This thesis examines the structure and flow of public funding between the public and private sectors in the South African health system and the consequences thereof for the achievement of equity. The conceptual framework used to undertake the analysis derives from Richard Titmuss’ core theoretical framework, the Social Division of Welfare. The application of the Social Division of Welfare applied to the South African health care context demonstrates how state resources end up benefitting the non-poor and, as a result, reproduce inequality. Those who access public institutions such as public health care are assumed to be ‘dependent’ on the state, whilst those who access private health facilities claim to be ‘independent’ of the state. However, this thesis shows that these assumptions are flawed. Access to the formal labour market, and subsequently the paying of taxes, authorises one to access state subsidies not available to those who do not. The application of the Social Division of Welfare shows that tax-paying private health care patients benefit considerably from state resources. This thesis argues that due to cost escalation in the private health sector, a consequence of the commodification of health care, these private health care ‘consumers’ as well as the private health industry in general are dependent upon state resources. This thesis analyses the role played by the profit motive present in the private health industry and the consequences for equity, quality, access and efficiency in health care provision