these abuses where they continued to take place, Harrison added.

He identified the remaining problems as ongoing cost escalation, with related decrease in affordability of medical scheme contributions and growing disparity between health expenditure in private and public health.

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