Benefit Incidence, Financing Incidence and Need of Healthcare Services in South Africa

In the context of the envisaged implementation of National Health Insurance (NHI) in South Africa by 2025/26, it is necessary to understand how healthcare benefits, healthcare financing and the need for healthcare services are distributed across different parts of the socioeconomic distribution. In this note we determine which part of the socioeconomic distribution benefits from healthcare services, as well as to what extent, by calculating benefit incidence for healthcare in South Africa. The burden of healthcare funding is determined by conducting financing incidence analysis, and we rely on mortality estimates in our measurement of healthcare need. We find that financing incidence is strongly pro-poor, with the two richest quintiles financing the majority of healthcare benefits for all. The poorest three quintiles receive more healthcare benefits than they pay for (in line with principles of equity and social solidarity), but each still receive less than the two richest quintiles. The three poorest quintiles also receive fewer benefits than their need for healthcare services indicate. These results are important to consider in the ongoing debate surrounding the proposed NHI.