The South African Private Healthcare Sector: Role and Contribution to the Economy

Approximately half of national health expenditure in South Africa is currently being spent in the private healthcare sector. While this constitutes a large portion of total healthcare spending, this also underscores the importance of the sector. This research note summarises the main findings of a larger Econex report in which we considered the importance of this sector by looking at various potential linkages to the greater economy. The findings of our study indicate that the private healthcare sector interacts with, and thereby substantially affects, a number of other industries in the economy. The results indicate that each group of participants in the sector – hospitals, doctors and nurses, allied health professionals, other hospital personnel, medical schemes, administrators, managed care companies, brokers, consultants and other health insurers – is connected to other upstream and downstream industries and through these linkages has far reaching economic effects. The sector creates employment and investment opportunities, provides training and development programmes, creates international linkages, and encourages healthcare scalability through innovation and productivity gains.