/ 14 June 2013

There’s healthy profit – and then there’s healthcare profits

Last year
Last year

Last year, expenditure on healthcare in South Africa was about 8.6% of gross domestic product.

Of that amount, public sector spending represented 4.2%, and private healthcare represented 4.4%, according to a 2012 report presented to the Competition Commission.

Though only 16% of South Africans make use of private healthcare, the split between public and private spending was almost even, meaning the same amount is spent on healthcare for the other 84% of the population.

Some believe that the high prices in the private sector are driven by market concentration.

Hospital groups Mediclinic, Netcare and Life Healthcare now own about 80% of the market.

As they became more dominant, their profitability increased at a rate significantly higher than global comparator firms.