The Demand for Health Care in South Africa

Abstract

Supply-side solutions to health-care provision dominate the South African debate. These are often premised on views that health resources are too concentrated in the private health sector - which supposedly serves only a small minority - and that public provision needs to be expanded. This misunderstands the nature of the demand for health services. This paper estimates the determinants of the demand for health care using a multinomial logit estimation and finds that three categories of factors influence this demand: demographic and locational variables (e.g. income, race and location); characteristics of the care provided (e.g. cost and distance from the respondent); and characteristics of the illness (such as its severity).Even poor respondents reveal a clear preference for private care, despite constraints of money and access. This dominance of the demand for private health care is likely to increase with rising incomes, or if all health services were to be similarly subsidised (e.g. from mooted medical insurance-type schemes). Greater attention should therefore perhaps be given to health demand in considering policy alternatives.