Health Services Revenue Generation – Provinces – Costing

Hospitals charge non-poor patients for some services, using a sliding scale based on income. In 2016/17, South Africa’s public hospitals collected R1.54 billion in patient fees — about 8% of the costs of providing hospital services — but they have risen at less than 1.5% a year between 2012 and 2016/17. Two-thirds of patient revenues are received from medical aids and the RAF, 11% from other departments, and nearly 15% from individuals whose incomes exceed various thresholds. Revenues per bed vary considerably: in the Western Cape, every hospital bed generated, on average, about R47 000, against a national average of less than R18 000 per bed and R10 000 or less in three provinces. The costs associated with collecting this revenue are not always readily identifiable, but it is estimated that these activities cost R271 million in 2016/17, a figure that has been rising at a rate of about 8% a year since 2012/13. Using both revenue and cost data, it appears that about R6 of revenue is generated for every R1 of spending on revenue collection, but there is wide variation among provinces, with the Western Cape collecting about R20 per rand spent and the Northern Cape’s revenues barely covering the costs of collection.