According to recent industry analysis, the South African healthcare market is poised to double in growth by 2020. The report cites a significant statistic in that the “South African pharmaceutical market is expected to grow at a Compound Annual Growth Rate (CAGR) of 5.8 percent, from $2.5 billion in 2011 to $4.2 billion by 2020.”
Due mostly to major healthcare sector reforms, market growth was catalyzed by the South African government’s adoption of the National Health Insurance (NHI) policy. This new legislation seeks to “significantly reduce the direct healthcare costs for low-income families and households, especially those living in rural areas that bear the highest disease and poverty burden.”
Like military expenditures, healthcare access is one of the largest components of most countries’ Gross Domestic Product. In the United States, for example, healthcare makes up about 20 to 25 percent of the total GDP – a staggering number compared to European figures.
Despite this, healthcare access and the growth of this sector has become a central topic the world over.
Companies situated in or seeking to penetrate the global healthcare market are constantly discussing lessons learned while reporting growth rates in various areas. Even technology companies that provide database management, bandwidth leasing, security systems and other forms of software and hardware are seeking to present at an array of international consortiums and conventions on healthcare and health provision.
For South Africa, recent legislation that brings global insurance companies into the marketplace means the country will likely attract an increase in foreign direct investment into its healthcare infrastructure and peripheral markets. While the state will likely pull out of the transactions between citizen and healthcare provider (mitigated by insurance agencies), some stakeholders are calling for additional oversight and regulation to ensure healthcare is distributed equally and fairly among South Africa’s population.
According to Global Data’s industry analysis, “South Africa is also modernizing its regulatory structure to speed up drug approvals and increase foreign investment into the country.” If successful, South Africa will have employed a largely insurance-based healthcare system that benefits major actors in its private healthcare market.
Growth will continue to rise in this area along the same trends as other global healthcare providers, while oversight and regulation will shift the conversation away from provision and instead to how it is applied.
Edited by Braden Becker