This paper analyses the two major factors that have affected the trend towards privatization in the health sector in South Africa. The first is the shift in government policy in favour of greater private sector participation in hearth care. The second is the increase in medical aid scheme membership.The shift in government policy towards privatization should be seen in the context of a shift away from welfarism to monetarist macro-economic policies, witnessed in several advanced industrialized countries. The change in SA's health policy should also be seen in the light of the post-1977 reform strategies of the Apartheid state. However, the most important factor in the policy shifts is the state's inability or unwillingness to fund hearth services adequately.Yet for privatization to succeed there has to be an increase in demand for private health care, i.e., an increase in the number of people able and willing to afford private health care. In SA the market amongst whites for private care is more or less saturated. Thus the second major factor promoting the growth of private medicine in SA is the increase in the number of blacks covered by medical aid schemes (i.e. health insurance). The reasons for this trend are outlined. Finally, the implications of this analysis for policy interventions are discussed.
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