Redressing Dis-advantage: Promoting Vertical Equity within South Africa

Abstract

This paper represents the first attempt to applyvertical equity principles to the South African healthsector. A vertical equity approach, which recognisesthat different groups have different starting pointsand therefore require differential treatment, appearsto offer an appropriate basis for considering how bestto redress the vast inequities which exist inpost-Apartheid South Africa. Vertical equityprinciples are applied in critically analysing twoareas of recent policy action which are particularlyrelevant to health sector equity in South Africa,namely public-private sector cross-subsidies and theallocation of government resources between provinces.Despite a strong political commitment to redressinghistorical inequities, recent government policyactions in these two areas appear to fall short ofdesirable goals when viewed through a vertical equitylens. In particular, policies since the firstdemocratic elections in 1994 have done little toreduce the extent of government subsidies to theprivate health sector, which serves a minority of thepopulation. In addition, recent proposals for a SocialHealth Insurance will allow minimal cross-subsidiesbetween high- and low-income earners and would notadequately redress the currently inequitablepublic-private cross-subsidies. With respect to theallocation of government resources between provinces,a vertical equity approach would suggest that the mosthistorically dis-advantaged provinces have an evengreater claim on government resources than reflectedin the current formula, as developed by the Departmentof Finance. This paper also considers the potentialbenefits of engaging with societal views indetermining what constitutes dis-advantage in theSouth African context, in order to identify those whoshould receive priority in resource allocationdecisions. It concludes with a review of a number ofpractical steps that can be taken to draw verticalequity principles into policy action.