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144 Fighting the Diseases of Poverty
Second, social programs nominally targeted at low-income
groups are frequently captured by the articulate and influential rich
(Deolalikar, 1995; Castro-Leal et al., 1999; Barat et al., 2003).
Third, public funding and provision can crowd out private
funding and provision of healthcare. If a government starts to
provide a good or service for ‘free’, this is a clear signal to private
providers to exit the market. The net amount of healthcare provided
may remain constant – but where there was once diversity of provision,
there is now an effective monopoly, which has its own efficiency
problems. As a result, public funding and provision typically
has little to no impact on actual health outcomes (Filmer, Hammer
& Pritchett, 2000).
Case study: How the South African health system
hinders access to medicines
Jasson Urbach, Free Market Foundation, South Africa
The experience of the South African public health system offers
some insights as to why 20 per cent of the country’s population
is unable to access essential medicines (UN, 1999).
At the outset it should be made clear that there are two
distinct and separate health sectors in South Africa. The
dichotomy is largely a hangover from past policies formulated
under the apartheid regime. On the one hand the private health
sector provides a world-class health service, with excellent
facilities, advanced technology, well-remunerated staff and
good access to all medicines. On the other hand the public
sector is plagued with inefficiency and for the most part South
Africa’s public health care system struggles to meet the needs
of the patients it is supposed to be serving. The result is that
patients seldom receive the level of care that they deserve.
The South African government receives medicines at
substantially reduced costs from large multinational
pharmaceutical companies. However, historic and ongoing lack
of infrastructure, personnel and poor logistics means that
frequently the medicines do not reach those for whom they