This thesis is intended as a broad examination of the distribution of health resources in South Africa. Issues both macro and micro in nature have been covered to provide a perspective that would be Jacking in a narrower study. Although the title refers to a redistribution of resources, the intention of this thesis is to stress the importance of providing appropriate health measures rather than merely apportioning existing facilities evenly. This realization is insufficient, however, if it is not accompanied by the introduction and utilization of analytical approaches for identifying resource selection priorities. The influences on health status are many. In defining appropriate measures to improve health status it is important to be aware of the limitations of medical-care. Chapter three involves a cross-sectional regression analysis of various countries in order to examine the influences certain variables have on health status. This study suggests the need for an integrated approach to improving the health of a population. Merely focusing on medical care will only have a limited affect. However, this does not mean that medical-care is not important. It must just be provided in an appropriate manner. The rest of the thesis evaluates health-care resource distribution in South Africa. The existing distribution of health-care resources in South Africa is ill-suited to the existing health status of the population. There is a bias toward urban based curative facilities. Furthermore, the location of facilities has been based on racial criteria, whereby some areas have sufficient resources for their needs while others do not. Two methods of identifying how these issues should be dealt with are produced in this thesis. The first deals with a method for adjusting the broad distribution of funds toward those areas where need is greatest. The suggestion put forward by this thesis is that a formula be developed that would be able both to define need on a geographical basis, and to allocate resources based on that need. The formula would be used to allocate government health expenditure. This section is based on a formula that was developed in the United Kingdom. The second deals with a method for defining appropriate medical interventions on the micro level. It is called cost-effectiveness analysis (CEA). CEA is used for micro-economic decision-making where a choice has to be made between at least two alternatives for attaining a particular objective. Furthermore, CEA evaluates projects or programmes that are on-going in nature. It should be noted that CEA can also evaluate non-medical interventions to solve a particular health problem. In order to indicate the type of information that a CEA can provide, an investigation into cervical cancer procedures used on black females was produced. The entire black female population of South Africa was examined. A computer simulation of incidence and mortality rates of the disease was used to evaluate various scenarios. The results indicate that significant gains can be made by introducing cervical cancer screening on a large scale in South Africa. A major priority of this thesis was to stress the importance of using economic criteria to assist in making decisions concerning health-care resource allocations. Very little work of this nature is produced in South Africa. Hopefully this will not always be the case.

Thesis (MBA (Business Management))--University of Stellenbosch, 2009. / ENGLISH ABSTRACT: In the field of Economics, the term “competition” refers to the method involved in steering an increase in supply, which leads to a decrease in equilibrium price and an increase in equilibrium quantity. However, competition involves more than just an increase in supply. In any economy, competition can affect factors, such as innovation, efficiency and the accessibility to goods and services. In some cases, the effect might not be positive, if the goods and services only benefit certain parties involved, rather than the general population. Traditionally, there are four basic types of market structure, with each structure displaying unique market power characteristics, which are initiated by an organisation’s profit motives. All market structures, other than that of perfect competition, are forms of imperfect competition. One such imperfect market structure is oligopoly, which has certain unique characteristics (Doyle, 2005:198). In the private health care sector, cost increases can be related to the increased market concentration, due to the increase of market power by hospital groups. Therefore, the prevalence of competition in the private health care sector should be monitored. That health care functions in a dynamic environment has been historically proven and can also be seen in the latest trends. A bundle of factors, rather than a single factor, determines success. Any overview of the international health care industry should demonstrate the rapid development of the industry. The industry, compared with the relatively elementary and experimental health care system of a few decades ago, is currently super specialised. A shift has taken place in the market from the role of the industry as a government-funded health care provider to that of a private hospital provider. In South Africa, the complexity of the health care sector is made even more complex by the many role-players and the interaction between the different private and public health providers. The cost of access to hospitals should be prioritised. Research shows that the private health care sector caters for the health needs of almost seven million people, who comprise only 15% of the total population. However, the sector has spent more money than the entire public sector, with the per capita expenditure exceeding that of the public sector eightfold. The increase in the cost of private hospitals in South Africa has been caused by changes in the market concentration. Such expenditure has given the private hospitals greater market power and has influenced their behaviour. / AFRIKAANSE OPSOMMING: In ekonomie verwys die term “kompetisie” na die metode betrokke om ’n toename in aanbod te veroorsaak, wat weer ’n verlaging in die ewewigsprys en ’n verhoging in die ewewigshoeveelheid tot gevolg het. Kompetisie behels egter meer as net ’n verhoging in aanbod. In enige ekonomie kan kompetisie faktore soos innovasie, doeltreffendheid en toegang tot goedere en dienste beïnvloed. In sommige gevalle is die effek egter nie positief nie, soos wanneer goedere en dienste slegs sekere belanghebbendes bevoordeel in plaas van die algemene publiek. Daar is, tradisioneel gesproke, vier basiese markstrukture wat elkeen unieke markbeherende eienskappe toon wat deur die organisasie se winsmotiewe geïnisieer word. Alle markstrukture, behalwe volmaakte kompetisie, is vorms van onvolmaakte kompetisie. Een so ’n markstruktuur is oligopolie wat sekere unieke eienskappe toon. In die privaat–gesondheidsorgsektor, is kosteverhogings gekoppel aan verhoogde markkonsentrasie as gevolg van die toename in privaat hospitaalgroepe. Kompetisie in die privaat-gesondheidsorgsektor moet dus gemonitor word. Dat gesondheidsorg in ’n dinamiese omgewing funksioneer is reeds bewys en kan ook in die nuutste tendense gesien word. Dit is egter ‘n hele groep faktore, nie slegs een faktor nie, wat sukses waarborg. ’n Oorsig van die internasionale gesondheidsorgindustrie toon dat ontwikkelinge in die industrie baie vinnig vorder. Vandag is gesondheidsorg uiters gespesialiseerd in vergelyking met dekades terug, toe dit relatief elementêr en eksperimenteel was. Die rol van die industrie het verskuif van ’n staats-gesubsidieerde diens na waar dit vandag grootliks deur privaat instansies gelewer word. In Suid-Afrika word ’n reeds komplekse gesondheidsorgsektor meer gekompliseer deur die baie rolspelers in die sektor asook die interaksie tussen die verskillende privaat- en staatsgesondheidsorgvoorsieners. Die koste van toegang tot hospitale behoort ’n prioriteit te wees. Navorsing toon dat die die privaatgesondheidsorgsektor dienste aan sewe miljoen mense bied wat slegs 15% van die totale populasie is. Hierdie sektor spandeer egter baie meer as die met ’n per capita uitgawe byna agt keer meer as staatsgesondheidsorg. Die oorsaak van koste verhogings in privaatgesondheidsorg in Suid-Afrikaanse hospitale is veroorsaak deur veranderinge in die konsentrasie van die privaatgesondheidsorgsektor. Dit gee privaathospitale groter markmag en beïnvloed dus hul optrede.

Bibliography: pages 94-102. / There is currently much work underway internationally to improve the accuracy and to refine the detail of accounting for health care expenditures. This research was initiated by the increasing activity in the field of national health accounting, as well as by previous research indicating that the Reserve Bank might be underestimating private health care expenditure in the national accounts. The Reserve Bank estimate of health care expenditure is important as it is the only complete and regularly produced estimate of private sector health care expenditure for South Africa. It was posited that an independent estimation of private health care expenditure would show that its magnitude is underestimated in the expenditure estimates published by the Reserve Bank for the national accounts. This thesis was upheld by the results of the research. The thesis estimate of private health care expenditure was R15 billion, 39% higher than the Reserve Bank estimate available at the time. It was also 21% higher than the final Reserve Bank estimate published in December 1995. The methodology used to derive the thesis estimate involved a survey of national income accounting concepts and guidelines embodied in the internationally used publication, the 1993 System of National Accounts. Primary data was collected from a wide range of institutions in the South African health sector. Secondary data sources were also consulted in several instances. In particular, the Registrar of Medical Schemes was consulted for medical scheme expenditure estimates as they constitute the largest portion of private sector health care expenditure in South Africa. The thesis estimate was then calculated for a single year according to the 1993 System of National Accounts guidelines. The year chosen was the government financial year from April 1992 to March 1993. The year was chosen to coincide with the year chosen for a national health expenditure review. In the presentation of the results, the estimate was broken down in separate "sources" and "uses" matrices, which are being used internationally to present national health accounting information. From the comparison of the Reserve Bank and thesis expenditure estimates, one of the most important recommendations that emerged was that the Reserve Bank should consult a wider range of expenditure data sources, more timeously and regularly. In particular, it was suggested that the Reserve Bank should negotiate earlier access to the data held by the Registrar of Medical Schemes, as well as cross-check household survey data with independent estimates of out-of-pocket and statutory scheme health care expenditure. In addition to providing a new benchmark estimate for private sector health care expenditure in the government financial year 1992/93, the breakdown of the estimate into matrices provides a framework that could be used as the basis for the development of more detailed satellite national health accounts, in accordance with 1993 SNA standards.

Thesis (MBA)--University of Stellenbosch, 2010. / The aim of this research report is to identify and quantify the cost drivers of three district hospitals in the Western Cape, namely Knysna Hospital, Oudtshoorn Hospital and Mossel Bay Hospital, and to simultaneously measure value-driven performance indicators. An environmental scan identified various driving forces that would significantly affect change in the healthcare industry such as the brain drain of health professionals, consumerism and cost containment and efficiency initiatives. The Department of Health’s understanding of the eighth Batho Pele principle of value for money is generally understood as providing quality health care within prescribed cost limits. An attempt is made to establish the effect of the quadruple burden of disease (the HIV/AIDS pandemic, persistent infectious diseases, injury arising from violence and road traffic collisions and emerging chronic conditions) on hospital expenditure in the Eden District. Research identified Mossel Bay as a high TB burden area known as a TB “hotspot” and it is a recognized immigration transit point en route to Cape Town. The population analyses revealed that Mossel Bay is the growth point of the Eden District, showing extraordinary growth of 25% between 2007 and 2009. Personnel costs: This study revealed that personnel costs are responsible for the overwhelming majority of the total expenditure of the district hospitals.Staff numbers, occupation specific dispensation (OSD) implementation and annual wage negotiations are the cost drivers of personnel costs. This study also found a clear correlation between an over-expenditure in personnel expenses and over-expenditure in the total expenditure of all three hospitals. Health care costs: Expenditure on blood products is considered a major cost driver of clinical expenses. Laboratory expenditure is clearly the largest cost driver for clinical expenses at all three hospitals. Together with laboratory expenses, medicine and medical supplies are the cost drivers for clinical expenses. Costs not related to health care: The three most significant administrative expenses are communication, stationery and printing as well as travel and subsistence allowances. The cost driver for subsistence and travel expenses is the number of vehicles followed by the preference of vehicle, which in turn determines the daily tariff and the kilometre tariff. This study revealed that Knysna Municipality has the cheapest electricity cost of the three towns. It is clear that cost and consumption of electricity and water are the two variables that affect municipal service expenditure the most. Equity: When the district hospital expenditure is combined with the primary health care expenditure in the three sub-districts, the figures show that Oudtshoorn is spending 3% more than its equitable share of the total budget at a higher cost of R978 per capita, in excess of R100 above the district average. Efficiency: The cost per patient day equivalent (PDE) per economic classification for all three hospitals is less than the average cost per PDE of the district hospitals in the Western Cape. The cost/PDE of Oudtshoorn Hospital is considerably higher than that of Knysna and Mossel Bay in all economic classifications, with the single exception of the agency cost of Mossel Bay Hospital. The cost of health care always reflects a combination of price, quantity and value, and it is impossible to consider individual cost drivers in isolation. Several cost-saving initiatives and managerial control measures are recommended.