Rising Prices in the Healthcare Sector: Unpacking Health Inflation

This research note considers the divergence between health inflation and headline inflation (CPI) in South Africa. The composition of health inflation and its contribution to headline inflation are discussed. The note also specifically considers the difference between hospital price inflation, medical scheme contribution increases and health inflation (as captured by Statistics South Africa in the CPI calculations). It is shown that there are large differences between the respective trends over time. These trends are expected to be of importance for the Competition Commission’s inquiry into the private healthcare sector.