SA schemes 'extremely expensive'

Medical costs in South Africa are up to five times higher than other nations, Business Report reported on Thursday.

Department of Health head of pricing Anban Pillay said the cost of hospitalisation for maternity was US3000 (R24,605) while the average cost in Organisation for Economic Co-operation and Development (OECD) countries, comprising mostly developed nations, was US2750 (R22,554), the paper reported.

However, when the cost was adjusted for purchasing power, other countries only paid about US500 (R4100).

Pillay said the purchasing power estimate was based on the entire South African population's affordability levels. However, even if it was adjusted to include only those with medical schemes, it would still not come close to the average of OECD countries.

"Clearly, the prices in South Africa are much higher that the affordability level," Pillay said. "Even if you adjust it to the wealthiest person in the country, it will still be higher."

He said private sector pricing could be reformed based on costing information in the public sector.

Medical costs in South Africa are up to five times higher than other nations, Business Report.

Department of Health head of pricing Anban Pillay said the cost of hospitalisation for maternity was US3000 (R24,605) while the average cost in Organisation for Economic Co-operation and Development (OECD) countries, comprising mostly developed nations, was US2750 (R22,554), the paper reported.

However, when the cost was adjusted for purchasing power, other countries only paid about US500 (R4100). When direct comparisons are made, not allowing for purchasing power adjustments, many items appear to be on a par with overseas costs, but in reality they are far from it.

Pillay said the purchasing power estimate was based on the entire South African population's affordability levels. However, even if it was adjusted to include only those with medical schemes, it would still not come close to the average of OECD countries.

"Clearly, the prices in South Africa are much higher that the affordability level," Pillay said. "Even if you adjust it to the wealthiest person in the country, it will still be higher."

He said private sector pricing could be reformed based on costing information in the public sector.

Here's what the MD of Medscheme SA had to say earlier in the the year about why SA medical schemes were so expensive.

Here are 20 ways in which you can cut your medical costs.

Have your say in the comment box below.

(Source: Business Report, Fin24, Medscheme, July 2012)