The Impact of Financing Health Services on Income Inequality in an Unequal Society: The Case of South Africa

John E. Ataguba ()
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John E. Ataguba: University of Cape Town

Applied Health Economics and Health Policy, 2021, vol. 19, issue 5, No 9, 733 pages

Abstract: Abstract Background Equitable health financing is crucial to attaining universal health coverage (UHC). Health financing, a major focus of the National Health Insurance in South Africa, can potentially affect income distribution. Objective This paper assesses the impact of financing health services on income inequality (i.e. the income redistributive effect [RE]) in South Africa. Methods Data come from the nationally representative Income and Expenditure Survey (2010/2011). A standard approach is used to estimate and decompose RE for the major health financing mechanisms (taxes, insurance and out-of-pocket health spending) into the sum of the vertical effect (i.e. the extent of progressivity or regressivity), horizontal inequity (i.e. the extent to which ‘equals’ are not treated equally) and reranking effect (i.e. the extent to which individuals or households change ranks after paying for health services). Results Financing health services through direct taxes (RE = 0.0072, P

Date: 2021
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DOI: 10.1007/s40258-021-00643-7

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