Financing of medical products in South Africa

Mamdoo, Punithasvaree (2019-12)

Thesis (MMed)--Stellenbosch University, 2019.


ENGLISH SUMMARY : Background: Medical products (encompassing medicines and medical devices) are critical health system building blocks; access to medical products (ATM) impact clinical outcomes. However, cost and operational inefficiencies in the health system limits ATM. Funding strategies and policy reforms are key instruments in managing the supply and demand side determinants of ATM. Objectives: This study aimed to 1) analyse the South African(SA) regulatory framework for medical products; 2) review expenditure on medical products at Private, Public and Household levels; and 3) describe ATM using the WHO Building Blocks framework and 4) gauge the status of supply and demand side determinants of ATM. Methodology: A mixed methods study design was used to represent ATM complexity in the health system. USAID’s Health System Assessment Approach was used to analyse the enabling legislative and regulatory landscape for ATM in SA. Unpublished National Treasury, provincial Departments of Health and Council for Medical Schemes Annual Reports were sources for the descriptive trend analysis of public and private sector medical products expenditure. Household out-of-pocket expenditure was analysed from Statistics SA national household survey data. With data from key informant interviews, a systems diagram was constructed. District Health information system and national survey data was used to present current system performance using supply and demand side indictors of ATM. Results: Medical products expenditure is a major cost driver in the private sector. Households with medical aid, spent more OOP on medical products than the uninsured; province, household size and income sources were not significant factors in estimating medical products expenditure. In the public sector, trends demonstrate increasing investment in medical products, however indicators of supply side ATM determinants show poor performance. In 2014, health contributed 0.9 %( R935) of total household expenditure; which does not constitute catastrophic expenditure levels. A larger proportion of total health spending is on medical products (0.7%) than outpatient medical services (0.6%) in average SA households; pharmaceutical expenditure dominates (90%) compared to therapeutic appliances and other medical products combined (10%). In uninsured households NC and LP provinces and Indian and White population groups were the only statistically significant variables in estimating expenditure. Male headed households spend more actual Rands on medical products than female headed households. A R31.00 decrease in expenditure for rural insured households was calculated for each increase in expenditure by urban insured households. Households in FS, NW, EC and NC had the highest OOP expenditures on medical products. Households in LP had the lowest OOP expenditure on medical products in the survey period. Conclusions and Recommendations: There are opportunities in the scale up to UHC to implement policy options to increase ATM. Capacity building is needed to ensure equitable fiscal allocations, ability to absorb resources and optimise service delivery within government. Need for improved monitoring and data analytics of cost, access and utilisation of medical products at public health facilities; OOP spending on medical products in private sector in terms of outpatient and hospitalisation and survey data at household level spending. Managed care Organisations can contribute to ATM through quality and clinical governance in the private sector.

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