How Healthcare Works in South Africa

By the end of this guide, you should understand:

• What healthcare is.
• What healthcare funding is.
• The difference between public and private healthcare.
• The four main ways healthcare is funded in South Africa.
• Where medical schemes (medical aid) fit into the healthcare system.
• Where health insurance fits into the healthcare system.
• Why understanding the healthcare system comes before comparing products.

Healthcare is the care and treatment people receive to help them stay healthy, prevent illness, diagnose medical conditions and treat injuries or diseases.

Whether you visit a doctor for a routine check-up, collect medicine from a pharmacy, have an X-ray, undergo surgery in hospital or receive emergency treatment after an accident, you are receiving healthcare.

Healthcare is provided through many different healthcare professionals and services, including:

• Doctors and general practitioners (GPs)
• Nurses
• Dentists
• Pharmacists
• Clinics
• Hospitals
• Ambulance services
• Specialists
• Physiotherapists
• Psychologists
• Radiology practices
• Pathology laboratories
• Many other registered healthcare professionals

Each of these healthcare providers has a different role, but they all contribute to caring for your health and wellbeing.

A healthcare provider assesses your healthcare needs and, where appropriate, discusses the available treatment options with you.

This brings us to another important part of the healthcare system: how that healthcare is paid for.

When people first start learning about healthcare, it is easy to think that healthcare, medical aid and health insurance all mean the same thing.

They don’t.

Healthcare is the treatment and care you receive.

Medical schemes (medical aid) and health insurance are different ways of helping to fund that healthcare.

Understanding the difference between receiving healthcare and paying for healthcare is an important first step in understanding the South African healthcare system.

Healthcare funding is the way healthcare services are paid for.

In South Africa, healthcare may be funded in several different ways. The government may fund healthcare through the public healthcare system, a medical scheme may pay according to its rules, a health insurance policy may provide a particular benefit, or you may pay for healthcare yourself.

Sometimes more than one funding arrangement may be involved.

The important distinction is that the person or facility providing your healthcare and the arrangement paying for that healthcare do not necessarily perform the same role.

A doctor provides healthcare.

A medical scheme or insurer may provide funding towards that healthcare.

You may also be responsible for paying some or all of the cost yourself.

This is why understanding healthcare funding is just as important as understanding the healthcare services you receive.

There are four main ways healthcare may be funded in South Africa.

Understanding these funding options will help you see where government funding, medical schemes (medical aid), health insurance and self-payment fit into the wider healthcare system.

1. Government Funding

When people receive healthcare through the public healthcare system, such as a public clinic or state hospital, the healthcare is mainly funded by government through taxes.

Depending on a person’s financial circumstances and the applicable government rules, healthcare may be provided free of charge or a fee may be payable.

Public healthcare provides a wide range of services, from routine clinic visits to highly specialised treatment at public hospitals.

2. Medical Scheme Funding (Medical Aid)

Many South Africans belong to a registered medical scheme, commonly known as medical aid.

Members pay monthly contributions into the medical scheme.

The medical scheme pays healthcare benefits according to the law, its registered rules and the member’s selected benefit option.

What is paid will depend on the healthcare service, the selected benefit option, the scheme’s rules and the circumstances of the claim.

3. Health Insurance

Health insurance is another way of helping to fund healthcare.

Unlike a medical scheme, health insurance provides the particular benefits set out in the insurance policy.

Exactly what is covered depends on the type of policy and its terms and conditions.

Some people choose health insurance without belonging to a medical scheme, while others may use certain types of health insurance together with a medical scheme.

We will explore these differences in more detail later in the Curalern learning journey.

4. Self-Payment

Some people choose to pay for healthcare directly from their own pocket.

This is known as self-payment or out-of-pocket payment.

Self-payment may happen because a person:

• does not use the public healthcare system;
• does not belong to a medical scheme;
• does not have health insurance;
• chooses not to claim from their medical scheme or health insurance; or
• no longer has benefits available for a particular healthcare service.

Self-payment can apply to many different healthcare costs, including consultations, medicine, dental treatment, eye care, physiotherapy, X-rays and blood tests.

It may also form part of someone’s healthcare funding even when they have medical aid or health insurance.

Bringing It All Together

The way healthcare is funded can differ from person to person.

Government funding, medical schemes, health insurance and self-payment each work differently and have their own rules or requirements.

Understanding these four funding routes gives you the foundation for exploring each one in more detail later.

There are three important roles to understand in your healthcare journey: you, the healthcare provider and the healthcare funder.

You ↔ Healthcare Provider ↔ Healthcare Funder

Each has a different role.

You – The Patient

You are at the centre of your healthcare journey.

When you need healthcare, you may visit a doctor, clinic, pharmacy, hospital or another healthcare professional.

You may need to make decisions about your treatment, which healthcare provider you use and how your healthcare will be funded.

The more you understand about your healthcare and funding arrangements, the easier it becomes to ask the right questions and make informed decisions.

The Healthcare Provider

The healthcare provider is the person or organisation providing your healthcare.

This could include:

• a doctor;
• a specialist;
• a dentist;
• a pharmacist;
• a clinic;
• a hospital;
• a physiotherapist;
• a radiology practice;
• a pathology laboratory; or
• another healthcare professional or facility.

The healthcare provider assesses your healthcare needs and, where appropriate, discusses the available treatment options with you.

Depending on the healthcare service you need, more than one healthcare provider may be involved in your treatment.

The Healthcare Funder

The healthcare funder pays for healthcare according to the rules and conditions of the particular funding arrangement.

The funding may come from government, a medical scheme, an insurer through a health insurance policy, or directly from you.

Sometimes more than one funding arrangement may be involved.

For example, a medical scheme may pay part of an account and you may be responsible for the remaining amount.

This is why it is important to understand not only who is paying, but also what they have agreed or are required to pay.

One Important Point

A healthcare provider may recommend treatment because it is appropriate for your healthcare needs.

This does not automatically mean that your medical scheme or health insurance policy will pay the full cost.

The funding arrangement has its own rules, benefits, limits and requirements.

We will explore these in more detail later in the Curalern learning journey.

South Africa has both a public healthcare system and a private healthcare system.

Both provide healthcare, but they operate and are funded differently.

Public Healthcare

Public healthcare is provided through government healthcare facilities such as public clinics, community health centres and state hospitals.

The public healthcare system is mainly funded by government through taxes.

Depending on the healthcare service and a person’s circumstances, treatment may be provided free of charge or a fee may be payable.

Public healthcare includes many different types of care, from primary healthcare at local clinics to specialist treatment and surgery at larger state hospitals.

Private Healthcare

Private healthcare is provided through privately operated healthcare professionals and facilities.

These may include:

• doctors;
• specialists;
• dentists;
• pharmacies;
• private clinics;
• private hospitals;
• physiotherapists;
• radiology practices;
• pathology laboratories; and
• other private healthcare professionals and facilities.

Private healthcare is generally paid for through a medical scheme (medical aid), health insurance where the policy provides the relevant benefit, self-payment, or a combination of funding arrangements.

An important point to remember is that using private healthcare does not automatically mean that you have medical aid.

You can visit a private healthcare provider and pay for the healthcare yourself.

You now understand that healthcare and healthcare funding are two different things.

You also know that South Africans may receive healthcare through the public or private healthcare system, and that healthcare can be funded in different ways.

So where do medical schemes (medical aid) and health insurance fit in?

Both can help with the cost of healthcare, but they are not the same thing.

Medical Schemes (Medical Aid)

A medical scheme, commonly known as medical aid, is a regulated way of funding healthcare.

Members pay monthly contributions into a registered medical scheme.

Healthcare benefits are paid according to the law, the scheme’s registered rules and the member’s chosen benefit option.

Medical schemes are regulated under the Medical Schemes Act and must provide certain legally required minimum healthcare benefits, known as Prescribed Minimum Benefits (PMBs).

We will explain how medical schemes work in more detail later in the Curalern learning journey.

Health Insurance

Health insurance works differently.

A person pays a premium for an insurance policy that provides particular benefits according to the terms and conditions of that policy.

Depending on the type of policy, the benefit may relate to particular healthcare services, for example, treatment following an accident, a qualifying hospital stay or another event covered by the policy.

Health insurance does not automatically provide the same benefits or legal protections as a medical scheme.

Exactly what is provided depends on the type of insurance and the policy wording.

We will also explore health insurance in more detail later in the Curalern learning journey.

The most important ideas are:

• Healthcare is the care and treatment you receive.
• Healthcare funding is how that care and treatment is paid for.
• South Africa has both public and private healthcare.
• Government funding, medical schemes, health insurance and self-payment are different ways healthcare may be funded.
• Healthcare providers provide healthcare.
• Healthcare funders provide funding.
• Medical schemes (medical aid) and health insurance are not the same thing.
• The rules of your particular funding arrangement determine what may be paid.

If you understand these basic ideas, you have the foundation you need to start exploring the South African healthcare system in more detail.

Now that you understand the basic structure of the South African healthcare system, we can start looking at each part more closely.

The next guide is:

From there, we will gradually explore medical schemes, health insurance and the other important parts of healthcare funding in South Africa.

We’ll take it one step at a time.