An estimated 15% of South Africa’s healthcare spending is lost to fraud, waste and abuse, costing the sector about R30bn a year, while millions of South Africans are increasingly unable to afford medical scheme cover, delegates heard at the Board of Healthcare Funders’ (BHF) annual conference in Cape Town on Monday.
Speaking at the conference, acting Special Investigating Unit (SIU) head Leonard Lekgetho said fraud and corruption continue to undermine both the public and private healthcare sectors, increasing costs for patients and medical scheme members while diverting resources away from healthcare services.
Speaking to Business Day, BHF MD Katlego Mothudi said the estimated R30bn annual loss represented a significant drain on South Africa’s healthcare system, reducing resources available for patient care while driving up medical scheme premiums and ultimately affecting affordability and access.
He said the estimated annual cost of fraud, waste and abuse had increased from about R22bn in 2019 to around R30bn today, indicating that the financial impact on the healthcare sector continued to grow.
Lekgetho, who also chairs the Health Sector Anti-Corruption Forum (HSACF), said an estimated 15% of healthcare expenditure is lost to fraud, waste and abuse.
Mothudi said the estimate was consistent with the BHF’s long-standing assessment that fraud, waste and abuse account for about 15% of annual medical scheme contributions, based on total industry contributions of about R250bn. While the precise level of losses varies across schemes, he said losses of this magnitude reduce the resources available to deliver healthcare and reinforce the need for stronger governance, better data sharing and coordinated enforcement.
Lekgetho said common abuses included procurement irregularities, counterfeit medicines, price-fixing, duplicate claims, overservicing and fraudulent billing.
The SIU has completed 25 health sector investigations, resulting in 306 disciplinary referrals, 377 criminal referrals and the recovery of R3.9bn.
“Criminals do not sign MOUs [memorandums of understanding]; they just collaborate. So, for us, we must sign MOUs. We must collaborate,” Lekgetho said.
Mothudi said the consequences extended beyond financial losses.
“Every rand lost is a rand diverted from patient care, health system resilience and broader access to quality healthcare,” he said.
Lekgetho’s presentation showed that the health sector was identified as one of South Africa’s most corruption-vulnerable industries following a national risk assessment conducted using auditor-general reports, whistleblower disclosures, parliamentary oversight reports and law enforcement investigations.
The forum was established in 2019 to improve collaboration among government, regulators, civil society, law enforcement agencies and the private sector in combating healthcare fraud.
Medical scheme membership drops
The conference heard that corruption is only one of several pressures threatening the sustainability of South Africa’s healthcare system.
Paula Armstrong, managing director for economic and financial consulting at FTI Consulting, said medical scheme membership had steadily declined relative to population growth over the past decade.
According to her presentation, only 14.5% of South Africans belonged to medical schemes in 2024, down from 16% in 2014. Had membership kept pace with population growth, schemes would have covered about 10.4-million beneficiaries instead of the current 9.17-million, leaving a shortfall of roughly 1.24-million people.
Armstrong said the country’s weak economic performance was driving the decline in private healthcare cover.
South Africa’s economy has averaged growth of just more than 1% in recent years, barely keeping pace with population growth, while the expanded unemployment rate remains above 40%. Youth unemployment among people aged 15 to 24 years is close to 60%, placing further pressure on household finances.
She said these economic pressures had contributed to the growth of South Africa’s “missing middle” — an estimated eight million people who use private healthcare but cannot afford traditional medical scheme premiums.
Many instead rely on health insurance products or pay directly for healthcare services, leaving them exposed to significant out-of-pocket medical costs and fewer regulatory protections. About 1.3-million people are now estimated to be covered by health insurance products rather than medical schemes.
Annie Temane, executive dean of health sciences at the University of Johannesburg, told delegates that South African households spend an estimated R35.1bn a year out of their own pockets on healthcare.
Speaking to Business Day, Mothudi said reducing fraud, waste and abuse would not solve all of the sector’s affordability challenges, but it would improve the efficiency of healthcare spending by ensuring that more resources were directed towards patient care rather than avoidable losses.
“It would also free up resources that could be invested in prevention, chronic disease management, innovation and other interventions that improve health outcomes while reducing long-term healthcare costs,” he said.
Delegates also debated the implementation of the National Health Insurance (NHI) Act. The BHF reiterated its support for universal health coverage but argued that implementation of the NHI must be constitutionally compliant, financially sustainable and operationally practical.
The organisation said its legal challenge to the NHI Act was intended to ensure constitutional compliance rather than oppose universal healthcare.
Update: July 7 2026
This article has been updated with comment from BHF MD Katlego Mothudi.
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